Petrofac to Expand in West Africa After Joint Project in Nigeria

Petrofac-LogoPetrofac Plc plans to expand operations in West Africa after securing its first joint project in Nigeria, Chief Executive Officer Ayman Asfari said.

Petrofac, which has so far focused on Tunisia, Algeria and Egypt, will help Nigerian production company Seven Energy Ltd. develop the Uquo and Stubb Creek fields to supply gas to local power generators. The U.K. field services provider has also been considering projects in Ghana and Gabon.

“Hopefully, as a result of this entry to Nigeria, this will be a nucleus for us to look at other opportunities in West Africa,” Asfari said in a phone interview. “Our early objective is to establish an engineering base and operation support base.”

London-based Petrofac plans to open an office in Nigeria and hire local staff, the CEO said. West African nations, such as Gabon and Angola, are stepping up requirements on oil companies to invest in local infrastructure and hire native contractors.

“On top of that we would hope to be able to learn how to manage an effective compliance program,” Asfari said. “We would hope to be able to provide services ultimately to other companies with the local content requirement being met.”

Explorers such as Tullow Oil Plc and Anadarko Petroleum Corp. are increasing exploration in West African waters. The geology that stretches from Mauritania to northern Namibia may hold 71.7 billion barrels of undiscovered oil, according to U.S. Geological Survey estimates.

Petrofac agreed to invest $100 million to acquire a 15 percent interest in Seven, it said in a statement last week. It may invest an additional $52 million to boost its stake in the company.

The two partners don’t have immediate plans to acquire fields which are being offered in Nigeria by Royal Dutch Shell Plc, Asfari said.

Shell plans to sell some of its onshore oil and gas fields in the country to focus on projects elsewhere, Chief Financial Officer Simon Henry said Oct. 28.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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