Entering the Big League
By Sebastine Obasi
Sunday, September 14, 2008
Allied Energy PLC, an indigenous upstream oil company goes to the stock market to raise funds for its expansion programme
The quest for greater participation by indigenous companies in Nigeria’s oil and gas sector is yielding positive results. Allied Energy PLC, a leading indigenous upstream company, is to be listed on the Nigerian Stock Exchange. The listing which has already been endorsed by the Listings and Quotations Committee of the Nigerian Stock Exchange, is awaiting the approval of the Securities and Exchange Commission, SEC.
The listing is expected to offer an opportunity for the Nigerian company to partake more in the activities of the oil and gas sector, which has been dominated by foreign companies. As part of its expansion plans, Allied Energy is to invest $1 billion, by the first quarter of 2009, on the development of oil fields, in conjunction with Agip Energy, an Italian oil multinational.
Kase Lawal, chairman and founder of Allied Energy, said that the company has decided to go for initial public offering, IPO, instead of private placement, to enable Nigerians know about its operations and enormous potentials to deliver value as an indigenous player operating in an environment usually dominated by multinationals. "This is pivotal to the way we do business and it underscores Allied Energy’s commitment to empower our people with our success story, a success which is also a success for Nigeria," he said.
According to him, the company would be in a position to pay dividends to share holders within a year of listing, which would be unprecedented in the oil and gas sector. He said that the company’s listing would enable Nigerians share from the gains and investments that had been made over the years. Lawal pointed out that Allied Energy expects its first production of 25,000 barrels per day soon.
Allied Energy, an affiliate company of Houston Texas, United States-based CAMAC International Group of Companies, is one the first indigenous oil companies to be awarded an oil prospecting license, OPL in the Nigerian deepwater. In 1992, the company got OPL 210. Three years later, Allied Energy and BP Statoil, became the first oil consortium to discover a deepwater well and subsequently, oil in deepwater West Africa.
In 2005, the company signed a joint production sharing agreement with Nigerian Agip Exploration, a subsidiary of Eni E and P. Under the agreement, Agip has a 40 percent stake in oil mining leases, OMLs, 120 and 121. The two companies are collaborating on the technical assistance and operations management of the blocks.
Apart from that, Allied Energy also won two new prospective licenses in the 2005 oil bid round. The winning bids included the rights to a 54 percent interest in OPL 278, which is located onshore the Niger Delta basin and a six percent in OPL 282, which is located in shallow water on the Niger Delta continental shelf zone.
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