World Bank Enters into $200M Deal with Seven Energy

Nigerian oil and gas company Seven Energy International Limited (Seven Energy) announced a $200 million (USD) deal with the World Bank related to the development of infrastructure development critical to Nigeria’s gas industry.

Nigerian oil and gas company Seven Energy International Limited (Seven Energy) announced a $200 million (USD) deal with the World Bank related to the development of infrastructure development critical to Nigeria’s gas industry.

Seven Energy and the Multilateral Investment Guarantee Agency (MIGA) created the deal; the MIGA is the political risk insurance and credit enhancement arm of the World Bank Group. The parties to the deal hope it will assist in delivering gas to the domestic market. To do this, MIGA will provide $200 million to aid Seven Energy. According to The Sun, analysts hail the deal for many reasons, including its strong environmental profile thanks to Seven Energy’s promise to reduce gas flaring and displace other fuels that are more polluting.

This deal is the latest in a series of deals between MIGA and other energy sector companies aimed at assisting in the development of jointly developed environmental solutions in line with the World Bank’s new environmental ideals. In addition to MIGA’s insurance, the World Bank will support Seven Energy’s endeavors with an IFC-managed fund invested in Seven Energy’s Nigerian operations.

Speaking about the deal, Chief Executive Officer of Seven Energy, Phillip Ihenacho, said MIGA’s involvement in this deal with the World Bank will provide the financial security necessary to allow it to invest in Nigeria’s gas sector for the long term. He went on to note that he believes this will help not only the private interests of Seven Energy, but also the citizens and nation of Nigeria, as well, as the investment will provide a boost to the economy as a whole.

Meanwhile, MIGA’s Executive Vice President and CEO, Keiko Honda, noted that Nigeria’s energy situation is “at a crossroads.” As a result, he felt that his agency’s intervention was necessary to ensure the African nation’s success in its efforts to reduce its negative impact on climate change as it moves through the process of industrialization.

Seven Energy’s processing facility and pipelines have already begun delivering gas to three power stations and two manufacturing plants, all of which expect to have a significant positive impact on the nation’s economy. Moreover, these plants should help bolster the Nigerian electrical infrastructure, which has suffered from severe energy shortages in recent years.

While most other oil and gas companies operating in Nigeria tend to focus more heavily on offshore oil deposits, where gas tends to be more of a side effect of the drilling process, Seven Energy seeks to harness this gas for more beneficial use. Rather than simply re-injecting the gas, liquefying it for export, or flaring it (simply burning it away), Seven Energy will use the gas to help power the nation and its other industry.

Despite Nigeria’s enormous natural gas reserves, only a third of the nation’s power supply derives from natural gas. This deal could change that, making Nigeria one of the most energy neutral and environmentally friendly countries in the developing world.