Oando  Completes $783 Million Acquisition of Eni’s Subsidiary, Nigerian Agip Oil Company

*Pledges to optimise assets to boost Nigeria’s oil output

Emmanuel Addeh in Abuja

Oando Plc, one of Nigeria’s leading indigenous energy solutions providers, yesterday announced the successful acquisition of Eni’s Nigerian subsidiary, Nigerian Agip Oil Company (NAOC) for $783 million.
This significant milestone, achieved in a signing ceremony in London, it said, marked a new era for the Nigerian energy sector, describing it as a watershed moment for indigenous oil and gas players.

Oando stated that 68 years after the discovery of oil in Oloibiri, it is  now poised to lead and operate oil and gas assets previously dominated by International Oil Companies (IOCs) in Nigeria.
The transaction, first announced in September 2023, it said, promises a brighter future for the company and industry alike.
“It is rather uncanny that this acquisition comes exactly a decade after Oando’s landmark $1.8 billion acquisition of ConocoPhillips’ Nigeria interest, a transaction which incidentally made the company a Joint Venture (JV) partner on the asset alongside NNPC E&P Ltd (NEPL) and NAOC.
“The ConocoPhillips transaction propelled Oando’s production from approximately 4,500 barrels of oil per day to 50,000 barrels of oil per day at the time,” the firm added.

Speaking on NAOC’s acquisition, the Group Chief Executive of Oando Plc, Wale Tinubu, said: “Today’s announcement is the culmination of 10 years of hard work, resilience, and an unwavering belief that we would realise our ambition. It is a win, not just for Oando, but for every indigenous energy player as we take our destiny in our hands.

“This is a new dawn for the Nigerian energy sector, and we are confident that indigenous companies will play a pivotal role in this next phase of the nation’s upstream evolution. With our assumption of the role of operator, our immediate focus is on optimising the assets’ immense potential in contributing to our strategic objectives, whilst complementing the nation’s plan to boost production outputs.

“Looking to the future, we will continue to pursue strategic opportunities that provide enhanced growth and value creation for our stakeholders, particularly in clean energy, agri-feedstock sector, as well as infrastructure and mining.”
The transaction, Oando said, increases its current participating interests in Oil Mining Licences (OMLs) 60, 61, 62, and 63 from 20 per cent to 40 per cent and increases its ownership stake in the Joint Venture (JV) assets and infrastructure which include 40 discovered oil and gas fields, of which 24 are currently producing as well as approximately 40 identified prospects and leads.

It stated that the deal also involves 12 production stations, approximately 1,490km of pipelines, three gas processing plants, the Brass River Oil Terminal and the Kwale-Okpai phases 1 & 2 power plants, with a total nameplate capacity of 960MW, and associated infrastructure.
Furthermore, Oando said that it will significantly boost the company’s production reserves which currently stands at 505.6MMboe to 1.0bnboe.
In the last decade, international oil companies operating in Nigeria have pursued divestment strategies, focusing on exiting shallow water and onshore assets while maintaining interests in the deep waters.

The trend indicates an IOC exodus from mature African basins, driven by factors such as declining production and increasing operational risks.
 This is leading to a shift towards frontiers like Namibia and Guyana, where there are opportunities for less carbon-intensive projects and less risky offshore developments.
Oando said that Nigerian oil production had fallen well below its capacity of over 2 million bpd of crude and condensate due to rampant oil theft and sabotage in the restive Niger Delta, as well as underinvestment and sluggish exploration activity.

The country produced 1.47 million bPd in May 2024, according to the Platts OPEC Survey from S&P Global Commodity Insights.
Speaking in an interview with S & P Global Commodity Insights, Dr Ainojie Irune, Executive Director, Oando PLC & Chief Operating Officer, Oando Energy Resources, suggested that indigenous companies were well placed to rejuvenate the sector.

He said: “If you look at the local companies that have stepped forward… there’s no doubt that indigenous capacity exists.”
Given the successful completion of Eni’s divestment to Oando, which has set an industry precedent, Oando said it anticipates further asset divestments as other indigenous players intensify efforts to fulfil the requisite regulatory, financial and contractual conditions for transaction completion.

Aside Oando, Seplat Energy, in February 2022, announced an agreement for the acquisition of ExxonMobil’s entire share in its shallow water business, while indigenous player Chappal Energies in November 2023 announced that it had entered into a sale agreement with Norwegian oil company Equinor for its Nigerian entity.
In the same vein,  Shell agreed to sell its Nigerian onshore subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance Consortium for $2.4 billion.
These divestment deals are expected to bring in fresh capital, technology, and expertise, which will help to increase oil production, reduce carbon emissions, and create new opportunities for Nigerians in the industry.

Indigenous companies are also believed to possess a distinct advantage in terms of local knowledge, operational flexibility, and community relations. When coupled with global best practices, this advantage offers unparalleled opportunities to optimise value creation within the sector.
Speaking on indigenous participation,  Irune said: “My personal opinion is that having indigenous players will definitely improve issues around fairness and this need to engage in sabotage and theft. Collectively, independents can build a more cohesive and collaborative oil sector.”