By Uche Usim
Oando PLC has successfully completed its acquisition of Eni’s Nigerian subsidiary, Nigerian Agip Oil Company (NAOC), in a landmark deal valued at $783 million. The agreement, finalised in a signing ceremony in London yesterday, represents a transformative moment for Nigeria’s energy sector and highlights the growing prominence of indigenous players in the industry.
The acquisition, first announced in September 2023, comes precisely a decade after Oando’s landmark $1.8 billion purchase of ConocoPhillips’ Nigerian assets. That previous transaction had significantly boosted Oando’s oil production from approximately 4,500 barrels per day to 50,000 barrels per day.
Wale Tinubu, Group Chief Executive of Oando PLC, commented on the deal: “Today’s announcement marks the culmination of a decade of determination, resilience, and vision. This achievement is not just a triumph for Oando but for every indigenous energy company as we redefine our role in the Nigerian energy sector. Our focus now shifts to maximising the potential of these assets while supporting the nation’s production goals and exploring new opportunities in clean energy, agriculture, infrastructure, and mining.”
The acquisition significantly expands Oando’s stake in various oil fields, increasing its participation interests in Oil Mining Leases (OMLs) 60, 61, 62, and 63 from 20% to 40%. The deal also enhances Oando’s ownership in Joint Venture assets, including forty oil and gas fields—twenty-four of which are producing—along with key infrastructure such as pipelines, gas processing plants, and power plants.
The strategic move is expected to boost Oando’s production reserves from 505.6 million barrels of oil equivalent (MMboe) to 1.0 billion barrels of oil equivalent (Bboe).
The transaction coincides with a broader trend of international oil companies (IOCs) divesting from shallow water and onshore assets in Nigeria, driven by declining production and operational risks. This shift towards less carbon-intensive and less risky offshore developments in regions like Namibia and Guyana contrasts with Nigeria’s current production challenges, including oil theft and infrastructure issues.
Dr. Ainojie Irune, Executive Director of Oando PLC and Chief Operating Officer of Oando Energy Resources, emphasized the role of indigenous companies in revitalizing the sector: *“Indigenous companies are well-positioned to rejuvenate the industry. Our local expertise and flexibility offer unique advantages, especially when combined with global best practices.”
The successful acquisition of NAOC sets a precedent and is expected to inspire further asset divestments by IOCs, opening up opportunities for other indigenous players. Seplat Energy, Chappal Energies, and Renaissance Consortium are among those making significant moves, with potential for increased capital, technology, and local employment.
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, views these developments as opportunities for local players:
“We encourage indigenous companies to leverage this period of transition to enhance local content and contribute to the sector’s growth and efficiency.”
As Eni exits its Nigerian subsidiary, NAOC, the future of Oando and the Nigerian oil sector appears promising.
The acquisition not only bolsters Oando’s position but also promises substantial economic benefits and increased local participation, reinforcing Oando’s role as a trailblazer in Nigeria’s oil and gas industry.