The Group Chief Executive, Oando Group, Jubril Adewale Tinubu, has attributed the acquisition of 100 per cent of the shareholding interest in the Nigerian Agip Oil Company (NAOC) from the Italian energy company, Eni, to hard work and resilience.
Recall that Atiku Abubakar, who was the presidential candidate for the Peoples Democratic Party in 2023, had earlier raised concerns about what he perceived as expedited approvals granted to Oando, a company linked to a relative of President Bola Tinubu, to acquire onshore assets from AGIP and ENI.
Atiku challenged the All Progressives Congress-led Federal Government to clarify the process, suggesting it may have been influenced by political connections.
Speaking on the acquisition, Tinubu said: “Today’s announcement is the culmination of 10 years of hard work, resilience, and an unwavering belief that we would realise our ambition. It is a win, not just for Oando, but for every indigenous energy player as we take our destiny in our hands.
“This is a new dawn for the Nigerian energy sector, and we are confident that indigenous companies will play a pivotal role in this next phase of the nation’s upstream evolution. With our assumption of the role of operator, our immediate focus is on optimising the assets’ immense potential in contributing to our strategic objectives, whilst complementing the nation’s plan to boost production outputs.
“Looking to the future, we will continue to pursue strategic opportunities that provide enhanced growth and value creation for our stakeholders, particularly in the clean energy, agri-feedstock sector, as well as infrastructure and mining.”
Expectedly, analysts in the oil and gas sector have joined their voices in commendation of the latest addition of NAOC to Oando’s growing business. The analysts also predicted that the acquisition will significantly reshape Nigeria’s oil and gas industry.
For long, stakeholders in the oil and gas industry waited with eagerness for the deal to be finalised. Beginning from September 2023, when news filtered into the public space that the deal was being discussed, it became a daily topic of discussion among the who-is-who in the oil and gas industry across Africa.
It was, therefore, not surprising that even before the ink was yet to dry on the documents confirming the acquisition, it has generated so much attention in Nigeria and beyond. The acquisition of NAOC by OANDO has deservedly attracted comments from analysts in the industry.
Speaking on the significance of the acquisition, a foremost oil and gas analyst, Ms Taiwo Alegeh, said “this landmark acquisition will double Oando’s oil equivalent output from 25,000 barrels per day to 50,000 barrels per day.”
Ms. Alegeh commended the leadership style of Adewale Tinubu and highlighted his ability to identify new business opportunities and create successful partnerships.
“His visionary mindset and astute business acumen have allowed him to navigate the complexities of the Nigerian market and foster collaborations with leading international companies. This not only speaks to his own success but also showcases the immense potential within Nigeria’s business landscape,” Alegeh said.
Another analyst, Femi Ojo, emphasized Tinubu’s status as a world-class businessman, lauding his visionary leadership and strategic acquisitions.
The final acquisition was announced last Wednesday by the Italian oil and gas giant Eni, which confirmed receiving regulatory approval from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The Italian company also stated that it had obtained all other relevant local and regulatory authorizations.
“Having secured all necessary local and regulatory approvals, this achievement will allow Eni to complete the transaction for the sale of Nigerian Agip Oil Company Ltd (NAOC), its wholly-owned subsidiary focused on onshore oil and gas exploration and production, as well as power generation in Nigeria, to Oando PLC, Nigeria’s leading national energy solutions provider, listed on both the Nigerian and Johannesburg Stock Exchanges.
“NAOC Ltd’s participating interest in the SPDC JV (Shell Production Development Company Joint Venture – operator Shell 30%, TotalEnergies 10%, NAOC 5%, NNPC 55%) is not included in the transaction and will remain in Eni’s portfolio. Eni remains committed to the country through investments in deepwater projects and Nigeria LNG,” the company stated.
Eni also announced plans for economic diversification in Nigeria, including assessing the potential for producing agri-feedstock for Enilive bio-refineries and various nature- and technology-based projects, such as clean cooking initiatives to offset emissions.
