Separating Facts from Fiction in Wale Tinubu’s Oando-NAOC Story

For sometime, there have been various public narratives on Oando and its Group Chief Executive Officer, Wale Tinubu, which appeared to attempt to rewrite the recently history of the company and its founder. Emmanuel Addeh in this piece, argues that these imputations, including the one that Wale Tinubu is being favoured by the government because of his familial relationship with the current Nigerian leader, Bola Tinubu, are largely unfounded, given the evolution of the company that has spanned about 30 years.

Although it came with an apparent tinge of politics, the recent seeming attacks on Oando’s business operations vis-à-vis its acquisition and thereafter divestment in OVH as well as its acquisition of Nigerian Agip Oil Company (NAOC), have raised some dust.

But facts on the ground do not appear to support the ‘noise’  that has been made in the media that the company is thriving due to the undue favour it is getting from the Bola Tinubu administration.

As will be seen shortly, the Oando story did not start with the current government. In fact, there were other landmark achievements, including several acquisitions by the company before the Bola Tinubu administration,  which is barely 15 months old.

History of Oando

Oando, one of sub-Saharan Africa’s leading indigenous energy company based in Nigeria and a dual listing on both the Nigerian and Johannesburg stock exchanges, was formally floated in 1994.

But the story preceded even the year of its establishment. Traced back to 1956 as ESSO West Africa Incorporated, a petroleum marketing subsidiary of Exxon Corporation, Esso was then acquired by the Federal Government of Nigeria in 1976 and rebranded as Unipetrol Nigeria Limited, which eventually gave birth to Oando.

The real transformative journey of Oando has been a 30-year one, beginning with the establishment of Ocean and Oil Services Limited, whose focus was on the supply and trade of petroleum products both locally and internationally.

 In 2000, Ocean and Oil Holdings acquired a 30 per cent controlling interest in Unipetrol, later increasing it to 42 per cent in 2001. Following a further acquisition of a 60 per cent stake in Agip Nigeria Plc in 2002, Unipetrol and Agip Nigeria were merged in 2003, resulting in the formation of Oando.

One Company, Many Parts

Over the next decade, Oando subsequently built the largest indigenous integrated energy company in Sub-Saharan Africa.

These comprised Oando Marketing Limited, one of the largest downstream petroleum marketing companies in Nigeria with over 500 retail outlets across Nigeria, Ghana, and Togo.

There’s also Oando Supply and Trading Limited, incorporated in 2004, one of the largest independent traders of crude and refined petroleum products in sub-Saharan Africa.

 Besides, Oando Gas & Power Limited incorporated in 2004, is a pioneer in the development of Nigeria’s foremost gas distribution network, spanning 264km and serving over 150 industrial and commercial customers in Lagos, Calabar and Port Harcourt.

 For Oando Energy Services Limited incorporated in 2005, it is Nigeria’s largest indigenous oilfield services provider, enhancing indigenous participation with a fleet of five rigs while Oando Energy Resources is regarded one of Nigeria’s foremost indigenous upstream oil and gas companies.

Oando’s Upstream Journey

Oando’s upstream journey commenced 20 years ago, when in 2004, the company secured a 42.75 per cent interest in the marginal field, Oil Mining Licence (OML) 56. Subsequently, in 2007, it acquired a 15 per cent stake in OML 125 & OML 134.

Not done, in 2008, Oando acquired a 30 per cent interest in the Akepo marginal field, OML 90. This continued in 2009, when it further acquired an 81.5 per cent interest in Equator Exploration Limited, while in 2012, the Company was awarded a 100 per cent in Blocks in Sao Tome EEZ.

In 2014, the company achieved a significant milestone by acquiring ConocoPhillips Nigerian assets for $1.8 billion, inclusive of working capital, securing a 20 per cent interest in the NAOC-Joint Venture.

It augmented its total net 2P reserves to 503 million barrels of oil equivalent (mmboe), with peak net production levels of 45,000 barrels of oil equivalent per day (kboep/d).

In 2016, the company took a strategic decision, to divest from its naira earning businesses and to focus on its dollar earning portfolio, resulting in the phased sale of its interest in the downstream between 2016 to 2019, and its stake in the midstream in 2017.

In 2021, Oando Clean Energy Limited was established to design and deliver clean energy projects towards the realisation of the nation’s energy requirements and the United Nation’s Race to Net Zero.

Following the execution of a Memorandum of Understanding (MoU) between the company and the Lagos state government to replace the state’s mass transit bus system with electric mass transit buses along with the supporting infrastructure, in May 2023, the company rolled out two electric mass transit buses in fulfilment of the Proof-of-Concept Phase, with 552 buses to be secured by the end of 2023.

Acquisition of NAOC

In August 2024, 10 years after the purchase of ConocoPhillips Nigerian assets, Oando completed the acquisition of 100 per cent of Eni’s interest in NAOC, the operating company of the JV, further increasing its stake in the JV from 20 per cent to 40 per cent, securing operatorship of the JV and doubling its 2P reserves to 996.2 mmboe.

