Pecan oil field
Africa Oil Corp, a Canadian oil and gas company, has achieved a significant milestone by receiving regulatory approval from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for a 20–year extension of its offshore petroleum mining license, known as PML 52. This license is crucial as it encompasses some of the Agbami field, one of Nigeria’s largest deepwater discoveries. The extension is considered a pivotal move for the company amid the ongoing operational challenges in the region.
PML 52 covers 62.46% of the Agbami field, which was discovered by the Agbami-1 well in 1998. The production sharing agreement for PML 52 sees Famfa Oil holding the largest interest at 60%, with Chevron following at 32% and Prime Oil & Gas Coöperatief holding 8%.
In addition to the license extension, Africa Oil also received regulatory approvals for the amalgamation of its wholly-owned subsidiary Africa Oil Papa Corp. with BTG Pactual Holding. This merger, announced in June, aims to consolidate 100% ownership of Prime Oil & Gas Coöperatief into Africa Oil. In exchange, BTG Pactual Oil & Gas will receive common shares in Africa Oil.
The completion of this amalgamation is contingent on several customary closing conditions, including competition clearance from the Federal Competition & Consumer Protection Commission (FCCPC), approval from Nasdaq Stockholm, and the completion of a previously announced farm-down of Africa Oil’s Namibian interests through Impact Oil & Gas Limited. A reorganization of BTG Pactual Holding’s structure is required to facilitate the amalgamation.
After completing an amalgamation transaction, Africa Oil’s 50% interest in Prime is expected to increase to 100%, enhancing its operational capabilities within the field. As of December 31, 2023,
Africa Oil Corp. operates as an oil and gas exploration and production company in Kenya, Nigeria, and South Africa. It holds interests in both producing and development assets in deep-water Nigeria, alongside development assets in Kenya.
The company’s portfolio also includes exploration and appraisal assets in Namibia, Nigeria, South Africa, Kenya, Guyana, and the Senegal-Guinea Bissau Joint Development Zone. Formerly known as Canmex Minerals Corporation, Africa Oil changed its name in August 2007 and was incorporated in 1983, with its headquarters in Vancouver, Canada.
As of the latest market data, Africa Oil Corp. is traded as AOI.TO on the Toronto Stock Exchange, with a market capitalization of approximately CAD 1.08 billion and a current stock price of around CAD 2.59 per share.
The extension of PML 52 comes at a time when many oil companies are increasingly shifting focus toward offshore production due to the persistent theft, vandalism, and insecurity affecting onshore operations in Nigeria.
Reports indicate that the Nigerian oil industry faced significant losses from oil theft, amounting to an estimated $4 billion in 2021 alone, with a daily loss rate of about 200,000 barrels. Securing offshore licenses enables companies like Africa Oil to mitigate these risks while accessing Nigeria’s abundant hydrocarbon resources.
With Africa Oil’s plans to enhance its stake in one of Nigeria’s key offshore fields, the implications of this development extend beyond mere corporate interests. It highlights the need for Nigeria to balance foreign investment with effective local engagement, ensuring that the benefits of such expansions positively impact local communities while addressing critical security concerns.
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