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

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

Oando Plc, one of Nigeria’s leading indigenous energy solutions providers, has successfully completed the acquisition of Eni’s Nigerian subsidiary, Nigerian Agip Oil Company (NAOC), for $783 million. The transaction, finalized during a signing ceremony in London, marks a significant milestone in the Nigerian energy sector, signaling a new era of dominance by indigenous oil and gas companies.

The acquisition, first announced in September 2023, is expected to transform Oando’s operations, increasing its current participating interests in Oil Mining Licences (OMLs) 60, 61, 62, and 63 from 20% to 40%.

This expansion includes ownership stakes in 40 discovered oil and gas fields, 24 of which are currently producing, as well as significant infrastructure including 12 production stations, approximately 1,490 kilometers of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai power plants with a combined capacity of 960 MW.

Wale Tinubu, Group Chief Executive of Oando Plc, hailed the acquisition as a pivotal moment for the company and the wider industry. “Today’s announcement is the culmination of 10 years of hard work, resilience, and an unwavering belief that we would realize our ambition. This is a win, not just for Oando, but for every indigenous energy player as we take our destiny into our own hands,” Tinubu said.

The acquisition is expected to significantly boost Oando’s production reserves, increasing them from 505.6 million barrels of oil equivalent (MMboe) to 1 billion barrels of oil equivalent (bnboe). This comes at a time when Nigeria’s oil production has been struggling, with output falling well below its capacity of over 2 million barrels per day (bpd) due to challenges such as oil theft, sabotage, underinvestment, and sluggish exploration activity.

In an interview with S&P Global Commodity Insights, Dr. Ainojie Irune, Executive Director and Chief Operating Officer of Oando Energy Resources, emphasized the importance of indigenous participation in rejuvenating the sector. “There’s no doubt that indigenous capacity exists,” he said, suggesting that local companies are well-positioned to address issues such as oil theft and operational risks.

The acquisition also reflects a broader trend of international oil companies (IOCs) divesting from Nigerian assets. In recent years, companies like ExxonMobil, Shell, and Equinor have sold off their onshore and shallow water interests, focusing instead on deepwater and other global projects.

These divestments are expected to bring fresh capital, technology, and expertise to the Nigerian oil industry, creating new opportunities for local companies.

Oando’s acquisition of NAOC follows its landmark $1.8 billion purchase of ConocoPhillips’ Nigerian assets in 2014, which significantly boosted the company’s production. This latest deal is expected to further solidify Oando’s position as a major player in the Nigerian energy sector, with a focus on optimizing the newly acquired assets and pursuing strategic growth opportunities in clean energy, agri-feedstock, infrastructure, and mining.

As the Nigerian oil and gas sector continues to evolve, the successful completion of this acquisition underscores the growing influence of indigenous companies in driving the industry’s future. Oando’s leadership anticipates that this transaction will serve as a catalyst for further asset divestments by IOCs and increased participation by local firms, ultimately contributing to a more robust and sustainable energy sector in Nigeria.