SacOil JV to purchase, resell Nigerian crude oil

SacOil and Energy Equity Resources (EER) signed a memorandum of understanding (MOU) to facilitate the acquisition and resale of Nigerian crude oil.

Pursuant to the initiative, SacOil and EER, was awarded a 12- month term contract for the purchase of Nigerian Crude Oil Grades by the Nigerian National Petroleum Corporation (NNPC).

The joint venture company, SacOil Energy Equity Resources (SEER), will act as the contracting party to an agreement with the NNPC for the purchase and onward sale of Nigerian crude oil. SEER’s off-take levels will depend on the aggregate crude production in Nigeria as well as the global oil price.

SacOil said in a media statement at the weekend, that the partners have been evaluating a number of opportunities that could provide sustainable revenue returns.

SacOil is pleased to announce the formation, at a minimal capital cost to SacOil, of a joint venture company with EER called SacOil Energy Equity Resources Limited (SEER). SEER is the contracting party to the agreement for the sale and purchase of Nigerian Crude Oil with the NNPC (“the Crude Oil Agreement”).

The company said that the Crude Oil Agreement provides SEER with the right to acquire crude oil from NNPC for onward sale.

According to SacOil, the amount of off take by SEER is dependent on the aggregate crude production in Nigeria and the prevailing global oil price.

It added that the revenue generated from the sale of the crude allocation will contribute meaningful income to SacOil and will support SacOil’s growth and investment strategy across the oil and gas value chain on the African continent.

Commenting on the Crude Allocation, SacOil’s CEO Dr Thabo Kgogo said:

“This announcement is aligned with our previously communicated strategy to focus on cash generative, income producing activities in both upstream, refining and downstream. Nigeria is a prolific hydrocarbon nation and the largest exporter of crude oil on the African continent.

“We are pleased to have secured this crude allocation for trading as it provides us with a structured and measured exposure to this attractive market. We look forward to working with EER and the NNPC in future opportunities in the Nigerian oil and gas sector.”

SacOil is a South African based independent African oil and gas company, dual-listed on the JSE and AIM, with business operations in Egypt, the Democratic Republic of Congo (DRC), the Republic of Malawi and the Republic of Botswana.

The Public Investment Corporation (SOC) Limited (PIC) is the largest shareholder of SacOil. SacOil has partnered with the PIC, ENH, Profin and Chinese Pipeline Petroleum Engineering on a project that entails the construction of a gas pipeline from Mozambique to South Africa and the distribution and marketing of gas in southern Africa. SacOil continues to evaluate upstream, refining and downstream opportunities in other established and prolific hydrocarbon basins in Africa.