Petrofac gains Nigerian foothold

25th Nov 2010 16:59

Oil services provider Petrofac has entered into an alliance with Nigerian oil company Seven Energy International. The deal is part of Petrofac's strategy to gain a presence in Nigeria, the tenth largest oil producer in the world. Having a local partner will help. Petrofac is paying $100m for a 15% stake (12.6% fully diluted) in loss-making Seven and it will also receive warrants that could take its stake to a fully diluted 19.2% for an investment of $52m. Petrofac will also be represented on the Seven board. Petrofac will help the Nigerian company with the development of its production and transportation assets. There may also be co-investment opportunities in Nigeria. Other investors are investing $50m in Seven, which is focused on gas projects that are near to the point of use of the gas. Seven is involved in two areas of Nigeria which were selected primarily for regional natural gas demand, their relatively secure nature and the resource potential.