Dangote submits highest bid for Shell’s gas field

Aliko Dangote


28 March 2014, LaAfrica’s richest man, Aliko Dangote,  is planning to acquire a stake in a Nigerian gas field owned by Shell.

Forbes online quoting a report by Africa Intelligence, said Dangote Industries submitted the highest bid for Shell’s stake in Oil Mining Lease, OML, 18 at an auction organised last year in the Niger Delta region.

The financial details of the bid and the exact stake Dangote is looking to acquire are undisclosed.

Shell is currently the operator of the Alakiri Creek plant on the OML 18 field.

The Alakiri Creek plant processes 80 million standard cubic feet per day (MMpc/d), but has the potential to rise to 120 million square feet per day (mmsf/d).

The OML 18 field is said to have reserves of close to 1.5 billion barrel of oil equivalent (BOE) of gas.

This is not the first time Dangote would make an attempt to acquire an asset owned by the Dutch oil major. In 2010, the business magnate put in a bid for Shell’s 45 per cent stake on OML 30, but lost his bid to Conoil Producing, an exploration company owned by billionaire, Mike Adenuga. The Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of the Nigerian government-owned oil company would later cancel the sale of the stake to Adenuga and sold it to London-listed Heritage Oil Plc.

Shell has recently been divesting from some of its key Nigerian assets in the wake of crude oil theft and weak refining margins.

Dangote, who made his $24 billion fortune trading cement, sugar and flour, has recently ramped up his efforts to boost his investments in Nigeria’s booming oil sector.

While his largest and most publicised investment in the energy sector is a planned $9 billion private oil refinery in Nigeria, Dangote also owns minority stakes in a handful of oil exploration concerns, including a nine per cent stake in block 1 in the Joint Development Zone between Nigeria and Sao Tome, where Chevron is the operator. He also owns a 10 per cent stake of block 3 in the JDZ.

Meanwhile, Lekoil Limited yesterday said it had commenced 3D seismic studies of the Oil Prospecting Lease (OPL) 310 site offshore Nigeria, which includes the major Ogo discovery.

The oil and gas exploration and development company, according to a UK-based Alliance News, said the Polarcus vessel had commenced the study, which will cover an area of roughly 1,505 square kilometres, or about 80 per cent of the entire block, which is joint owned by Lekoil, Afren Plc and Optimum Petroleum Development Ltd.

The company said previous 3D seismic data, covering 20 per cent of the site, along with 2D and electromagnetic data, was used to define prospectivity ahead of the drilling of its Ogo-1 and Ogo-1 sidetrack late in 2013, which led to a bonanza oil find in November.

At the time, the OPL310 site showed a gross recoverable P50 resource estimated at 774 million barrels of oil equivalent, almost four times more than their originally targeted 202 million barrels.

Lekoil said the new 3D acquisition is expected to be completed in the second quarter.
The company said following the completion and evaluation of data, the partners on site will use the data to de-risk opportunities in the OPL 310 acreage surrounding the Ogo discovery, with plans to drill an appraisal well on Ogo in the second-half, ahead of development planning.

Lekoil shares were down 1.8 per cent to 54.00 pence and Afren shares were down 4.0 per cent to 144.83 pence yesterday.


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