This acquisition also resulted in the expansion of the company’s exploratory asset base portfolio.

Today, the company’s strategic focus lies on expanding its dollar earning portfolio and positioning itself for the energy transition through the development of its renewable energy business.

This significant milestone of the successful acquisition of Eni’s Nigerian subsidiary, NAOC for $783 million, achieved in a signing ceremony in London,  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.

“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.

The Accusations

In August, former Vice President of Nigeria, Atiku Abubakar, alleged that President Tinubu as well as his nephew Wale, had underhand dealings in the national oil company’s acquisition of OVH.

Alleging “The criminal hijack of the NNPC by corporate cabals around the current president”, he stressed that the retention of Mr. Mele Kyari as the Group Chief Executive Officer of NNPC was a compensation for the alleged acquisition of NNPC Retail Ltd by OVH in which he claimed Mr Wale Tinubu held 49 per cent stake.

He further alleged that the NNPC Retail and OVH acquisition deal was part of a grand scheme by Tinubu to integrate his personal business interests into Nigeria’s public enterprises at the federal level.

Separately, the 2023 Peoples Democratic Party (PDP) presidential candidate,  challenged the government to clarify how Oando Plc allegedly received accelerated approval to acquire the onshore assets of NAOC.

Of course, it wasn’t the first time such statements were made by politicians. In one ludicrous case under the President Olusegun Obasanjo administration, former Governor of Abia State, Orji Uzor Kalu, in an attempt to spite the then Nigerian leader alleged that Obasanjo owned Oando.

In fact, he had gone ahead to say that the ‘O’ and ‘O’ in Oando actually represented Olusegun Obasanjo, the first two initials of the former president’s name.

Was Oando’s Acquisition Given on a Platter?

Those who should know better, especially government agencies have come out to explain why other divestment deals slowed down and why the Oando transaction appeared to have been faster compared to those ones.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in an explanatory note, said the approval of the divestment deal between Oando and NAOC followed due process and was done in compliance with existing regulations.

“The commission wishes the public to be aware that the approvals given to the NAOC-Oando and Equinor – Chappal divestments were in accordance with the Petroleum Industry Act (PIA) 2021, defined regulatory framework, and standard consent approval process set by the Commission under the PIA,” the NUPRC stated.

“Furthermore, the commission’s thorough evaluation and due diligence process, anchored on the seven pillars of the divestment framework, ensured that potential assignees were capable and compliant with legal requirements and that all legacy liabilities were identified and appropriately managed.

“The commission subsequently made recommendations to the Honourable Minister of Petroleum Resources based on comprehensive assessments which covered the timeline for review of application under the PIA and the commission’s regulatory process,” the upstream regulator pointed out.

It also have a blow-by-blow account of how the Oando deal was approved and what led to the delay of the Seplat-Mobil deal, which Atiku specifically mentioned.

To show that there was no bias against anyone, the upstream regulator stressed that the Equinor and Chappal Energies deal had been approved, even though none of the owners were related to the president.

Why Seplat-Mobil Deal is Slower

As for the divestment by Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Offshore Limited (Seplat), which Atiku said was being unduly delayed, the statement noted that it was undergoing the same consent approval process and is expected to be completed within the 120-day timeline provided by the Petroleum Industry Act (PIA).

On a comparative basis, it said that MPNU through a letter dated February 24, 2022, notified the commission of its intention to assign 100 per cent of its issued shares to Seplat Offshore Energy Limited.

It said the commission did not consent to this assignment because MPNU failed to obtain a waiver of pre-emption rights as well as the consent of NNPC, its partner on the blocks to the divestment.

“It is worth pointing out that NNPC’s right to pre-emption and consent under the NNPCL/MPNU Joint Venture Joint Operating Agreement was the subject of Suit No: FCT/HC/BW/173/2022 Nigerian National Petroleum Company Limited versus Mobil Producing Nigeria Unlimited, Mobil Development Nigeria Inc., Mobil Exploration Nigeria Inc. and NUPRC,” it added.

What about OVH?

Also, the NNPC sought to push back on allegations by Atiku that President Bola Tinubu as well as Wale Tinubu had underhand dealings in the national oil company’s acquisition of OVH.

NNPC in a statement, the NNPC said its investment decisions were strictly determined on the basis of commercial viability and national interest, rather than on the basis of politics.

“At the time NNPC  acquired OVH in 2022, Oando (in which Mr. Wale Tinubu has equity interest), had fully divested its equity in OVH to the two other partners – Vitol and Helios.

 “Oando actually began its divestment in 2016, with Vitol and Helios coming in as equity partners, leading to the change of name from Oando to OVH. In 2019, Oando fully divested its equity interest in OVH resulting in Vitol and Helios holding 50 per cent equity interests respectively,” the national oil company said.

Contrary to the “false alarm” raised, the NNPC stated that neither Wale Tinubu nor the president has any interest in the OVH acquisition.

It stressed that as a businessman, the former vice president should know that effectiveness in business leadership is best measured by balance sheets and bottom lines rather than pedestrian considerations.

