Shoreline Group, Nigerian oil producer, has halted plans to issue $500 million Eurobonds and also trim staff as Africa’s biggest economy struggles with plunging prices for the fuel.
The chief executive officer of the company,Kola Karim, revealed this in an interview in Lagos.
In mid 2015, Shoreline executives went on a two-week roadshow in the United States and Middle East to discuss a debut issue of 5- to 7-year debt to buy oil and gas assets across Africa.
Now with Brent crude trading below $30 a barrel and Nigeria’s central bank imposing restrictions on the amount of dollars businesses can obtain, Shoreline plans to cut 35 per cent of its nearly 2,000 staff to survive the tough conditions, Karim said.
“We went on a roadshow and the world of oil collapsed. We’re going to wait until the end of the first quarter and see how stable markets are. Mid-last year, our projections were $60-dollar oil for the next five years,” he said.
Founded in 1997, Shoreline is one of several local businesses that bought fields in the oil-rich Niger River Delta region after foreign companies, including Royal Dutch Shell Plc, Total SA, and Eni SpA sold onshore assets.
With oil’s plunge, Karim said Shoreline is cutting production to 17,000 barrels per day for the rest of the year from 52,000 barrels per day.