JSE- and Aim-listed oil and gas company SacOil and Nigerian oil firm Energy Equity Resources (EER) have signed a memorandum of understanding to explore oil and gas opportunities in Nigeria.
SacOil announced on Friday that it had officiated the planned joint venture with EER to establish SacOil Energy Equity Resources (Seer), which was awarded a 12-month term contract for the purchase of Nigerian crude oil by the Nigerian National Petroleum Corporation (NNPC).
The crude oil agreement would provide Seer with the right to acquire crude oil from the NNPC for onward sale. The amount of offtake by Seer is dependent on the aggregate crude production in Nigeria and the prevailing global oil price.
SacOil CEO Dr Thabo Kgogo noted that the revenue generated from the sale of the crude allocation would contribute meaningful income to the South African upstream oil and gas company, supporting SacOil’s growth and investment strategy across the oil and gas value chain on the African continent.
“This announcement is aligned with our previously communicated strategy to focus on cash-generative, income-producing activities in the upstream, refining and downstream [markets]. Nigeria is a prolific hydrocarbon nation and the largest exporter of crude oil on the African continent [and] we are pleased to have secured this crude allocation for trading, as it provides us with a structured and measured exposure to this attractive market. We look forward to working with EER and the NNPC on future opportunities in the Nigerian oil and gas sector,” said Kgogo.
The Republic of Nigeria is one of the most prolific oil and gas countries in Africa, with significant investment opportunities available in the current economic climate. With this in mind, Seer has been evaluating a number of opportunities that could provide sustainable revenue returns.