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Financial Times: Nigeria’s Oando buys Shell assets

By Dino Mahtani
Published: February 23 2008 02:00 | Last updated: February 23 2008 02:00

Royal Dutch Shell is set to complete the sale of its share in two offshore oil licences in Nigeria to a local firm that beat off a rival bid by China’s biggest offshore producer, writes Dino Mahtani .

Executives of Oando, Nigeria’s largest domestic energy group that is listed in Lagos and Johannesburg, were yesterday in The Hague to tie up the final details of the sale.

Shell began the process of divesting the two producing licences last year.

At roughly the same time it announced plans to embark on a cost-cutting exercise in Nigeria, where funding shortfalls and security issues have regularly and severely impacted on operations.

Oando’s bid will make it the first Nigerian company to secure producing assets from any multinational operating in Africa’s biggest oil producer.

Sources close to the deal said that Oando had secured a $200m (£102m) facility from Merrill Lynch to help it finance the deal.

The sources added that Oando was also looking to secure up to $400m of further financing to be secured by the producing assets which it is acquiring from Shell.

The sale of the assets was contested by a number of Nigerian groups, as well as CNOOC, China’s largest offshore producer that has dramatically expanded its presence in Africa over the past three years.

Copyright The Financial Times Limited 2008

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