Bestaf is a subsidiary of MRS Holdings Ltd.
Afreximbank and a Bestaf company signed a
memorandum of understanding, MoU, a year ago for $1 billion to support the
firm’s commercialisation of the gas deposits in OML 86 and 88 under an
agreement with the NNPC.
The NNPCL has revealed that the firm funded
its purchase of oil blocks from Chevron Corp., offering an insight into how the
firm could back its ambitious expansion plans.
A subsidiary of MRS Holdings Ltd Bestaf
provided the $300 million to buy two shallow-water licenses divested by
Chevron, according to NNPCL’s most
recent financial statements.
The transaction was completed in May and
the financing is secured against crude from producing fields within NNPC’s
portfolio, it said.
The forward sale agreement was concluded
between NNPC and Bahamas-registered Bestaf Funding Ltd, according to the
financial statements and an emailed response from NNPC’s chief financial
officer, Umar Ajiya.
Bestaf is a group of companies that are
part of MRS, a Lagos-headquartered conglomerate belonging to the family of
Sayyu Dantata, the 53-year-old younger half-brother of Africa’s richest person,
Aliko Dangote.
MRS is active in the storage, retailing and
distribution of petroleum products, and one of its subsidiaries is among the firms
with which the NNPC swaps crude for imported gasoline to meet Nigeria’s needs
of the fuel.
Bestaf companies develop real estate,
manufacture lubricants, store shipping containers and provide support vessels.
MRS and Bestaf didn’t respond to requests
for comment.
Expansion Plans.
Recently transformed into a fully
commercial venture, the NNPCL is looking to grow its presence throughout
Nigeria’s energy sector. The company purchased Chevron’s 40 per cent operating
stakes in the licenses Oil Mining Leases 86 and 88 after preempting
negotiations between the US major and local firm Conoil Producing Ltd. The NNPC
is also trying to buy four blocks that Seplat Energy Plc agreed in February to
acquire from Exxon Mobil Corp. for $1.3 billion.
Ajiya declined to comment on whether the
financing model used to take over Chevron’s permits could be emulated to
purchase Exxon’s assets, saying such a disclosure “would amount to intrusion
into our business strategy.”
The NNPC will repay Bestaf over 4.5 years
and is expected to deliver 8,000 barrels of crude per day to Dantata’s company
throughout the duration of the contract between the parties, according to the
financial statements.
The oil is the “sole repayment guarantee”
and will be lifted by an MRS unit operating as Bestaf’s trading agent,
according to Ajiya.
The proceeds shall be deposited into a
designated account held at the African Export–Import Bank “for regular
repayment,” he said.
Afreximbank loaned Bestaf the $300 million
to fund NNPC’s asset purchase, according to Ajiya. -Leadership