Oando Plc, a provider of integrated energy solutions led by Nigerian oil magnate Wale Tinubu, has finalized its $783 million acquisition of Nigerian Agip Oil Company (NAOC) with finance from the African Export-Import Bank.
Afreximbank provided Oando with a senior $500-million and junior $150-million reserve-based credit facility to enable the acquisition (press release, Aug. 23). The funds were also used to acquire a 20% participating interest in the NEPL/NAOC/Oando Joint Venture, which owns major oil and gas assets. This enterprise has previously produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas, with significant reserves remaining.
Afreximbank served as the transaction’s lead arranger, bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee, investing $350 million in the facility. Indorama Eleme Petrochemicals, owned by Indonesian businessman Sri Prakash Lohia, and Mercuria Energy Group, owned by Swiss businessman Daniel Jaeggi, both invested $150 million.
Haytham Elmaayergi, Executive Vice President of Afreximbank, highlighted the facility as an important step in the bank’s objective to encourage local content in Africa’s oil and gas sector. “This acquisition supports economic empowerment, enhances regional trade, and contributes to the sustainable development of Africa’s natural resources,” stated Mr. Trump.
Oando’s recent acquisition increased its stake in Oil Mining Leases (OMLs) 60, 61, 62, and 63 from 20% to 40%. Oando’s asset base was valued at $2.1 billion as of Dec. 31, 2023. This move will increase production capacity from 20,000 to 60,000 barrels of oil equivalent per day. The agreement also benefits Nigeria’s oil output and economic growth.
The acquisition comprises a significant part in the NEPL/NAOC/OOL Joint Venture, which includes 40 oil and gas fields (24 in production), 12 production stations, 1,490 kilometers of pipelines, three gas processing units, and the Brass River Oil Terminal. It also includes the Kwale-Okpai phases 1 and 2 power stations, which total 960 megawatts.
According to 2022 reserve estimations, Oando’s total reserves would expand by 98% with the addition of 493.6 million barrels of oil equivalent, totaling 1 billion barrels. The transaction is projected to be instantly cash-generating, greatly increasing Oando’s cash flow and supporting its long-term financial strategy.
