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DMEA: Nigerian gas grants Aramco closed the purchase of a 70% stake in
Nigeria wants to encourage the use of com- petrochemicals giant SABIC in June from the
pressed natural gas (CNG) as a vehicle fuel, to state.
reduce its fuel import bill and bring down costs
for motorists. If you’d like to read more about the key events shaping
The country’s central bank is offering a the downstream sector of Africa and the Middle East,
NGN250bn ($648mn) stimulus package that then please click here for NewsBase’s DMEA Monitor.
aims to make CNG the “fuel of choice” for trans-
portation, and make LPG the favoured option European M&A activity
for domestic cooking, captive power and small Premier Oil is in financing talks with its rival
industrial complexes. It also wants to scale up Chrysaor, potentially leading to a merger
gas-based industries such as petrochemicals. between two of the UK’s biggest oil and gas
Investors can access the fund, which has a producers. PGNiG has
10-year maximum tenor, at interest rates of no Bloomberg reported on September 15 that
more than 5%, until the end of February next the company, saddled with just under $2bn of continued its
year. After that point rates will rise to 9%. net debt, had held initial talks with Chrysaor on
Nigeria has some 5.3 trillion cubic metres in an all-or-partial merger of the two businesses. Norwegian
proven gas reserves, according to its own esti- Premier has confirmed these talks, but said its
mates, but so far investment in gas production preference was to follow through with a prelim- buying spree,
and infrastructure has been weak. The govern- inary deal reached with creditors in late August announcing a
ment wants to capitalise much more on this to refinance over 45% of its debt.
resource, by encouraging consumption in many However, talks with Chrysaor and others on deal to acquire
areas. alternative financing solutions will nevertheless
Nigeria also hopes that using CNG will be continue, Premier said. High debt levels were a small stakes in
a cheaper option than more traditional motor concern of Premier’s creditors even before the two producing
fuels. The government has recently ended sub- pandemic struck. But this has not stopped the
sidies for domestic fuel supplies – a move neces- company from pursuing a takeover of BP assets fields from Shell
sary to spur investment in refining but one that in the North Sea.
will increase costs for motorists. Meanwhile, PGNiG has continued its Norwe-
Meanwhile in Saudi Arabia, two petrochem- gian buying spree, announcing a deal this week
ical firms are considering a merger after sustain- to acquire small stakes in two producing fields
ing heavy losses, raising the prospect of further from Royal Dutch Shell for an undisclosed sum.
consolidation of the kingdom’s downstream PGNiG has been building up its position on
industry. the Norwegian shelf in recent years, obtaining
Saudi Industrial Investment Group (SIIG) resources to fill its 10bn cubic metre per year Bal-
said on September 20 that its board of direc- tic Pipe project to Poland. The pipeline is due to
tors had approved initial talks on a tie-up with start flowing gas in October 2022
National Petroleum Co. (Petrochem). No agree- In a statement on September 21, PGNiG
ment has been reached and it is yet to be decided said it had agreed to take a 6.45% interest in the
what structure the deal might take, SIIG said in a Kvitebjorn field and a 3.225% interest in the adja-
filing on the Saudi Stock Exchange. cent Valemon field. It will also gain interests in
Such a transaction would mark the latest in the infrastructure used to transport the fields’
a series of mergers and acquisitions in the Saudi output.
petrochemicals industry. Most recently, Saudi Production at both fields is in decline.

P8 www. NEWSBASE .com Week 38 24•September•2020