Mercuria pumps $200m to acquire 17% equity in Forte Oil

Nigeria’s energy sector has received a big boost as Mercuria Energy Holding SA, the world’s third largest independent energy trader and asset operator, acquires 17 percent equity in Forte Oil plc, in an investment valued at $200 million.

Through this investment, Forte Oil plc has secured additional working capital to continue its meteoric growth and dominance in the downstream sector, upstream services, power generation and upstream exploration in its bid to become Nigeria’s premier integrated energy solutions provider.

Mercuria’s investment has come at an auspicious time when equitable funding and expertise are needed to expand and intensify Forte Oil’s market penetration to give the company the leverage to further create a positive impact for all shareholders.

“This is another step towards projecting Forte Oil plc as the investment of choice as reflected in our mission statement,” said Forte Oil plc, in a statement obtained by BusinessDay last night.

The investment, which has been approved by the Nigerian Stock Exchange and the Securities and Exchange Commission, is geared towards improving the group’s working capital and will be used for the expansion of the downstream and power generation businesses in Nigeria, as well as position itself for future opportunities in the Nigeria oil and gas sector.

Mercurial’s new stake in Forte signifies the company’s inroad into the West African energy sector and underscores improvement in investor confidence in Nigeria’s oil and gas sector.

Mercuria Energy Group Holdings SA was founded in 2004 by Marco Dunand and Daniel Jaeggi, then executives at Phibro—the commodities trader sold by Citigroup to Occidental Petroleum in 2009–and previously at Goldman Sachs.

Until 2007, Mercuria was called the J&S Group and focused mostly on oil trading. Its core business is sourcing, supplying and trading crude oil and refined petroleum products, electrical energy, and transport storage as well as delivery of goods.

Similarly, Forte Oil plc, formerly known as African Petroleum plc, changed its name to Forte Oil Plc in December 2010.  Incorporated in 1964, Forte Oil markets refined petroleum products for automobiles and machines. It also operates various services, including retail petroleum product marketing, industrial fuels and lubricants marketing, among others.