Nigeria’s leading integrated energy solutions provider, Oando Plc, led by oil magnate Wale Tinubu, has signed a $755 million oil swap contract, demonstrating its growing influence in Nigeria’s energy sector and commitment to expanding domestically and internationally.
The contract, part of the Direct Sale and Direct Purchase (DSDP) plan, was awarded to six oil companies: Oando Plc, Gulf Transport and Trading, AA Rano Nigeria, PV Oil Singapore PTE Limited, Sahara Energy Resources, and Mercuria Mocoh SA.
Under the DSDP contracts, these businesses have been given the ability to meet a large amount of Nigeria’s gasoline needs, as well as some of its diesel and jet fuel usage. This measure is intended to strengthen Nigeria’s energy sector by maintaining a consistent supply of petroleum products.
Since 2016, the Nigerian National Petroleum Corporation (NNPC) has been buying gasoline through consortia of foreign and local trading enterprises, compensating them with crude oil under DSDP contracts due to budgetary limitations. However, the NNPC has switched to a cash payment system for imports, canceling the majority of DSDP contracts, as acknowledged by the group CEO of NNPC Ltd in June 2023.
Oando, a Nigerian global energy firm with activities in upstream, midstream, and downstream sectors, has made great progress under Tinubu’s leadership. Tinubu, who indirectly owns a large part in Oando through Ocean and Oil Development Partners (OODP), has been key in the company’s recent success.
The latest deal signed by Oando comes after its remarkable agreement with global energy giant Eni to acquire 100% of the shares of Nigerian Agip Oil Company, a move that is expected to considerably increase Oando’s interest in several oil mining leases (OMLs).
Furthermore, at the Intra-African Trade Fair (IATF) in Cairo, Oando signed a breakthrough $800-million agreement with the African Export-Import Bank (Afreximbank), suggesting a huge financial boost for the company.
This transaction, which includes senior secured reserve-based lending and receivables-backed term loan facilities, demonstrates Oando’s commitment to expanding its production capacity and strengthening its position in the African oil industry.
