Petrofac pays £63m for stake in Seven

OIL services company Petrofac is poised to invest in a Nigerian production and development company as part of its strategy to gain a foothold in Africa's largest oil-exporting nation.

The London-listed firm has agreed to pay $100 million (63m) in cash to acquire 15 per cent of Seven Energy International. That equates to 12.6 per cent on a fully diluted basis, which reflects the value of the stake if all outstanding convertible bond and stock options were exercised.

Existing and other new investors have agreed to pump a further $50m into Seven to help it develop its production, processing and transportation system.

Petrofac has the right to invest up to a further $52m in the firm, which has a portfolio of natural gas and oil assets, taking its interest to 19.2 per cent on a fully diluted basis, subject to the firm meeting certain performance conditions.

Gordon East, managing director of Petrofac Production Solutions, will gain a place on Seven's board, and the agreement could also see the two firms join forces to co-invest in Nigerian projects.

Ayman Asfari, Petrofac's chief executive, said: "Nigeria is a high growth market where we have been seeking commercial opportunities for some years."