By Adewale Sanyaolu
Nigeria’s quest to grow oil production to over two million barrels in the short to medium term is gaining traction with indigenous oil and gas firms projected to account for 60 to 70 per cent of production by 2026.
Oando Plc at the weekend announced that it was targeting a 100,000 barrel per day oil production by 2028.
Nigeria currently produces 1.3 million bpd, a figure that is said to be grossly inadequate compared to its potential to be a leader in oil and gas production in Africa.
Oando Executive Director, Mr.Alex Irune, stated this during a fireside chat to announce the company’s future expansion plans and role in Nigeria’s energy transition at the African Energy Week: Invest In Africa Energies Conference which ended in Cape Town, South Africa, at the weekend.
The oil production boost is coming on the heels of Oando’s acquisition of 100% stake in the Nigerian Agip Oil Company from Italian energy firm, Eni, in a deal valued at $783m.
Irune further hinted of the company’s plans to contribute to Nigeria’s oil production and its goal of exceeding two million bpd.
He also highlighted the growing role of indigenous firms in the sector, particularly as international oil companies (IOCs) divest from onshore and shallow water assets.
“In the space of 24 months, you’re going to see about 60-70 per cent of Nigeria’s production by indigenous players as a result of the transition of IOCs to the deep offshore and the acquisition of same by indigenous players. Whether it’s Seplat, our deal or the ongoing Renaissance deal,” said Irune.
According to him, Oando is focused on maximizing the development of assets acquired through its deal, which increased its stake in OMLs 60, 61, 62, and 63 to 40 per cent and nearly doubled its reserves to one billion barrels of oil equivalent.
He added that, the company’s ownership in NAOC’s joint venture assets will also grow, including 40 oil and gas fields, 12 production stations, and key infrastructure including pipelines, processing plants, and the Brass River Oil Terminal, saying Oando remains open to future mergers and acquisitions across the continent.
“We’re always looking to do a deal. We stay where we have a comparative advantage, but we don’t rule out any markets. Nigeria is the first place we look – we have an immense amount of potential. As a leading energy company, we owe it to the country to reach that potential”.
Irune also pointed out the role of Nigeria’s Petroleum Industry Act (PIA) in strengthening the investment case, particularly for gas in Nigeria and fostering industry synergies.
He maintained that, the Oando-NAOC deal was the first M&A transaction following the PIA’s implementation, stressing that Oando is leveraging the deal to boost oil and gas production intended to support Nigeria’s energy transition in the future.
“We are very serious about energy provision. When you frame the energy journey, there must be renewable energy in that basket. In the immediate term, our focus is on producing every drop of oil we can to be able to fund that transition journey. We will use gas as a transition fuel – our assets are largely gas assets as a company, and Nigeria is largely a gas province as a country.”