Investors may be pushing for well-structured upstream assets in Africa as Chappal Energies’ closed a combined $430 million reserve-based lending (RBL) package amidst tightening global financing conditions for oil and gas projects.
The financing, arranged through its subsidiary Chappal Investments Limited, comprises a $340 million senior secured RBL facility from a syndicate of international and African banks, alongside a $90 million junior secured RBL facility provided by a leading global commodities company.
Together, the organisation said in a release that the facilities materially strengthen Chappal’s balance sheet and provide long-term funding aligned with the company’s reserve base and projected cash flows.
A substantial portion of the proceeds will be used to refinance bridge financing linked to Chappal’s acquisition of Equinor’s Nigerian assets, a transaction that positioned the company among a growing group of indigenous and Africa-focused operators taking over divested assets from international oil companies (IOCs).
In Nigeria in particular, the withdrawal of IOCs from onshore and shallow-water assets has reshaped the upstream landscape, creating opportunities for well-capitalised local and regional players.
However, accessing long-term, dollar-denominated financing to support these acquisitions has remained a key constraint. Chappal’s ability to convert acquisition bridge debt into a structured RBL facility reduces refinancing risk and improves the sustainability of its capital structure.
Beyond refinancing, the facilities are expected to fund field development, production optimisation, and ongoing operational requirements across the company’s asset portfolio, providing flexibility to stabilise and potentially grow output.
The transaction is notable given the current global financing environment, where energy lending, particularly to hydrocarbon projects in emerging markets, has faced increased scrutiny from international banks amid energy transition pressures, higher interest rates, and tighter risk controls.
Against this backdrop, the successful close following extensive technical, legal, and commercial due diligence suggests strong lender confidence in the quality of Chappal’s reserves, its governance framework, and its operating discipline.
The inclusion of both international and African financial institutions also points to growing regional capacity to support complex upstream financing structures.
The organisation said reserve-based lending remains one of the few financing instruments still accessible to upstream companies in Africa, but lenders have become increasingly selective, favouring assets with clear reserve visibility, robust cash flows, and credible operators. Chappal’s deal suggests it meets these criteria at a time when many peers struggle to secure comparable funding.
