Nigerian energy company, Oando has officially confirmed its acquisition of Nigerian Agip Oil Company (NAOC), a subsidiary of the Italian energy conglomerate Eni, following the signing of the agreement.
Wale Tinubu, speaking on behalf of Oando, emphasized the crucial role that indigenous players will play in shaping the future of Nigeria’s upstream sector through this agreement.
Nairametrics learns that NAOC holds interests in four onshore blocks, two onshore exploration leases, and two power plants within Nigeria.
In addition to its Oil Mining Leases (OML) 60, 61, 62, and 63, NAOC also possesses a stake in the Okpai 1 and 2 power plants with a combined nameplate capacity of 960 megawatts, as well as two Onshore Exploration Leases (OPL) 282 and 135, for which it holds operational responsibility.
Notably, NAOC’s 5 per cent participating interest in the Shell Production Development Company (SPDC) Joint Venture is not part of this transaction and will remain within Eni’s portfolio.
What they said
Wale Tinubu, the Group Chief Executive of Oando PLC, expressed excitement about the agreement, highlighting the pivotal role that indigenous actors will play in shaping the future of Nigeria’s upstream sector.
He said,
- “The synergies created by this acquisition will unlock unparalleled opportunities for us to re-align expectations, enhance efficiency, optimize resource allocation, and significantly increase production.
- “Furthermore, it is in alignment with our strategy of acquiring, enhancing, appraising, and efficiently developing reserves.
- “Today’s announcement is not just an important milestone for the future of Oando; it brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector,” he stated.
According to Tinubu, having achieved a significant milestone, Oando was looking forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for local communities, stakeholders, and shareholders.
- “Like the other assets in contention, it was learned that the current deal will have to be approved by the Nigerian Upstream Petroleum Regulatory Commission (NURPC).
- “It is also expected that the Nigerian National Petroleum Company Limited (NNPC), if interested in the deal, will have the right of first refusal of the oil, gas, and power assets as per the Joint Operating Agreements (JOA)”.
Wale Tinubu also added that upon the completion of the transaction with Oando PLC, Eni will uphold its presence in Nigeria through Nigerian Agip Exploration (NAE) and Agip Energy and Natural Resources (AENR), reaffirming the company’s dedication to the health and safety of its employees and the environment.
Eni will continue its operations in Nigeria, with a primary focus on offshore activities in which it operates. The company’s participation in assets operated by others, both onshore and offshore, as well as its involvement with Nigeria LNG, will remain part of Eni’s portfolio.
He further stated that the transaction aligns with Eni’s 2023-2026 plan, where upstream activities will complement the core strategy of organic growth through high-value inorganic activities.
It’s however important to note that the completion of this transaction is contingent upon obtaining all necessary approvals from local and regulatory authorities. This sale is anticipated to nearly double Oando’s reserves, bringing them to a total of 996 million barrels of oil equivalent.
Key highlights of the deal
This deal boasts several significant highlights for Oando, including a doubling of their current participating interests in OMLs 60, 61, 62, and 63, increasing from 20 per cent to 40 per cent.
Additionally, it solidifies Oando’s ownership stake in all NEPL/NAOC/OOL JV assets and associated infrastructure, which comprise an impressive array of assets which are: 40 discovered oil and gas fields, of which 24 are actively producing, 40 identified prospects and leads, a network of 12 production stations, approximately 1,490 kilometres of pipelines, 3 gas processing plants, the Brass River oil terminal, the Kwale-Okpai phases 1 & 2 power plants, along with their supporting infrastructure.
Notably, Oando’s total reserves, as estimated in 2021, stood at 503.3 million barrels of oil equivalent (MMboe). This transaction is poised to deliver a remarkable 98 per cent boost to their reserves.
Furthermore, this agreement significantly expands Oando’s exploration asset portfolio by securing a 90 per cent interest in OPL 282 and a 48 per cent interest in OPL 135.
However, specific financial terms of the deal were not disclosed so it’s important to note that this agreement is still pending regulatory approval.
