Heirs Energies Seals $750m Financing with Afreximbank to Boost Oil Production

¶ Elumelu hails deal as clear manifestation of African capital working for African businesses

¶Liquidity injection to raise firm’s oil output target to 100,000 barrels per day from 50,000 barrels over three years

¶Achieve 250 million standard cubic feet of gas from 120 million

¶ George Elombi reaffirms commitment to strengthen Africa’s energy sector

James Emejo in Abuja and Peter Uzoho in Lagos

Africa’s largest, indigenous energy company, Heirs Energies Limited, has sealed a $750 million financing deal with African Export-Import Bank (Afreximbank) in its quest for energy efficiency.

The agreement, signed by Chairman, Heirs Holdings, Mr.  Tony Elumelu, and President, Afreximbank, Dr. George Elombi, for their respective entities over the weekend in Abuja, aimed to propel Heirs into its next phase of growth.

Elumelu, however, hailed the deal as a “clear manifestation of African capital working for African businesses.

He further commended Elombi for coming through for all private sector leaders in the continent.

Elumelu chronicled Heirs Energies’ venture into oil and gas, highlighting the initial funding barriers it faced but which Afreximbank help played a catalytic impact in financing.

He admitted that the “story cannot be told without referencing Afreximbank’s catalytic growth support working with the African Finance Corporation (AFC) and other partners.

He also acknowledged that it is indeed tough to survive in businesses in Africa, praising Afreximbank for unprecedented impact.

Elumelu said, “No one can develop Africa; the most catalytic and impactful financial institution in Africa is Afreximbank. They have grown the capacity and boldness to support African businesses.”

He, therefore, urged private sector leaders to repay their loans promptly to open more opportunities for businesses in the continent.

He said, “To my fellow private sector leaders: when financial institutions support you, please, the least you owe them is to perform. If you perform, you encourage them to do more for you and others. And this is our mantra.

“Even when we had significant oil theft in our operations, we never defaulted in our payments. No private sector business in Africa without Afreximbank.

Further recounting the acquisition of Oil Mining Lease (OML) 17, he noted that the transaction encountered prolonged delays under the administration of former President Muhammadu Buhari, partly due to concerns that the asset was too large for private sector ownership.

Elumelu also said not a dollar came from UBA to finance OML 17, reaffirming the role of external financiers in the continent.

He said, “Our government at the time refused to approve it because it was considered too big for the private sector, forgetting that Shell itself was a private sector entity,” he said, adding that the delays imposed significant financial costs on the company.”

Nonetheless, Elumelu also said not a dollar came from UBA to finance OML 17, reaffirming the role of external financiers in the continent.

Elombi, however, reaffirmed the bank’s commitment to supporting businesses in Africa, that Afreximbank is currently working on the establishment of an Energy Bank which will handle most energy portfolio.

He said the bank was preparing additional billion-dollar interventions to stabilise the sector.

He said, “We will put tremendous capital into this and and we will ensure that it is also as good and innovative as Afreximbank itself.

Elombi said the bank’s support for Heirs Energies aligned with its broader commitment to strengthening Africa’s energy sector, which he described as critical to economic stability across the continent.

The Afreximbank President said, “If we did not support the energy sector, about 23 African countries would be in serious trouble”

He added that Afreximbank’s African ownership reinforced its resolve to remain a dependable partner in both favourable and challenging times.

Giving more insight into the deal, Executive Director/ Chief Financial Officer (CFO), Heirs Energies, Samuel Nwanze, said the financing was designed to “take us into the next phase of growth” by doubling outputs.

He said, “Currently, we are producing well over 50,000 barrels of oil per day and about 120 million standard cubic feet of gas.

“This financing is designed to take us into the next phase of growth. If you have been following our communications as a company, you will know that we believe the asset we are managing has the capacity to reach about 100,000 barrels per day.

“What we want to do is secure the capital required to grow the business, both organically and inorganically. This financing is therefore, meant to position the company for the next phase of growth that we see as achievable.”

He said, “Based on the potential we see in this asset, we believe it can deliver up to 100,000 barrels of oil per day.

“We are working towards achieving that production level over the next three years, while also delivering about 250 million standard cubic feet of gas.

“That is our outlook, and this financing will help us achieve these targets—not only from this particular asset, but also by enabling us to pursue other opportunities we see in the market.”

Nwanze further told THISDAY, “

We are an ambitious group, and we consistently look for growth opportunities. The core reason we are in the oil and gas business at Heirs Energy is to drive energy sufficiency for the African continent.

“Wherever we see opportunities to acquire assets that align with that broader vision, we intend to pursue them. That said, we are not speaking about any specific acquisitions at this time.”