Oando PLC has successfully finalized the acquisition of Nigerian Agip Oil Company from Italian energy conglomerate Eni, marking a pivotal moment in the company’s growth trajectory.
The transaction, valued at $783 million, underscores Oando’s commitment to strengthening its presence in Nigeria’s oil and gas industry.
This was disclosed by the company in a press release, according to Nairametrics.
Oando highlighted the completion of the deal, which encompasses both reimbursement and consideration for the asset. This strategic acquisition is set to significantly bolster Oando’s upstream operations
This strategic acquisition is set to significantly bolster Oando’s upstream operations, positioning the company as a more formidable player in the sector and reinforcing its long-term objectives within the Nigerian market.
Recall that Italian oil major Eni announced that the Nigerian Upstream Petroleum Regulatory Commission had approved the sale of Nigerian Agip Oil Company, an entity of Eni, to Oando.
Eni said NAOC focuses on onshore oil and gas exploration and production as well as power generation in Nigeria.
The acquisition significantly increases Oando’s participating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63, doubling its stake from 20% to 40%. This expansion grants Oando greater ownership in all NEPL/NAOC/OOL Joint Venture assets, which include 40 discovered oil and gas fields. Notably, 24 of these fields are currently producing, further solidifying Oando’s operational capacity and influence in Nigeria’s energy sector.
Oando now has a stake in vital infrastructure, including approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the KwaleOkpai power plants (960MW capacity). This acquisition further strengthens the company’s infrastructure footprint in Nigeria.
Based on reserve estimations for 2022, Oando’s total reserves have increased by 98%, from 505.6 million barrels of oil equivalent to over 1 billion barrels.
The Group Chief Executive of Oando PLC, Wale Tinubu emphasized the acquisition’s significance, noting that it marks the end of a ten-year endeavor that started in 2014 when Oando acquired ConocoPhillips’ Nigerian assets.
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 also underlined Oando’s dedication to realizing the full potential of the purchased assets while keeping an eye on ethical behaviour, sustainable development, and supporting Nigeria’s objective of increasing oil output.
Oando has issued a cautionary note regarding the acquisition, acknowledging the potential for substantial benefits while also highlighting the inherent risks and uncertainties involved.
The company pointed to several factors that could impact the outcome of the transaction, including possible changes in project parameters, fluctuations in the future price of crude oil, and challenges related to international operations.
Oando advised investors to carefully consider these risks when assessing the company’s future prospects, emphasizing the importance of a balanced evaluation in light of these potential variables.
Oando is certain that the acquisition will spur growth and create value in spite of the risks, especially as it looks into chances for diversification in renewable energy, agri-feedstock, and energy infrastructure.
