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Elcrest Completes Acquisition of 45 Percent Stake in OML 40

ELCREST-OML40-PIX-2-cropped.jpgABUJA, August 31, 2012 - Elcrest Exploration and Production Nigeria Limited, a joint venture of Starcrest Energy, a subsidiary of The Chrome Group, and Eland Oil & Gas, has completed its acquisition of a 45 percent stake in Oil Mining Lease (OML) 40. Leaders of Elcrest met with leaders of Shell, Total E&P and Agip over the weekend in Abuja to complete the transaction.

See photos from the transaction ceremony here.

Elcrest had applied for consent of the Minister of Petroleum for the 45 per cent participating interest in OML 40 on May 24, 2011.

With the Federal Government's approval of the stake assignment to Elcrest Exploration and Production Company, parties to the oil block finally signed all necessary documents to legalize the divestment deal.

Total, Nigeria Agip Oil Company (NAOC), Total E&P, NNPC/NPDC and Elcrest, signed documents that include amendments to the Joint Operating Agreement (JOA) between NNPC and SPDC JV, JOA between NPDC and Elcrest as well as the deed of novation agreement between parties to the oil asset.

OML 40 which is located at SPDC's Western Operating Division in Niger Delta is reported to have proven and probable reserves (2P) of 225.7 million barrels of oil equivalent and historically produced at less than 5,000 barrels per day before it was capped; the block also has the potential to produce 10,000 barrels per day.

The formal completion of the transaction was conducted in the presence of representatives of the parties; the Group Managing Director of NNPC, Mr. Andrew Yakubu for NNPC/NPDC, Emeka Offor for Elcrest, Managing Director and country Chairman of Shell, Mutiu Sunmonu for his company, Deputy Managing Director of NAOC, Mrs. Funmi Goka for NAOC as well as Executive Director Total E&P, Mr. Olubunmi Obembe for his company at the NNPC Towers.

With the signing of the MoU, Shell and its JV partners have effectively ceded their 45 percent stake in the OML 40 to Elcrest while, the NNPC will retain its 55 percent stake and at the same time assume operatorship of the oil field through NPDC.

Sir Emeka Offor, Chairman of The Chrome Group, reiterated his pledge to put the asset in good use, adding that the partnership will continually call for support whenever it needed one from established industry players. The Chrome Group is one of Nigeria’s leading indigenous multinational businesses with subsidiaries operating in oil and gas exploration and production, oil and gas servicing, engineering, insurance, logistics and power industries.

Elcrest met the technical and commercial criteria set by Shell to emerge the preferred bidder for OML 40. A criterion that an indigenous oil firm must emerge as its preferred bidder helped Elcrest clinch the asset.

About The Chrome Group

The Chrome Group, which employs 800 people, was founded by Sir Emeka Offor in 1990. The company is a leading multibillion dollar conglomerate based in Abuja, Nigeria. It has significant interests in the oil and gas sector with additional interests in the bio-fuel, petroleum trading as well as logistics and dredging service arenas. Key projects have included the turnaround maintenance (TAM) for the Port Harcourt refinery- Nigeria's largest oil refinery. In addition to its commercial business activities, the group engages in an active Corporate Social Responsibility (CSR) program and is actively engaged in youth education and employment programs.