Oando energy resources have secured a month’s grace for the completion of its long-running acquisition of ConocoPhillips assets in Nigeria in one huge sale. The company, which has struggled to raise the funds for the completion of the $1.79 billion deal, finally announced a month ago that it had succeeded in raising all the funds it needed to close the deal. They pointed out that Ministerial consent, which is required to make the transaction effective was the only outstanding item.
The company, which is dually listed in Johannesburg and Toronto, was due to close the acquisition at the end of last year and since then has been getting monthly extensions, leading some to comment that the deal is now too big to fail. Now, it has won another month’s extension to enable it to obtain Ministerial consent to the transaction.
Under the Nigerian law, the transfer of interests in any oil exploration or production license requires the consent of the Minister of Petroleum Resources. However, ministerial consent can take a long time and some deals have reportedly waited up to 9 months for ministerial consent.
Oando says it had to agree to pay an additional deposit of $25 million on the 17th of April if ministerial consent is not received on or before the 11th of April.
“As we approach the final stage of creating Africa’s leading indigenous independent oil and gas company, we have committed to increasing our deposit as a goodwill gesture to ConocoPhillips, whilst we continue to work together to fulfil all conditions precedent for closure of this transaction,” commented OER Chairman, Wale Tinubu.