SacOil, an African independent, upstream oil and gas company, has terminated its joint venture with Nigdel United Oil Company (Nigdel) of Nigeria, and consequently its participation in Oil Prospecting Licence (OPL) 233, offshore Nigeria.
The company had 20% in the licence. According to its press release, in line with SacOil’s strategy to focus on proven resources as a basis for growth, the company has embarked on a process of balancing and rationalising its portfolio of assets. The aim of the rationalisation is to restructure the company’s future capital requirements – focusing on cash generative assets and low risk exploration assets.
Accordingly, SacOil has the right to be refunded by Nigdel for all costs expensed to date on OPL 233. Consequently, SacOil has no future commitments and obligations associated with the appraisal of OPL 233.
OPL 233 is an offshore oil block that is located in the shallow marine area of the prolific Niger Delta region. It encompasses an area of approximately 126 square kilometres and is located in water depths ranging from 3 to 10 metres.
Dr Thabo Kgogo, CEO of SacOil, commented, “The termination of the joint venture in respect of OPL 233 is in line with the strategy communicated to shareholders previously; improves the Company’s financial position and will reduce future financial exposure emanating from such higher risk assets.
“With the expected return of capital from OPL 233 and OPL 281, combined with SacOil’s existing cash resources, the Company will be in a far stronger position to pursue its strategy of increasing production and focusing on cash generative assets.”