Nigerian oil company Seplat Petroleum is set to acquire London-listed Eland Oil & Gas for £382m.

The West African oil group will pay 166 pence per share for Eland, which translates into a premium of 28.5 per cent from the company’s closing price on Monday.

Shares in Eland jumped by 28 per cent on Tuesday.

The board of Eland – which has its headquarters in Aberdeen, but operates mostly in Nigeria – have backed the deal.

So too has its three largest shareholders.

Seplat chairman Dr. Bryant Orjiako said the acquisition would allow the company to increase the scale of its operations in Nigeria.

He said the new combined entity would have oil production of 38,000 barrels per day and will mostly focus its operations in the West Delta region.

“We firmly believe that Eland is a complementary fit with Seplat and that there will be enhanced scale and a wider range of capabilities made available to the enlarged group through the combination,” Dr Orjiako said.

“This acquisition signals the next step in our journey that will underpin Seplat’s ambition to be the leading independent exploration and production [company] in Nigeria.”

Eland chairman Russell Harvey said: “This offer allows Eland Shareholders to benefit from an accelerated and enhanced realisation of this value through a cash offer at a significant premium to the current market value.

“In addition, the business will benefit from the opportunity to become part of a more significant player in the Nigerian oil and gas market.”

The acquisition will be financed through cash and new loans.

Completion of the deal is expected before the end of the year.

source: City Am

Nigeria’s inefficient ports have hampered the progress of what will be Africa’s largest oil refinery. Executives of the plant on Monday cited problems with importing steel and other equipment as a reason for the delays.

A consultant commissioned by the Lagos Chamber of Commerce and Industry (LCCI) to co-write a report on Nigeria’s ports last year, Femi Ademola, said: “The reasons for the delay in completing the refinery include the challenges with port capacity to berth heavy equipment,”

Ademola expects that the refinery will be operational in 2021/2022 after 2020 completion.

Aliko Dangote, who first announced his plans for a new oil refinery in late 2013, is battling against conditions at the ports to avoid further delays.

Initially planned to start production in 2016, the refinery deadline slipped to the end of 2019 after a change of location. In August, Reuters reported that industry insiders now don’t expect fuel output before 2022.

An offshore manager with Africa Port Services, Demola Akinkunmi, told Hellenic Shipping News in March that equipment being imported for the construction of the refinery was blocking up the country’s ports.

The equipment is being stored at the ports until needed at the construction site, he said. That is causing delays for all other imports, with shipowners being charged $20,000 a day as they wait to unload.

Ademola agrees that the importation of heavy equipment and materials used for the construction of the refinery may be putting pressure on Lagos ports – though the new Lekki deep water port, scheduled for completion in 2020, will free up the current port facilities once it is completed.

The Lekki location is intended to enable fast transshipment of refined products to international markets, which could help turn Nigeria into a net exporter of fuel. Ademola is optimistic in the long term, arguing that the refinery will be worth the wait.

In its July newsletter, the LCCI implored the government to address the poor quality of the roads leading in and out of the country’s ports.

Source: The Nation Via EnergyMixReport