Shoreline lines up Vitol financing

30 January 2017, Week 04, Issue 724

Nigeria’s Shoreline Natural Resources has signed up a new debt financing deal worth US$534 million, backed by Vitol. 

The financing, which was announced last week, is intended to allow Shoreline to increase production from its Oil Mining Licence (OML) 30. As a result of its participation, Vitol will be entitled to lift Shoreline’s share of production from OML 30, a statement from Dentons, the trader’s lawyers, said. 

Dentons went on to say that Vitol would manage the development of alternative export infrastructure, which would reduce OML 30’s reliance on the Forcados terminal. 

Other participants in the financing were Ecobank, Fidelity Bank, Union Bank, FCMB and Farallon Capital Management, according to Nigeria’s Business Post. 

Shell Petroleum Development Co. (SPDC) sold off OML 30 – along with Total and Eni – to Shoreline in 2012. Shell received US$567 million for its 30% stake. SPDC is the operator of the Forcados terminal and, as the primary producer in the region, tied output into its infrastructure. This reliance was shown to be a problem in early 2016, when a militant attack on this route hobbled Nigerian production for more than a year. Shoreline is a joint venture between Shoreline Power and Heritage Oil. 

OML 30 covers 1,097 square km and includes the Kokori, Afiesere, Oweh, Olomore, Eriemu, Evwreni, Oroni and Isioka fields. The sale to Shoreline included most of the Trans Forcados pipeline from the licence to the Forcados River manifold, with the remaining 8 km held by SPDC. 

At the time of the sale to Shoreline, OML 30 was producing around 35,000 bpd of oil and condensate, and production has now reached around 55,000 bpd. Shoreline expects that, as a result of the Vitol financing, it will be able to increase output to 80,000-100,000 bpd by the end of this year. 

Shoreline and Shell struck a deal in November 2017. Shell agreed to help finance and develop – to the tune of US$300 million – a transmission and distribution network for supplies around Lagos. 

Nigerian Petroleum Development Co. (NPDC) has a 55% stake in OML 30, while Shoreline holds the remaining 45%. 

Edited by

Ed Reed


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