Local investors will drive Nigerian upstream sector— Tinubu

The Group Chief Executive, Oando Plc, Wale Tinubu, says indigenous investors will play a vital role in the future of Nigeria’s upstream sector.

Tinubu, who made the assertion in a statement informing the Nigerian Exchange Limited (NGX) of Oando Plc planned acquisition of Nigerian Agip Oil Company Limited (NAOC Ltd) from ENI, said the deal shows the importance of local investors

He noted that the acquisition of Agip, which will increase Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure, will unlock unparalleled opportunities for Oando.

In the statement, Oando said its total reserves standing at 503.3MMboe as of 2021 estimates, will record a 98 per cent increase due to the deal to buyout ENI from the joint venture.

Recall that Oando had on Monday agreed to acquire 100 per cent of Nigerian Agip Oil Company Limited. The deal will increase Oando’s stake to 40 per cent.

The transaction also expands Oando’s exploration asset portfolio via the purchase of a 90 per cent stake in OPL 282 and a 48 per cent stake in OPL 135.

NAOC’s participating interest in Shell Production Development Company Joint Venture (operator Shell 30 per cent, TotalEnergies 10 percent, NAOC 5 per cent, NNPC 55 per cent) is not part of the deal and so will be retained in Eni’s portfolio, Oando said.

Presently, Oando and Agip have a 20 per cent stake each in the joint venture (NAOC JV) operated alongside the Nigerian National Petroleum Company (NNPC) E&P Limited, which has 60 per cent.

Upon the completion of the deal, still awaiting Ministerial Consent and regulatory approvals, Oando will hold 40 per cent of the JV operating four onshore blocks (OML 60, 61, 62, 63).

Oando will also have access to other enterprises Agip is involved in, “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,” Tinubu said.

The oil boss said the acquisition was “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.

“Having achieved this significant milestone, we look forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for our local communities, stakeholders and shareholders,” the statement quoted Tinubu.

Shares in Oando, which has a secondary listing in Johannesburg, jumped by 9 per cent in Lagos at 10:56 WAT following the news.

Last October, NNPC Limited acquired OVH Energy Marketing, owner and operator of Oando branded retail service stations, enabling the state oil firm to control Oando’s 380 filling stations across Nigeria.