Starcrest Nigeria Energy Limited has accused Seplat Petroleum Development Company of acquiring Eland Oil and Gas Plc without due process, having failed to get the consent of Starcrest and Elcrest Exploration and Production Nigeria Limited, joint venture owners of Oil Minining Lease (OML) 40.
Seplat has offered cash payment of about GBP382 million, three hundred and eighty-two British pounds, for the acquisition of Eland for its 45 percent stake in OML 40.
Starcrest’s contention is based on the fact that the deal was anchored on a wrong premise, as Eland has no stake in OML 40. The 45 percent stake is held by Elcrest and not Eland. Starcrest and Elcrest are joint venture in OML 40.
It further disclosed that Eland which is a minority shareholder in Elcrest has no hydrocarbon entitlement produced from OML 40, except for dividend from Elcrest which is however subject to declaration of dividend as deemed appropriate by Elcrest.
Starcrest said further that prior to the announcement of the acquisition of Eland by Seplat, it was neither consulted, informed or briefed on the offer or terms of acquisition, and could therefore not carry out due diligence on the offer.
Enraged by this development, Starcrest said it has taken appropriate measures to contact relevant authorities both in Nigeria and United Kingdom, including seeking legal options aimed at putting a reign on the transaction.
Besides, it said it has also notified the Department of Petroleum Resources (DPR) and the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) over the illegal acquisition. NPDC is the operator and holder of 55% stake in OML 40, making it the majority stakeholder.
Efforts by Media Issues to reach Seplat has been fruitless.
Last month, the boards of Eland Oil & Gas PLC and Seplat Petroleum Development Company PLC announced that they had reached an agreement on terms of a recommended cash acquisition for 100% of Eland’s share capital, a deal Seplat hopes to boost its oil production in the Niger Delta.
OML 40 is located in the northwestern Niger Delta near Warri. Production which is currently about 10,000 barrels per day is exported by pipeline 67 kilometres south to Shell’s Forcados oil terminal. In 2012, Elcrest E&P completed the acquisition of a 45% interest in OML 40 from Shell, Total and Eni. NNPC also transferred its 55% equity in the licence to its E&P subsidiary, NPDC.