IOC and OIL buy 50% of Suntera Nigeria for $7.41m

Vol 10, PW 19 (25 Jan 07) People & Policy

Everyone knows Nigeria is a corrupt place to work in and that, it seems, is the reason it took Indian Oil and Oil India so long to sign an agreement for onshore block OPL-205.

First reports that the two state-owned companies were interested in (Oil Prospecting Licence) OPL-205 emerged in June last year. But PETROWATCH learns it was only this month on (Thursday) 11th January that IOC and Oil India signed a formal agreement in Delhi confirming their acquisition of a 25% stake each in Suntera Nigeria-205, a joint venture between the Moscow-based Khemka-owned Sun Group and Russian gas company ITERA.

Suntera Nigeria-205 holds 70% of OPL-205. “We wanted to check all the accounts of the company before paying money,â€‌ reveals a source.

“It is not easy to work in Nigeria.â€‌ IOC and Oil India first signed an agreement with Suntera Nigeria-205 to acquire a 50% stake last year on 31st August and the agreement came into effect on 27th September.

Fears that Oil India or IOC would be called to account before Indian anti-corruption watchdogs was uppermost in the minds of those working on the deal. “Nobody should question us later,â€‌ adds a source.

“We wanted everything to be clean and verified before money changed hands.â€‌ IOC and Oil India together paid $7.41m for their 50% stake in Suntera Nigeria, much of it to cover past costs.

Summit Petroleum, a Nigerian oil company set up in 1990 by prominent opposition politician Chief Moshood Abiola, who died in 1998, holds the balance 30% of OPL-25 and is operator. Located in the Anambra basin on the north edge of the Niger Delta, Summit was awarded the 2095-sq km OPL-205 block in 1990 and two years later drilled the first and only well, discovering gas and condensate in an area named the Otien Field.

Under the agreement, the OPL-25 consortium must drill a second exploration well before April 2008. “We are excited by this transaction,â€‌ we hear.

“This is the first time we have got a stake in a block where there has been a discovery.â€‌