London — Canada-based Africa Oil Corp said Friday it will buy all Petrobras' stakes in producing assets in Nigeria after trading house Vitol and Delonex Energy walked away from a $1.4 billion deal to jointly acquire the interests.
A Vitol-led consortium of Africa Oil and Delonex agreed exactly a year ago to buy Petrobras' 50% stake in Netherlands-based Petrobras Oil and Gas B.V. (POGBV).
The Nigerian deal includes the large deepwater Agbami field, which is part of Chevron-operated OML 27 and currently producers 250,000 b/d, along with OML 130, which consists of the Akpo and Egina fields.
Africa Oil said it has now agreed on an amended deal with Petrobras and the other venture parties for it to be the sole acquirer of the 50% POGBV stake. Africa Oil was previously purchasing a 12.5% interest in POGBV.
"Africa Oil considers this to be a unique and transformational opportunity to acquire an increased interest in world-class producing assets operated by Chevron and Total," Africa Oil CEO Keith Hill said in a statement.
Vitol, the world's biggest independent oil trader, confirmed its decision to drop out of the consortium but gave no further details on its reasons for a change of heart. Delonex was not immediately available for comment.
The POGBV venture holds minority interests in Nigeria's deepwater blocks OML 127 and OML 130, which include the major deepwater fields of Agbami, Akpo and Egina and together represent a fifth of Nigeria's total crude and condensate production.
In 2017, POGBV's entitlement from its respective 8% and 16% stakes in the two blocks averaged 47,000 b/d of crude oil but output from the Egina field in Total-operated OML 130 has been ramping up.
When it announced the original deal a year ago, the Vitol-led consortium said POGBV's production was 368,000 b/d and was expected to increase to over 568,000 b/d by the second half of 2019.
Africa Oil said it has also agreed the terms of a credit committee for a guarantee and loan facility of up to $250 million to help fund the acquisition.
Analysts at Canada's BMO Capital Markets applauded the deal but said investors will likely remain cautious given the 12 months of delay already to complete the acquisition.
"The decision for Vitol and Delonex to walk away will rightfully raise questions, but fundamentally we believe this is an attractive deal," the investment bank said in a note. "Africa Oil's decision to become sole acquirer (and ability to fund) illustrates the impressive level of cash generation from the assets."
Brazil's Petrobras has been shedding assets to pay down its major debts in recent years as its ramps up spending on developing the country's huge sub-salt offshore oil fields.
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