In keeping with the Nigerian Local Content Law, the local entity, CETBridge E&P; is building the requisite technical and financial capacity that would ensure that it is poised to undertake operatorship of MFAs, within Nigeria.
The objective is to provide; the local know-how; provision of finance for the MFA signature bonus; bidding process and other statutory fees, acquisition of the field data required for the field assessment, as well as the technical manpower and logistics required.
In collaboration with a pool of well-selected foreign technical partners, we are building operating capacity (through technical transfer arrangements) within CETBridge, which will provide the opportunity to independently operate fields in the near future.
In addition, CETBridge is exploring various options for direct foreign investment to be provided either via equity, Mezzanine financing, or a mix of both. Our strategy is to provide a substantial portion (20% - 30%) of the initial equity cash calls (cash to emanate from other business activities within the group), for fields secured by CETBridge and then support this equity by leveraging on debt (Reserve Base Lending arrangements) with foreign investment banks/institutional lenders.
In Nigeria, we are evaluating the opportunities in the acquisition of a substantial stake in an existing MFA, currently owned or operated by a local Nigerian company. Such opportunities currently exist amongst marginal fields’ concession holders, who were awarded MFAs, in the last marginal fields Concession Round carried out by the Nigerian Government in 2003.
It is often the practice, for IOCs to opt not to divest certain marginal fields within their asset portfolio but instead, allow a local company to develop the field under agreed PSC terms, whilst operatorship of the field is still retained by the IOC. In such a case, the local company may not carry the asset in its books, but will be 100% responsible for developing/producing the asset and will enjoy the upside of a revenue share (alongside the IOC) from proceeds.
CETBridge currently has a model and plan for exploring this option.
CETBridge is positioned for collaboration with foreign local entities (within the Sub-Saharan region) with its technical and financial capacity in well-defined PSC arrangements. Our preferred model is to work closely as a collective to form a joint venture entity/consortium with a carefully selected local entity, well placed within the target country to secure an asset(s). Typically, the responsibility of the local company would be to handle the business development and logistical aspects of the bidding/award process; whilst providing local intelligence and know-how to the JV/consortium, on a continuous basis. We believe that such opportunities represent an excellent window for mid-sized E&P; companies, such as ours.
The case for collaboration with local entities is often bolstered by the preference of government for indigenous companies in the target country with the ability to demonstrate technical and financial partnership arrangements with reputable E&P; players. We envisage these benefits to include:
With a team of seasoned professionals and collective average experience of over 30 years in the oil and gas industry in areas of project management, exploration and production, community and government relations, technical consultancy services, and the service sector, CETBridge is set to explore these Joint ventures and collaborative projects locally and internationally.
