Oando PLC has officially completed its acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni, marking a significant milestone for the company. The transaction, valued at $783 million, includes reimbursement and consideration for the asset, according to a press release confirmed by Oando. This strategic move is expected to enhance Oando’s operational footprint and bolster its upstream capabilities in Nigeria’s oil and gas sector.
As previously reported by PulseNets, this acquisition follows Eni’s announcement that it had received approval from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to divest its unit, NAOC, to Oando. NAOC’s focus has primarily been on onshore oil and gas exploration, production, and power generation within Nigeria.
NUPRC Confirms Acquisition Details
The NUPRC has also confirmed that Oando PLC has successfully acquired 100% of the shares of Nigerian Agip Oil Company Limited. In July, NUPRC Chief Executive, Engineer Gbenga Komolafe, disclosed that this divestment agreement marks a critical expansion for Oando, an indigenous energy solutions provider.
Key Transaction Highlights
- Increased Stake in Vital Oil Blocks: Oando’s acquisition raises its participating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 from 20% to 40%, effectively doubling its ownership in all NEPL/NAOC/OOL Joint Venture assets. This includes 40 discovered oil and gas fields, with 24 currently in production.
- Enhanced Infrastructure Control: With this deal, Oando gains a substantial stake in key infrastructure assets, including approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the KwaleOkpai power plants (with a 960MW capacity). As PulseNets reported, this acquisition significantly strengthens Oando’s infrastructure presence in Nigeria.
- Significant Boost in Reserves: Oando’s total reserves have soared from 505.6 million barrels of oil equivalent (MMboe) to over 1 billion barrels, representing a 98% increase based on 2022 reserve estimates.
- Immediate Positive Cash Flow Impact: The acquisition is anticipated to generate immediate cash flow benefits, considerably enhancing Oando’s financial standing.
Strategic Importance and Future Prospects
Wale Tinubu, Group Chief Executive of Oando PLC, described the acquisition as a monumental achievement that caps off a decade-long strategy initiated with Oando’s purchase of ConocoPhillips’ Nigerian assets in 2014. He emphasized that this is not just a win for Oando but for all indigenous energy players as the company takes control of its future and plays a pivotal role in the next phase of Nigeria’s upstream evolution.
Tinubu also underscored Oando’s commitment to optimizing the potential of the newly acquired assets while maintaining a focus on responsible practices, sustainable development, and contributing to Nigeria’s goal of increasing oil production.
Cautionary Note and Future Outlook
While Oando is optimistic about the acquisition’s potential for growth and value creation, the company also cautioned investors about inherent risks and uncertainties associated with the transaction. These include possible changes in project parameters, fluctuations in crude oil prices, and risks linked to international operations. PulseNets has noted that Oando advises investors to consider these factors when evaluating the company’s future prospects.
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Despite these challenges, Oando remains confident that this acquisition will be a significant driver of growth, particularly as the company explores diversification into clean energy, agri-feedstock, and energy infrastructure sectors.
