Heritage Oil is to spend US$850 million buying into a bundle of Nigerian oilfield assets known as OML 30, making its first move into the country.
The UK-based company is buying a 45% stake in OML 30 from a consortium of oil majors Total, Shell and Eni. It will also take a 45% stake in a number of other assets under the project’s joint operating agreement, including a segment of the 850,000 bbl/d Trans Forcados pipeline.
The OML 30 lease covers a little over 1,000 km3 of onshore developments, with eight main producing fields. According to Heritage, it currently produces around 35,000 bbl/d of oil, with estimated reserves of 707m bbl.
Heritage CEO and former mercenary Tony Buckingham says he is “very excited” by the deal, and expects it have “transformational” effect.
The company has long pursued a strategy of investing in areas others may consider unstable, such Kurdistan and the Democratic Republic of Cong, and late last year became one of the first international firms to invest in post-Gadhafi Libya. Heritage says its move into Nigeria, however, will provide a comparatively reliable source of both production and cash, reducing the risk associated with Heritage’s existing projects.
Once the deal is completed, Heritage says it plans to refurbish the wells that are producing and re-start those that aren’t, as well as work to repair vandalised pipelines that have closed off a number of wells. In the long term, it plans to drill more than 200 new wells, and restore a further 60. If gas prices rise, it may also develop estimated reserves of 2.5rn ft3.
