Strategic Financing: MCB supports Chappal Energies' landmark offshore acquisition in Nigeria

19 DEC 2024

Strategic Financing: MCB supports Chappal Energies' landmark offshore acquisition in Nigeria

MCB has contributed USD 120m to a USD 360m facility to finance Chappal Energies' acquisition of Equinor's offshore infrastructure in Nigeria, including stakes in major oil fields operated by Chevron.
This strategic deal highlights MCB's growing expertise in energy financing across Africa, positioning it as a key player in high-impact transactions.
The acquisition empowers Chappal Energies to expand its role as a national champion in Nigeria's energy sector, aligning with the country's vision for universal energy access by 2030.

Background

Chappal Energies, an indigenous Nigerian oil and gas (O&G) company, focuses on brownfield upstream opportunities in Africa. The acquisition, involving Equinor's offshore infrastructure, includes operational rights and a 53.85% ownership in OML 128 and OML 129 fields, alongside a unitized 20.21% stake in the Agbami field. Operated by Chevron, the Agbami field is one of Nigeria’s largest deep-water oil fields, having produced over one billion barrels of oil since its inception in 2008.

This milestone achievement, part of a USD 1.2bn acquisition supported by MCB's USD 120m contribution, marks a significant step for Chappal Energies as an indigenous company acquiring offshore assets operated by a major international oil company. As global players shift focus toward integrated gas and offshore operations in Nigeria, the opportunity for local champions like Chappal to lead the industry aligns with Nigeria’s vision of achieving universal energy access by 2030.

MCB's Strategic Role

MCB played a critical role in this landmark transaction, reaffirming its position as a leading financial institution in Africa's energy sector and highlighting the strength of the Mauritius International Financial Centre (MIFC). MCB contributed USD 120m as a senior lender, and held the roles of security agent, and account bank, showcasing its capabilities across multiple roles.

The Bank’s Energy and Commodities team, consisting of specialised senior bankers, successfully executed the deal within a short timeframe, leveraging its deep understanding of the O&G value chain, established relationships with operators, and expertise in structuring similar transactions. The deal team included Avanish Gukhool, Associate Director leading the transaction, alongside Jean Laurent Pyndiah, Keshav Sathyasheel Tohooloo from Specialised Finance, Ricky Kaniah and Ashna Bhudu from Credit Analysis and Structuring, and Sapna Dwarka, Legal Manager.

Thierry Hebraud, CEO, MCB Ltd, noted: "MCB is proud to support Chappal Energies in this strategic and transformational acquisition for the company. This transaction aligns with our strategy to support the energy requirements of African economies and their transition endeavours. As a Mauritian, and African Bank, MCB is delighted to facilitate and contribute to the emergence of national champions with the technical expertise and financial capabilities to drive the future of their industries."

Youri Harel, Executive Director | Structured Debt and Power & Infrastructure, Specialised Finance, MCB Ltd, added: "The extent of our involvement in this deal underscores the growth of our internal capabilities throughout the years and our increasing role in high-level impact transactions."

Results of the Deal

The acquisition empowers Chappal Energies to unlock new growth opportunities across Africa and strengthens its position as a key contributor to Nigeria’s energy sector. The financing will allow Chappal to optimize operations within the acquired offshore fields, increase production capacity, and invest in technological advancements to enhance efficiency. This expansion also supports Nigeria’s broader energy goals, including the push for universal energy access and sustainable growth in the oil and gas sector.

Ufoma Immanuel, Managing Director of Chappal Energies, emphasized: "MCB remains a crucial partner for Chappal. The Upstream team is fully integrated into our strategic thinking from the inception of ideas and collaborates effectively across the value chain, from transaction structuring to deal execution. We are confident that this relationship will continue to strengthen and grow in the foreseeable future."