Eni has been operating in Nigeria since 1962, actively engaging in hydrocarbon exploration and production, as well as power generation. Currently, Eni has a substantial portfolio of exploration and production assets, with an equity production of approximately 40,000 barrels of oil equivalent per day, excluding the NAOC contribution. Eni also holds a 10.4 percent interest in Nigeria LNG.
NAOC focuses on onshore oil and gas exploration and production, as well as power generation, Eni added in the statement.
Oando Plc, while announcing its successful acquisition of NAOC soon after the signing ceremony in London, said it marked a new era for the Nigerian energy sector, and described it as a watershed moment for indigenous oil and gas players.
Oando stated that 68 years after the discovery of oil in Oloibiri, it is now poised to lead and operate oil and gas assets previously dominated by International Oil Companies (IOCs) in Nigeria, adding that it offers a brighter future for the company and industry alike.
”It is rather uncanny that this acquisition comes exactly a decade after Oando’s landmark $1.8 billion acquisition of ConocoPhillips’ Nigeria interest, a transaction which incidentally made the company a Joint Venture (JV) partner on the asset alongside NNPC E&P Ltd (NEPL) and NAOC.
“The ConocoPhillips transaction propelled Oando’s production from approximately 4,500 barrels of oil per day to 50,000 barrels of oil per day at the time,” the firm added.
The transaction, according to Oando, increases its current participating interests in Oil Mining Licenses (OMLs) 60, 61, 62, and 63 from 20 per cent to 40 per cent and increases its ownership stake in the Joint Venture (JV) assets and infrastructure which include 40 discovered oil and gas fields, of which 24 are currently producing as well as approximately 40 identified prospects and leads.
It stated that the deal also involves 12 production stations, approximately 1,490km of pipelines, three gas processing plants, the Brass River Oil Terminal and the Kwale-Okpai phases 1 & 2 power plants, with a total nameplate capacity of 960MW, and associated infrastructure.
Furthermore, Oando said that it will significantly boost the company’s production reserves which currently stand at 505.6MMboe to 1.0bnboe.
Reports show that in the last decade, international oil companies operating in Nigeria have pursued divestment strategies, focusing on exiting shallow water and onshore assets while maintaining interests in the deep waters.
The trend, according to experts, indicates an IOC exodus from mature African basins, driven by factors such as declining production and increasing operational risks.
This is leading to a shift towards frontiers like Namibia and Guyana, where there are opportunities for less carbon-intensive projects and less risky offshore developments.
However, Oando said that Nigerian oil production had fallen well below its capacity of over 2 million bpd of crude and condensate due to rampant oil theft and sabotage in the restive Niger Delta, as well as under investment and sluggish exploration activity.
The country produced 1.47 million bpd in May 2024, according to the Platts OPEC Survey from S&P Global Commodity Insights.
Similarly, speaking in an interview with S&P Global Commodity Insights, Dr Ainojie Irune, Executive Director, Oando PLC & Chief Operating Officer, Oando Energy Resources, said that indigenous companies were well placed to rejuvenate the sector.
He said: “If you look at the local companies that have stepped forward… there’s no doubt that indigenous capacity exists.”
Given the successful completion of Eni’s divestment to Oando, which has set an industry precedent, Oando said it anticipates further asset divestment as other indigenous players intensify efforts to fulfill the requisite regulatory, financial and contractual conditions for transaction completion.
These divestment deals are expected to bring in fresh capital, technology, and expertise, which will help to increase oil production, reduce carbon emissions, and create new opportunities for Nigerians in the industry.
Indigenous companies are also believed to possess a distinct advantage in terms of local knowledge, operational flexibility, and community relations. When coupled with global best practices, this advantage offers unparalleled opportunities to optimise value creation within the sector.
Speaking on indigenous participation, Irune added: “My personal opinion is that having indigenous players will definitely improve issues around fairness and this need to engage in sabotage and theft. Collectively, independents can build a more cohesive and collaborative oil sector.”