Aradel Holdings Plc, an indigenous energy company, has entered a purchase agreement through its subsidiary, Aradel Energy Limited, to acquire a 100% interest in the Olo and Olo West marginal fields from TotalEnergies EP Nigeria and the Nigerian National Petroleum Company Limited (NNPC) for $19.5 million.
The company made this disclosure in a statement on its official website following the acquisition of the oil field.
The energy company said the acquisition was completed for a total consideration of $16 million, with an additional $3.5 million in deferred and conditional payments.
Aradel further stated that the Petroleum Mining Lease for Olo and the Petroleum Prospecting License for Olo West will be granted following the payment of the required ministerial consent fees and the successful completion of the approved field development plans within the specified timeframes.
“Aradel Holdings Plc (“Aradel Holdings” or “the Company”), through its subsidiary, Aradel Energy Limited, has signed a sale and purchase agreement to acquire the 100% interest in the Olo and Olo West Marginal Fields from TotalEnergies EP Nigeria and NNPC Limited (“the Acquisition”). The Olo and Olo West Fields were formerly part of OML 58.
“The Acquisition was completed for a consideration of US$16 million, plus US$3.5 million of deferred and conditional payments.
“The Petroleum Mining Lease (for Olo) and Petroleum Prospecting License (for Olo West) will be issued after the payment of relevant Ministerial Consent fees and completion of approved Field development plans within designated timeframes,” Aradel said.
What you should know
The Nigerian onshore oil industry has witnessed significant shifts recently, marked by the gradual exit of major international oil companies (IOCs), creating opportunities for local players to take the reins.
This trend demonstrates a broader transformation within the sector as global energy giants reassess their portfolios and strategic priorities.
In May 2024, Shell, one of the world’s largest oil companies, took a monumental step in this direction by announcing its agreement to sell its 30% stake in the Shell Petroleum Development Company of Nigeria (SPDC).
This deal, valued at up to $2.4 billion, is particularly noteworthy as it transfers a substantial portion of Nigeria’s onshore oil production into the hands of a consortium dominated by local companies.
Other major players, such as ExxonMobil and Norway’s Equinor, have also divested significant assets in recent years. These IOCs are increasingly shifting their focus towards newer, more profitable ventures, often in regions that present fewer operational risks and higher returns.
As these global giants withdraw from Nigeria’s onshore oil industry, it has paved the way for indigenous companies to step up and assume greater control over the country’s valuable oil resources.
The increased involvement of local companies may lead to more direct economic benefits for the Nigerian economy, fostering greater national control over natural resources and possibly sparking new investments in the sector.
However, it also raises questions about the capacity of these local entities to manage and sustain operations at the scale previously handled by multinational corporations.
