Oando PLC Acquires Nigerian Agip Oil Company For $783 Million is presently trending in the media space.
The Genius Media Nigeria reports that Oando PLC has successfully completed its acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni for a total consideration of $783 million.
The company confirmed via a press release that the deal has been completed representing a significant milestone in Oando’s long-term strategy. The transaction includes reimbursement and consideration for the asset.
The acquisition is expected to solidify Oando’s position in Nigeria’s oil and gas sector, enhancing its operational footprint and expanding its upstream capabilities.
Recall Italian Oil Major, Eni, reported it had received the approval of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to sell its unit, Nigerian Agip Oil Company (NAOC), to Oando.
Eni said NAOC focuses on onshore oil and gas exploration and production as well as power generation in Nigeria.
Key Transaction Details
Increased Stake in Key Oil Blocks: The acquisition boosts Oando’s participating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 from 20% to 40%. This expands Oando’s ownership in all NEPL/NAOC/OOL Joint Venture assets, encompassing 40 discovered oil and gas fields, of which 24 are currently producing.
Enhanced Infrastructure Ownership: 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.
Significant Increase in Reserves: Oando’s total reserves have jumped 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 transaction is expected to be immediately cash generative, significantly enhancing Oando’s financial position and cash flows.
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 emphasized 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.
