Background

On 1 February 2013, Mayfair Assets and Trust Limited, a subsidiary of LEKOIL, farmed into Afren Investments Oil and Gas (Nigeria) Limited’s (AIOGNL) interest in OPL 310 for a 17.14 per cent participating interest and 30 per cent economic interest, subject to Ministerial Consent from Nigeria’s Minister for Petroleum Resources. Ministerial Consent was granted for the interest on 9 June 2017

On 31 July 2015, Afren plc (“Afren”), the parent company of Afren Oil & Gas that held interests in the OPL 310 licence, was put into administration and its assets put up for sale. On 1 December 2015, LEKOIL announced an agreement with the administrator of Afren and Afren Nigeria Holding Limited to acquire the shares of AIOGNL, which held a 22.86 per cent participating interest in OPL 310. This interest was also subject to Ministerial Consent from the Minister for Petroleum Resources. The acquisition meant that LEKOIL would hold a consolidated participating interest of 40 per cent and an economic interest of 70 per cent in OPL310 and would become the technical and financial partner of Optimum Petroleum Development Company (“Optimum”), the operator and local partner in OPL310 which retains a 60 per cent participating interest.

An application for the transfer of the 22.86 per cent interest was duly made by Afren Nigeria in January 2016. As the transaction was not undertaken on the basis of an Assigned Interest in the oil block, approval by Optimum was not required under the JOA between Optimum and Afren. In March 2016, LEKOIL was notified by the Ministry of Petroleum Resources that the necessary due diligence exercise would be conducted that month. The due diligence exercise did not take place and has not been rescheduled by the Department of Petroleum Resources since then.

Application to the Court for a Declaration

Despite progressing exploration and appraisal activities on OPL 310 as previously announced, LEKOIL has, to date, not received Ministerial Consent for its acquisition of the additional 22.86 per cent interest in OPL 310 or a satisfactory explanation of why such consent has not been forthcoming. As a result, the Company has taken the decision to apply to the Federal High Court for a declaration that is expected to expedite the consent process, and preserve the unexpired tenure in the licence. The Company will provide updates to the market as appropriate. The Company is represented by Fidelis Oditah QC, SAN.

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Source: Press Release