(Bloomberg): One of Nigeria’s richest families has financed a state-owned energy company’s purchase of oil blocks from Chevron.
A subsidiary of MRS Holdings Ltd provided the Nigerian National Oil Company with $300 million to buy two shallow water licenses sold by Chevron, according to the state-owned company’s latest financial statements. The deal closed in May and funding has been secured for crude from producing fields within NNPC’s portfolio, it said.
A forward sale agreement was signed between NNPC and Bestaf Funding Ltd, registered in the Bahamas, according to financial statements and an email from NNPC’s chief financial officer, Umar Ajiya. Bestaf is a group of companies that is part of her MRS, a Lagos-based conglomerate that belongs to the family of her Sayyu Dantata, her 53-year-old brother of Africa’s richest man, Aliko Dangote.
MRS is actively involved in the storage, retail and distribution of petroleum products. One of its subsidiaries is NNPC, one of the companies that converts crude oil into imported gasoline to meet Nigeria’s fuel needs. Bestaf companies develop real estate, manufacture lubricants, store shipping containers and provide support vessels.
MRS and Bestaf did not respond to requests for comment.
NNPC recently transformed into a fully commercial venture and is looking to increase its presence across Nigeria’s energy sector. The company purchased his 40% operating interest in Chevron (Oil Mining Leases 86 and 88) after preempting negotiations between a major US company and his local firm, Conoil Producing Ltd. From Exxon Mobil Corp. he acquired for $1.3 billion.
Ajia declined to comment on whether the financing model used to take over Chevron’s permit could be emulated to purchase Exxon’s assets, stating that such disclosure would be “an influencing of our business strategy.” It is equivalent to an invasion,” he said.
According to its financial statements, NNPC will repay Vestav over a period of 4.5 years and will deliver 8,000 barrels of crude oil per day to Dantata’s company for the duration of the contract between the parties. Ajiya said oil is the “only repayment guarantee” and will be lifted by his MRS unit acting as Bestaf’s trading agent. Proceeds will be credited to a designated account held at the African Export-Import Bank “for regular repayment,” he said.
Afreximbank has lent $300 million to Bestaf to finance the purchase of NNPC’s assets, Ajiya said. Afreximbank and Bestaf firm signed a $1 billion memorandum of understanding a year ago to support the company’s commercialization of OML 86 and 88 gas deposits under an agreement with NNPC.
Afleximbank did not respond to a request for comment.