The Man Wale Tinubu

Having started from the bottom, today Wale Tinubu is not a pushover in the oil business in Nigeria. From all available pointers, Bola Tinubu was not the president when Wale acquired those aforementioned assets spanning decades.

Wale started early school in Nigeria before proceeding to University of Liverpool, England for his tertiary studies where he earned a bachelor’s degree in law (LLB). Subsequently, he went to the London School of Economics where he bagged a master’s degree (LLM) specialising in International Business Law in 1989 and was called to the Nigerian Bar in 1990.

He began his career in 1990 as a legal practitioner and later achieved a track record as a serial energy entrepreneur with a proven reputation in building energy companies and institutions.

An astute business leader, and a visionary with a track record of having raised over $4 billion from international financiers for various growth, acquisitions, and development projects. He sits on the board of various companies.

In 1993, he co-founded Ocean & Oil Group leading its growth from an oil trading and shipping company to a fully diversified Oil & Gas Company. In 2000, Ocean & Oil acquired a controlling interest in Unipetrol PLC and two years later, he led the largest ever acquisition of a quoted Nigerian company, with Unipetrol PLC’s purchase of Agip Nig PLC, thereafter rebranded as Oando.

He is globally recognised for the successful transformation of Oando from a petroleum marketing company to sub-Saharan Africa’s foremost integrated energy group.

Under his leadership, Oando Marketing became the nation’s leading distributor of petroleum products with a network of over 130,000MT tank storage capacity and over 400 retail outlets.

He also pioneered the construction of a state-of the art mid-stream jetty designed to eliminate operational inefficiencies in petroleum product importation, resulting in millions of dollars cost savings for the industry.

 For Oando Gas and Power, he developed the nation’s foremost natural gas distribution company with circa 300km of gas pipelines delivering cleaner energy to over 150 commercial customers in Lagos, Calabar and Port-Harcourt.

 In 2014, he completed the $1.8 billion landmark acquisition of Conoco Phillips  Nigerian businesses, fortifying the company’s as one of the largest indigenous oil & gas companies in Nigeria.

Today, OER has interests in 15 licenses with extensive infrastructure across the Niger Delta & West Africa in addition to being a strategic national gas supplier as it is the 2nd largest gas supplier to the LNG and the domestic market as well as being a dominant power supplier to the nation via its Okpai Power Plant Phase 1 & 2.

A philanthropist and humanitarian, he led the drive to raise private sector awareness and funding for the humanitarian crisis in the NorthEast by hosting the 2018 launch of the Nigeria Humanitarian Fund Private Sector Initiative (NHF-PSI) as well as leading a private sector delegation to a first-ever collective tour of two internally displaced camps in Maiduguri, Borno State.

He was conferred with the National honour of Commander of the Order of the Niger (C.O.N) in October 2022, and is the recipient of numerous other national & international awards.

Additional Particulars of Oando-NAOC Deal

 On the Oando-NAOC deal, Oando’s Certified Professional Reserves Report (CPR) is from D&M, the second largest in the world. The company had also been auditing ENI/NAOC, Chevron, Shell  and all Majors for decades.

The CPR notes: “Gross Recoverable 2p reserves on original 20 per cent COP stake and new NAOC 20 per cent stake (Net Present Value) NPV 10 per cent is $2 billion respectively.”

This means that total value of the company is actually $4 billion before  deducting acquisition debt of the NEWCO, plus legacy debt.

“If you apply appropriate discounts + working capital, actual Net Asset Value (NAV) of company less all long term debt, equity value is actually minimum  $3 billion.

Because its dollar earnings and taking into account inflation differential between US 3 per cent and Nigeria 30 per cent, devaluation is 27 per cent this year.

“Year on Year at least 15 per cent in the best of times.  The Investment will be phenomenal in Naira terms. Oando has two power plants of 500MW  Kwale 1 and II and three large gas plants.

“There’s dedicated gas line to Eleme Petrochemicals. Main Supplier there. Dedicated gas pipe like to LNG. There are two main suppliers there after Shell. There are over 200 wells in production, nine flow stations and Oando has its own export terminal Brass and it’s the first indigenous company to elevate to the status of a Major IOC,” a source with knowledge of the deal told THISDAY.

Lokpobiri: Oando’s  Acquisitions Game-Changer

Minister of State Petroleum (Oil), Senator Heineken Lokpobiri has also been speaking on the implication of the deal.

He described the company’s acquisition of two International Oil Companies (IOCs) in Nigeria remained a game-changer for the oil industry in the country.

Speaking when the Managing Director of the company, Alex Irune and other members of the management team of the oil company visited him in his Abuja office, Lokpobiri stated that indigenous oil companies were capable of taking over from IOCs.

“If Oando as a very successful company goes to acquire assets in any other countries, it will become an IOC and that is my expectation and indeed the Minister of Petroleum Resources. We have grown enormous local capacity in companies like Oando, companies like Seplat, and a lot of other companies that are doing well locally.

“And our expectation is that you will sustain this momentum so that in the nearest future, we believe that you will be on the same level with the so-called IOCs that have been with us for the past 60-70 years,” he stated.