Tuesday, 30 October 2012 00:00
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ConocoPhillips divestment: Four firms shortlisted

The ConocoPhillips divestment has now reached a critical stage after the short-listing of four bidders for the assets from the initial shortlist of 12 that passed the first hurdle. At that stage the companies were admitted to a deeper level of information on the assets, and some, like Niger Delta which is now very heavily committed in OML 34 divested by Shell, dropped out of the running when they discovered the level of financial commitment required to fund the acquisitions.

Although the process has been shrouded in secrecy, a source disclosed that the four short-listed companies are Oando, Transcorp, Lekoil and Seplat. The four companies must now find the funding and technical capability in preparation for the final selection.

The assets on offer are OMLs 60, 61, 62 and 63; offshore OMLs 131 and 214 (both in deepwater); and Brass LNG. Although ConocoPhillips, which is running the transaction through BNP Paribas, had hoped to sell in one large tranche, analysts believe that it may have to split the assets up.

It could sell the onshore assets and Brass LNG together and the two offshore deepwater assets together. Given the level of funding required to develop deepwater assets, it may also choose to sell them separately.
The companies in the running are big players in the Nigerian market. Oando, whose chairman is Wale Tinubu, recently announced its intent to raise N35 billion through a rights issue for upstream assets. It is now believed that this may be in connection with the ConocoPhillips acquisition.

All the companies are remaining tight-lipped about the ConocoPhillips race although Wale Shonibare, Managing Director of UBA Capital, who is advising Tony Elumelu's Transcorp, said of the company's bid: "We are pleased to be associated with such a landmark transaction for local oil and gas". The companies will now be looking to firm up their bids as they prepare for the end of the race.