Oando completes $783 Million acquisition of Nigerian Agip Oil Company

Oando PLC has successfully finalized the acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni for a total of $783 million.

This significant milestone aligns with Oando’s long-term strategy to strengthen its position within Nigeria’s oil and gas sector.

In a press release, Oando confirmed the completion of the transaction, which includes reimbursement and consideration for the acquired assets.

The acquisition enhances Oando’s operational footprint, significantly expanding its upstream capabilities in Nigeria.

This transaction was approved by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), allowing Eni to proceed with the sale. NAOC, prior to this acquisition, focused on onshore oil and gas exploration, production, and power generation within Nigeria.

Key Transaction Details

– Increased Stake in Oil Blocks: Oando’s participating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 has doubled from 20% to 40%.

This acquisition includes 40 discovered oil and gas fields, with 24 currently producing, thus bolstering Oando’s stake in the NEPL/NAOC/OOL Joint Venture.

– Enhanced Infrastructure Ownership: Oando now owns a significant share of critical infrastructure, including nearly 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the KwaleOkpai power plants with a combined capacity of 960MW.

– Increased Reserves: The deal has nearly doubled Oando’s total reserves, pushing them from 505.6 million barrels of oil equivalent (MMboe) to over 1 billion barrels, reflecting a 98% increase based on 2022 estimates.

– Immediate Financial Impact: The acquisition is expected to generate immediate cash flow, enhancing Oando’s financial position and boosting its overall cash reserves.

– Strategic Importance:

Wale Tinubu, Group Chief Executive of Oando PLC, underscored the strategic importance of this acquisition, marking it as the culmination of efforts dating back to Oando’s acquisition of ConocoPhillips’ Nigerian assets in 2014. He described the deal as a pivotal moment for Oando and other indigenous energy players, emphasizing the company’s role in Nigeria’s upstream sector’s evolution.

Tinubu also reaffirmed Oando’s commitment to maximizing the potential of the newly acquired assets, focusing on responsible practices, sustainable development, and contributing to Nigeria’s goal of increasing oil production.

However, Oando cautioned that the transaction carries inherent risks and uncertainties, including potential shifts in project parameters, fluctuations in crude oil prices, and challenges associated with international operations. The company advised investors to consider these factors when assessing its future prospects.

Despite these challenges, Oando remains optimistic about the acquisition’s potential to drive growth and create value, particularly as it explores diversification opportunities in clean energy, agri-feedstock, and energy infrastructure.