Oando completes acquisition of NAOC for $783m

Oando P says it has successfully completed the acquisition of a 100 percent shareholding interest in the Nigerian Agip Oil Company (NAOC) from Eni, an Italian oil major.

According to a statement on Thursday, the deal is worth $783 million — comprising consideration for the asset and reimbursement.

In September 2023, Oando announced plans to acquire the NAOC, but the deal was delayed due to the regulatory approvals required.

On July 3, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced that Oando had completed the acquisition of 100 percent shares of Eni in NAOC, adding that an announcement would be made soon.

On July 24, Eni confirmed it had received regulatory approval from the NUPRC for the sale of the assets.

In the statement, Oando said the acquisition is a significant milestone in its long-term strategy to expand its upstream operations and strengthen its position in the Nigerian oil and gas sector.

“The Transaction increases Oando’s current participating interests in OMLs 60, 61, 62, and 63 from 20% to 40%,” the statement reads.

“It increases Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure which include forty discovered oil and gas fields, of which twenty-four are currently producing, approximately forty identified prospects and leads, twelve production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the KwaleOkpai phases 1 & 2 power plants (with a total nameplate capacity of 960MW), and associated infrastructure.”

Based on 2022 reserves estimates, Oando said its total reserves stand at 505.6 million barrels of oil equivalent (MMboe) and the transaction would deliver a 98 percent increase of 493.6 MMboe — bringing the total reserves to 1 billion MMboe.

According to the statement, the transaction is immediately cash-generative and would contribute significantly to the company’s cash flows.

Wale Tinubu, the group chief executive officer (CEO) of Oando, said the announcement represents 10 years of toil, resilience, and an unwavering belief in the realisation of the company’s ambition since the 2014 entry into the joint venture via the acquisition of Conoco-Philips Nigerian portfolio.

“It is a win for Oando, and every indigenous energy player, as we take our destiny in our hands, and play a pivotal role in this next phase of the nation’s upstream evolution,” he said.

With the assumption of the role of operator, he said Oando’s “immediate focus is on optimizing the assets’ immense potential, advancing production and contributing to our strategic objectives”.

“This we will do while prioritizing responsible practices and sustainable development in ensuring a balanced approach to our host communities, and environmental stewardship as we complement the nation’s plan to boost production output,” Tinubu said.

Tinubu said the company would continue strategic diversification in the energy sector, focusing on clean energy, agri-feedstock, energy infrastructure, and mining for enhanced growth and value creation.