- Petrofac Awarded US$280 Million Offshore Contract by Petronas in Malaysia30 December 2010
- Petrofac to Commence US$3.4 Billion Second Phase of Turkmenistan Contract22 December 2010
- Trading Update17 December 2010
- Petrofac Acquires Interest in UK Gas Storage Company6 December 2010
- Petrofac Emirates Achieves Independent Certification to ISO 90015 December 2010
- Strategic Alliance with Seven Energy25 November 2010
- SPD Completes Multi-Well, Multi-Customer Management Programme in UK North Sea18 November 2010
- Petrofac Awarded £40 Million North Sea Engineering Services Contract by Maersk Oil12 November 2010
- Petrofac First to Attain Approval for New OPITO Major Emergency Management Course1 November 2010
- Petrofac Awarded Gas Plant Contract with Total27 October 2010
- Interim Management Statement21 October 2010
- Petrofac Employees Support Pakistan Flood Victims21 October 2010
- Petrofac to provide Duty Holder Services for Sharjah Government11 October 2010
- Petrofac Creates New National Training Centre for Syrian Arab Republic7 October 2010
- Petrofac and Shell Agree Partnership for North Sea CCS Project4 October 2010
- Petrofac Acquires CO2 Storage Business27 April 2010
- Petrofac Secures New North Sea Contract with Britannia26 April 2010
- Petrofac Athletics League begins new season23 April 2010
- Completion of the Demerger of the UK Continental Shelf Oil & Gas Assets of Petrofac Energy Developments6 April 2010
- Petrofac Acquires Metering Specialist1 April 2010
- SPD Commences Multi-well, Multi-customer Manangement Programme in UK North Sea30 March 2010
- Petrofac Wins Qatar Petroleum Contract Worth More Than US$600 Million29 March 2010
- Petrofac Helps Aberdeen School Raise More Than £7,000 at Annual Dinner Dance26 March 2010
- Eclipse Petroleum Technology Signs Agreement with Weatherford to Enhance and Distribute PetroAtlas22 March 2010
- Final Results for the Year Ended 31 December 20098 March 2010
- Directorate/Board Committee Changes8 March 2010
- Petrofac Begins Pipeline Export and Production from Don Southwest Sidetrack5 March 2010
- Proposed Demerger of the UK Continental Shelf oil & gas assets of Petrofac Energy Developments to create EnQuest PLC4 March 2010
- Circular posted to Shareholders4 March 2010
Strategic Alliance with Seven Energy
25 November, 2010
Petrofac, the international oil & gas facilities service provider, has entered into a strategic alliance with Seven Energy International Limited (‘Seven Energy’), a leading Nigerian production and development company.
Subject to certain conditions being met, Petrofac has agreed to invest US$100 million, funded from cash resources, to acquire a 15.0% interest (12.6% on a fully diluted basis) in Seven Energy and will assist Seven Energy with the development of its production, processing and transportation assets. Seven Energy has also issued warrants to Petrofac which, subject to Petrofac’s satisfaction of certain performance conditions and milestones in relation to project execution, will enable Petrofac to invest up to a further US$52 million into Seven Energy, and take its interest to 19.2% on a fully diluted basis. Petrofac will be providing experienced personnel to assist with the delivery of Seven Energy’s key existing projects and will be represented on its Board and management committees. The agreements also provide for an arrangement between Petrofac and Seven Energy in relation to co-investment opportunities in Nigeria. In addition to Petrofac’s investment, existing and other new investors have agreed to invest a further US$50 million in Seven Energy.
Background to the Alliance
Petrofac has been examining how to establish an ongoing local presence in Nigeria for a number of years. Nigeria has very substantial undeveloped hydrocarbon reserves combined with a large population whose growing demands for energy are not currently being met. Nigeria is forecast to be one of the fastest growing emerging countries, and is planning for significant growth in the energy and power sectors. It is currently the tenth largest oil producer in the world with proven oil & gas reserves estimated at 37 billion barrels and 185 trillion cubic feet respectively. However, significant new infrastructure is needed to meet Nigerian Government targets. It aims to increase power generation capacity to 10,000 Megawatts by 2011, from its current capacity of 8,000, and estimates that the gas infrastructure alone will cost around US$30 billion, not including upstream development costs.
Seven Energy’s focus on gas supply projects near to delivery is a key differentiator, and the company is filling a gap in the Nigerian market for an indigenous gas player. Nigeria is one of the few regions in the world where independent development and production companies can gain access to significant onshore fields and prospects, and there are high barriers to entry for non-indigenous participants.
Seven Energy has assembled an attractive portfolio of oil & gas assets in selected areas close to significant centres of demand. Through its investment and alliance agreement Petrofac believes it can help Seven Energy by assisting them on the ground with the build out of the infrastructure necessary to fully exploit the value of these assets.
Seven Energy, a leading Nigerian development and production company
Formed in 2006, Seven Energy has assembled a portfolio of natural gas and oil assets and interests that are characterised by relatively low geologic risk fields with attractive resource potential. These Niger Delta properties are focused in two core areas selected primarily for regional natural gas demand, their relatively secure nature and the resource potential in the areas and in each field. It has also recently entered into an alliance agreement with Nigerian Petroleum Development Company (‘NPDC’) to provide technical support and development funding of NPDC’s interest in oil mining licences (OMLs) 4, 38 and 41 in exchange for a profit sharing entitlement to NPDC’s share of hydrocarbons produced therein. Seven Energy has interests in and profit share entitlements to net proven and probable reserves and contingent resources of, in aggregate, approximately 246 million barrels of oil equivalent (boe), comprising proven and probable reserves of, in aggregate, approximately 129 million boe. A substantial proportion of the contingent reserves are gas, being classified as contingent pending sales contracts and / or completion of production wells and associated infrastructure.
Seven Energy’s securities are held by, inter alia, its Nigerian founders, management and certain Africa focused private equity funds including Capital International Private Equity Funds and Standard Chartered. As at 31 December 2009, Seven Energy had gross assets of approximately US$528 million and reported a loss after tax for the year ended 31 December 2009 of approximately US$52 million.
Led by Chairman Philip Ihenacho and Chief Executive Scott Aitken, Seven Energy’s management team has a long and successful track record of developing assets in the West African hydrocarbon industry.
Gordon East, managing director, Petrofac Production Solutions, will be appointed to the Board of Seven Energy. He commented: “We look forward to working closely with Seven Energy and assisting them in the development of their portfolio of oil & gas assets. We will be drawing on capability from across the Petrofac group, including our engineering, training, consulting and operations services, to create value through both our investment in Seven Energy and as their strategic development partner. A team of Petrofac personnel will be mobilised immediately in order to support Seven Energy with the completion of its existing key projects.”
Commenting on the agreement, Ayman Asfari, group chief executive of Petrofac, said: “Nigeria is a high growth market where we have been seeking commercial opportunities for some years. Seven Energy combines a very attractive market position with considerable development upside and an experienced management team. The opportunity to both co-invest and co-develop with a well-respected partner, while deploying some of our own people, will give us the platform to establish a local presence in Nigeria and add further value for our shareholders.”
Phillip Ihenacho, chairman of Seven Energy, added: “Petrofac has a proven track record, which we think will be invaluable in developing our oil & gas assets. We look forward to working together on what we believe is an exciting opportunity.”
Interests in Seven Energy expressed on a fully diluted basis assume the full conversion of all convertible securities and exercise of all outstanding warrants and options.