Oando PLC has successfully finalized its acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy conglomerate Eni for a total of $783 million. The completion of this deal, confirmed through an official press release, marks a significant milestone in Oando’s long-term strategic objectives. The transaction includes both the reimbursement and consideration for the acquired asset.
This acquisition is set to strengthen Oando’s presence in Nigeria’s oil and gas sector, enhancing its operational scope and expanding its upstream capabilities. Notably, the deal follows the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) approval, which allowed Eni to proceed with the sale of its NAOC unit to Oando.
Key Transaction Highlights Between Oando Plc and Eni
- Increased Stake in Vital Oil Blocks: Oando’s acquisition has doubled its stake in Oil Mining Leases (OMLs) 60, 61, 62, and 63, increasing its participating interest from 20% to 40%. This expanded ownership covers all assets within the NEPL/NAOC/OOL Joint Venture, which includes 40 discovered oil and gas fields, with 24 currently in production.
- Enhanced Infrastructure Ownership: The deal also gives Oando a significant stake in key infrastructure, including approximately 1,490 kilometers of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai power plants, which have a combined capacity of 960 MW. This acquisition further bolsters Oando’s infrastructure presence in Nigeria.
- Significant Increase in Reserves: Oando’s total reserves have nearly doubled, rising from 505.6 million barrels of oil equivalent (MMboe) to over 1 billion barrels, representing a 98% increase based on 2022 reserve estimates.
- Immediate Cash Flow Impact: The acquisition is expected to generate immediate cash flow, significantly improving Oando’s financial position and liquidity.
Strategic Importance
Wale Tinubu, Group Chief Executive of Oando PLC, described the acquisition as the culmination of a decade-long effort, beginning with Oando’s purchase of ConocoPhillips’ Nigerian assets in 2014. Tinubu emphasized the importance of this acquisition, stating, “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 reiterated Oando’s commitment to optimizing the newly acquired assets while maintaining a focus on responsible practices, sustainable development, and contributing to Nigeria’s goal of increasing oil production.
Oando has, however, cautioned that the acquisition carries inherent risks and uncertainties, including potential changes in project parameters, fluctuations in the future price of crude oil, and risks associated with international operations. The company advised investors to consider these factors when assessing its future prospects.
Despite these uncertainties, Oando remains optimistic about the acquisition’s potential to drive growth and create value, particularly as the company explores opportunities for diversification in clean energy, agri-feedstock, and energy infrastructure.
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