Newcross Exploration and Production, a decade old entrant in the Nigerian oil and gas sector has spent an estimated $900 million to acquire a 45 percent stake in Nigeria’s onshore Oil Mining Lease (OML) 24 in the Eastern Niger Delta. The stake was formerly held by Royal Dutch Shell, 30 percent, French oil firm Total, 10 percent and Italy’s Eni, 5 percent.
Shell announced recently that it has sold its 30 percent stake in (OML) 24 to Newcross for $600 million, and that its partners Total and Eni have also sold their respective 10 percent and 5 percent stakes in the field.
This deal is part of Shell’s plans to divest from its Nigerian onshore assets. In October the Anglo Dutch oil multinational said it had signed sales agreements for all its Nigerian oil assets it had put up for sale as part of a broad global cost-cutting drive.
With OML 24 producing an average of about 13,000 barrels of oil equivalent per day, the $900 million deal for the field signifies a giant step towards Newcross’ target to be a dominant force in Nigeria’s oil industry by in the next few years to come. It CEO, Bolaji Ogundare has lifted obviously moved the company up the ladder of corporate success from relative obscurity in its ten years of existence.
Bolaji and Newcross first came to the limelight in the Nigerian oil sector in 2013 when the company discovered commercially viable quantity of oil in its Oil Prospecting License (OPL) 283 in Efe-1st. Industry watchers described the discovery as an important step towards unlocking the deep potentials in OPL 283.
The company is breaking grounds as one indigenous oil company working to actualise government’s dream and vision for improved participation of local companies in the nation’s oil sector.
Newcross has joined the league of local oil companies taking the centre stage in the oil industry. Oando PLC had paid $1.5 billion for Nigerian oil assets of American giant Conoco-Phillips. Two months ago, Aiteo Group, another indigenous company owned by Nigerian billionaire Ben Peters, paid 2.85 billion for Shell’s OML 29.
Government encouragement of local content in the sector has increased indigenous participation in the oil industry through the instrument of a Local Content Law and establishment of a Nigerian Content Monitoring and Development Board (NCMDB)
The company’s vision 2017 includes ”To actively strive to be within the top quintile of the fully indigenous oil and gas exploration and production company in Nigeria, with full awareness of our operating environment, focusing on profitability while maintaining environmental and social responsibility.” Others are ”To use our operational success as a launching pad to the West African and Gulf of Guinea Market.and to maintain a mixed balance of Newcross-operated exploration and production assets and targeted producing asset investments to increase Newcross aggregate share of the West African market.