"We have made considerable progress, with production levels steadily increasing, reaching 45,000 bpd, and with oil losses and theft being reduced to under 15%."

Osa Igiehon

CEO, HEIRS ENERGIES

March 27, 2024

Can you provide an overview of Heirs Energies and its operations?

Heirs Energies operates under the umbrella of Heirs Holdings, a conglomerate involved in diverse sectors, including financial services. Our overarching goal is to effect positive change in Africa by transforming lives and driving socio-economic development. The decision to venture into the energy sector stemmed from a recognition of the pivotal role energy plays in empowering African communities. Heirs Energies’ journey into the energy sector commenced with the acquisition of the OML-17 lease in early 2021 for US$1.2 billion. With over a billion barrels of oil and 2.4 trillion cubic feet of gas, OML-17 holds immense potential. 

After the takeover of OML-17, we faced challenges with evacuating crude oil from the site, resulting in over 95% of production being lost or stolen at one point. Faced with these challenges, we decided to temporarily suspend production to address the underlying issues comprehensively. During this hiatus, we collaborated with stakeholders, including the government, to implement robust security measures and repair infrastructure, including the pipeline. This collaborative effort helped us navigate these challenges.

By late October 2022, we successfully resumed production, and throughout 2023 we focused on stabilizing operations and enhancing efficiency. We have made considerable progress, with production levels steadily increasing, reaching 45,000 bpd, and with oil losses and theft being reduced to under 15%.

Our operational footprint primarily spans Rivers State, where OML-17 is located. Despite OML-17’s long history, we have applied innovative approaches to maximize the asset's value and minimize environmental impact. Moreover, our focus extends beyond oil production. We recognize the importance of gas supply in driving economic growth and powering industries. As such, we have expanded our gas supply to support power generation and industrial activities, particularly in Eastern Nigeria.

How do you plan to eliminate the remaining theft in your production process and how has Heirs Energies navigated the current currency fluctuations in Nigeria?

Addressing crude theft in our production process requires a multifaceted approach involving collaboration with government agencies and a focus on enhancing security measures. While commendable progress has been made thanks to initiatives by the NNPC and the Federal Government, achieving complete elimination of theft remains a challenge. 

The fluctuating exchange rates pose challenges across various aspects of our business, including procurement, financial planning, and stakeholder engagements. We are closely monitoring the situation and implementing measures to manage risks effectively. 

Can you share Heirs Energies’ approach to ESG and the reduction of routine gas flaring?

We understand that our operations impact not just our company but also the communities and ecosystems in which we operate. Therefore, we prioritize building strong, collaborative relationships with our host communities based on principles of mutual respect and appreciation. Initially, this involved a shift from historical ‘pay for peace’ agreements to the more inclusive Host Community Development Trust (HCDT) model, that is supported by the new petroleum law. This transition was not without challenges, given historical mistrust. However, through consistent efforts, we are resetting these relationships, with a focus on long-term partnerships rather than short-term gains.

Our commitment to reducing gas flaring goes hand in hand with our broader ESG goals. We have set ambitious targets to eliminate flaring ahead of the government's timeline. Currently, we are implementing solutions across five flaring hotspots, leveraging both governmental programs and proprietary initiatives. For instance, we are engaged with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Nigerian Gas Flare Commercialization Program (NGFCP) to address flaring in certain fields. Additionally, we are exploring innovative technologies and localized solutions to tackle flaring in other areas. 

How do other companies within Heirs Holdings, such as Transcorp, complement Heirs Energies?

The complementary relationship is mainly with the power companies within the Heirs Holdings portfolio. Specifically, Transcorp Power and the TransAfam Power Plant. With these two entities, Heirs Holdings owns approximately 15.5% of Nigeria's installed power generation capacity. Notably, we also provide feed gas to Transcorp Group. This alignment supports our overarching goal of empowering Africa with energy. Heirs Holdings’ investment in the energy sector spans primary energy sources, power generation, and distribution. While the government oversees transmission, our focus is on distribution, as exemplified by our parent company, Heirs Holdings’ investment in the Abuja Electricity Distribution Company.

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