Transnational Corporation of Nigeria Plc announced today that it has entered an agreement with Sacoil Holdings Limited (now Efora Energy Limited, “Efora”) to settle all existing legal disputes around its Oil Prospecting Licence 281 (“OPL 281”). Transcorp will pay a total sum of $5.5m.
This disclosure was made by the company in a press release which was signed by the company’s secretary, Mr Chike Anikwe.
According to the information contained in the statement, the agreement provides for the full and final settlement of all disputes and claims of both parties in connection with a participating interest in OPL 281 previously assigned to Efora in October 2006.
The resolution of the dispute is significant, given that it is one of the legacy issues which the core investor that took over Transcorp in 2011 inherited, and has been taking steps to resolve.
However, under the terms of the announced settlement, both parties agreed to forgo their respective claims against each other and discontinue pending lawsuits and arbitration in relation to their claims. In addition, Transcorp will pay a total sum of $5.5m over a period of thirteen months to Efora.
Commenting on the development, President/CEO of Transcorp, Owen Omogiafo, said:
“I am glad that the mutual understanding that resulted in our partnership at inception, has brought about this win-win resolution with great potential for future cooperation.
We see this as a significant development that will pave way for our planned development and optimization of the Oil & Gas asset without legal constraints.
“OPL 281 remains a prolific asset that will contribute substantially to the performance of the company upon completion of its development.”
However, Efora’s CEO, Damian Matroos said:
“I am happy to have brought this matter to a close during these challenging economic times and this removes one more legacy issue for the Group.
The conclusion of this matter and the receipt of these funds would also allow the Group to allocate more time and resources to invest in new initiatives to generate value for our shareholders.”
One of the underlining strengths of the Transcorp Group is the quality of its assets, and the OPL 281 oil block is a significant part of its portfolio. It recently added to its energy asset mix, a 1000MW power generation plant – Afam Power, making it the leading power producer in Nigeria with a combined installed capacity of 1936MW across its power plants.