Nigerian energy company Oando is eying 1.2 billion barrels of oil and 10.7 trillion cubic feet of gas after completing a $783 million acquisition in Nigeria, BusinessDay’s findings have revealed.
Oando – whose shares also trade in Johannesburg – acquired Nigerian Agip Oil Company (NAOC), on August 25, 2024, giving Oando control of a number of oil and gas assets in Nigeria.
The deal is expected to boast the Oando’s existing stakes in Oil Mining Licenses (OMLs) 60, 61, 62, and 63 from 20 percent to 40 percent.
This expansion broadens Oando’s ownership across all NEPL/NAOC/OOL Joint Venture assets, which include 40 discovered oil and gas fields, 24 of which are currently producing.
Read also: Oando acquires 100% equity stake in Nigerian Agip Oil Company
Additionally, Oando now holds stakes in key infrastructure assets, including approximately 1,490 kilometres of pipelines, three gas processing plants, the Brass River Oil Terminal, and the KwaleOkpai power plants with a combined capacity of 960 MW.
Based on 2022 data, Oando’s total reserves will almost double from 505.6 million barrels of oil equivalent to 999.2 million boe. Afreximbank said the four OMLs have produced 4.4 billion barrels of oil and 12 trillion cubic feet of gas to date, with 1.2 billion barrels of oil and 10.7 Tcf of gas remaining.
Accordingly, the deal was partly facilitated by Afreximbank with a senior credit facility of $500 million and a junior reserve-based lending facility of $150 million.
“African Export-Import Bank (Afreximbank) has successfully arranged a senior US$500-million and a junior US$150-million reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited. The facility was used to finance Oando’s acquisition of the 20 per cent participating interest held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria.
“The joint venture, with significant oil and gas assets, including oil mining licenses 60, 61, 62 and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining,” the bank said.
Read also: Afreximbank facilitates $650m financing for Oando’s acquisition of NAOC
Strategic Importance
Wale Tinubu, group chief executive of Oando Plc, highlighted the significance of this acquisition as the culmination of a decade-long effort that began with Oando’s acquisition of ConocoPhillips’ Nigerian assets in 2014.
Tinubu stated, “This is a win for Oando and every indigenous energy player as we take our destiny in our hands and play a pivotal role in the next phase of Nigeria’s upstream evolution.”
He further emphasised Oando’s commitment to optimizing the acquired assets’ potential while maintaining a focus on responsible practices, sustainable development, and contributing to Nigeria’s goal of boosting oil production.
Oando has cautioned that while it believes the acquisition will yield significant benefits, the transaction involves inherent risks and uncertainties. These include potential changes in project parameters, the future price of crude oil, and risks associated with international operations. The company advised investors to consider these factors when evaluating its future prospects.
Despite the uncertainties, Oando remains optimistic about the acquisition’s potential to drive growth and value creation, particularly as it explores diversification opportunities in clean energy, agri-feedstock, and energy infrastructure.
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