Junior explorer Heritage Oil announced Wednesday that it has entered into a joint venture with Nigeria's Bayelsa Oil Company to establish an indigenous Nigerian oil company called Petrobay Energy.
Heritage said it expects the deal will allow it to be a "significant contributor" to the future development of Nigeria's oil and gas industry.
Heritage will hold a 45-percent equity interest in Petrobay, which will look to acquire production, development and exploration assets from international oil companies operating in Nigeria. The JV's offices will be established at Yenagoa, the capital of the state of Bayelsa – which is in southern Nigeria, where many of the country's largest crude oil and natural gas deposits are located. Heritage added that Petrobay will enable it to build upon its current interests in Nigeria.
The firm established a footprint in the country when it acquired a major interest in the OML 30 license through its interest in Shoreline Natural Resources; OML 30 is located onshore in the Niger Delta and contains eight producing oilfields and has been independently valuated to contain gross proved and probable reserves of more than 1.1 billion barrels. Heritage CEO Tony Buckingham commented in a company statement: "Heritage Oil is honored to be entering into a commercial strategic alliance with the state of Bayelsa through the joint venture, Petrobay, with Bayelsa Oil Company. Petrobay will be uniquely positioned to acquire and develop hydrocarbon assets in the Niger Delta, where we can bring exploration and production expertise that, harnessed with the energy and aspirations of the people and state of Bayelsa, will generate value and benefits for all stakeholders.
"Petrobay will develop close relationships with local communities and other stakeholders in the Niger Delta in recognition of the key role their support plays in securing assets and delivering safe, stable and productive operations. This alliance reinforces Heritage's commitment to a country with huge potential and the company is well placed to play a significant role in the future oil and gas industry in Nigeria."