The Journey of Agip Oil by Oando , The Acquisition, The Completion ,Financing And Investors Concern.

Oando Plc is one of Nigeria’s largest indigenous energy companies, with operations spanning the entire energy value chain, including oil and gas exploration and production, refining, gas distribution, power generation, and renewable energy.
founded in 1956 as Esso Africa, a subsidiary of the American oil giant, Exxon Corporation. It became an independent Nigerian company after being acquired by the Nigerian government in the 1970s and was later privatised, with the current name “Oando” being adopted in 1991.
It is listed on both the Nigerian Stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE), making it the first African company to achieve a dual listing.

Exploration and Production: Oando is involved in the exploration, development, and production of oil and gas. The company holds interests in several oil mining leases (OMLs) in Nigeria, including producing and undeveloped fields.
Acquisitions:
Oando has expanded its upstream portfolio through strategic acquisitions, including the purchase of ConocoPhillips’ Nigerian oil and gas assets in 2014 and, more recently, the acquisition of the Nigerian Agip Oil Company (NAOC) from Eni in 2024. The NAOC acquisition significantly increased Oando’s stake in key oil and gas assets in Nigeria.
Gas and Power:
Oando operates a significant gas distribution network through its subsidiary, Axxela, which supplies natural gas to industrial and commercial customers. The company is also involved in power generation and is working on several power projects aimed at increasing Nigeria’s electricity supply.
Marketing and Distribution: Oando has a strong presence in the downstream sector, with operations that include the marketing and distribution of petroleum products such as gasoline, diesel, kerosene, and aviation fuel. The company operates a network of service stations across Nigeria and owns several storage and distribution facilities.
Lubricants:
The company also manufactures and sells a wide range of lubricants under the Oleum brand.
Drilling and Well Services: Oando provides a range of oilfield services, including drilling, well services, and rig operations through its subsidiary, Oando Energy Services.
Acquisition Strategy: Oando has pursued an aggressive acquisition strategy to expand its upstream assets and diversify its energy portfolio. The acquisition of NAOC in 2024 is a notable example, doubling Oando’s participating interest in several key oil mining leases and significantly increasing its oil and gas reserves.
Focus on Sustainability: Oando has made sustainability a key part of its business strategy, focusing on reducing its environmental footprint, promoting clean energy, and engaging in corporate social responsibility initiatives that benefit host communities. The company has expressed its commitment to transitioning to cleaner energy sources, including investments in renewable energy projects.
Operational Efficiency: Oando continues to focus on improving operational efficiency across its business segments. This includes optimizing production from its oil and gas fields, expanding its gas distribution network, and exploring opportunities in the renewable energy sector.

Corporate Social Responsibility

Oando is actively involved in corporate social responsibility (CSR) initiatives aimed at improving the quality of life in its host communities. These initiatives include:

Education: Oando supports educational programs by building and refurbishing schools, providing scholarships, and supplying educational materials to students in underserved communities.
Healthcare: The company has sponsored healthcare initiatives, including medical outreaches, health awareness campaigns, and the provision of medical facilities in rural areas.
Environmental Initiatives: Oando is committed to reducing its environmental impact through initiatives aimed at reducing gas flaring, promoting energy efficiency, and protecting biodiversity.

Leadership

Group Chief Executive: Wale Tinubu has been the Group Chief Executive of Oando Plc since 2001. He has been instrumental in transforming Oando into one of Africa’s leading energy companies, overseeing its expansion and strategic acquisitions.

Outlook

Looking ahead, Oando’s focus will be on maximizing the value of its recently acquired assets, expanding its energy portfolio, and exploring new opportunities in clean energy. The company is expected to play a significant role in Nigeria’s oil and gas sector as the industry transitions towards greater indigenous participation and sustainability.

In conclusion, Oando Plc is a major player in Nigeria’s energy sector with a diverse portfolio that spans the entire energy value chain. The company’s strategic acquisitions and focus on operational efficiency and sustainability position it well for future growth and value creation.

History of Agip oil
Agip Oil, officially known as the Nigerian Agip Oil Company (NAOC), is a major player in Nigeria’s oil and gas industry. It is a subsidiary of Eni, an Italian multinational oil and gas company. Below is an overview of NAOC and its operations:
Nigerian Agip Oil Company was established in 1962, making it one of the oldest oil companies operating in Nigeria.
NAOC is a subsidiary of Eni, which is one of the largest energy companies in the world. Eni operates in over 60 countries and is involved in oil and gas exploration, production, refining, and marketing.

Exploration and Production:
NAOC is primarily involved in the exploration, development, and production of oil and natural gas in Nigeria. The company operates several oil fields in the Niger Delta region, one of the most prolific oil-producing areas in the world.
Joint Ventures:
NAOC operates through joint ventures, the most significant being the NAOC/NEPL/Oando Joint Venture. The other partners in this venture are the Nigerian Petroleum Development Company (NEPL), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), and Oando Plc, a leading Nigerian energy company. NAOC is the operator of this joint venture, which is responsible for managing the exploration, production, and development activities.
Key Assets:
Oil Mining Leases (OMLs): NAOC holds interests in several oil mining leases (OMLs) in Nigeria, including OMLs 60, 61, 62, and 63. These assets are rich in both oil and natural gas.
Production Facilities: NAOC operates multiple oil and gas production facilities, including production stations, flow stations, and pipelines. The company is also involved in the operation of the Brass River Oil Terminal, a significant export facility.

NAOC is also a significant producer of natural gas, contributing to Nigeria’s domestic supply and export via liquefied natural gas (LNG). The company operates gas processing plants and is involved in the development of gas fields, particularly in the Niger Delta.

Environmental Initiatives:
NAOC, under the guidance of its parent company Eni, has implemented various initiatives aimed at reducing the environmental impact of its operations. This includes efforts to minimize gas flaring, improve energy efficiency, and promote biodiversity in the regions where it operates.
Community Relations:
NAOC has a long-standing presence in the Niger Delta, a region that has experienced significant environmental and social challenges due to oil exploration. The company engages in several community development projects, including the provision of social infrastructure, education, healthcare, and employment opportunities for the local population. It also supports agricultural projects and small-scale enterprises.
Acquisition by Oando:
In 2024, Oando Plc acquired a 100% stake in NAOC from Eni for $783 million. This acquisition significantly increased Oando’s stake in the NAOC/NEPL/Oando Joint Venture from 20% to 40%, effectively doubling its share in key oil and gas assets in Nigeria. The acquisition also included significant infrastructure, such as oil and gas fields, pipelines, production stations, and the Brass River Oil Terminal.
Impact of Acquisition:
The acquisition by Oando is expected to have a substantial impact on the Nigerian oil and gas sector. It marks a shift towards greater indigenous participation in the industry, as Oando is a Nigerian-owned company. The deal is also expected to strengthen Oando’s operational capacity and expand its influence in Nigeria’s upstream oil and gas industry.

Future Outlook

Following its acquisition by Oando, NAOC’s future operations will likely be shaped by the strategic direction of its new owner. Oando has indicated that it plans to maximize the potential of the acquired assets, increase production, and ensure sustainable practices. This could mean more investment in technology, infrastructure, and community engagement in the coming years.
In conclusion, NAOC has been a significant player in Nigeria’s oil and gas industry for decades, contributing to both the country’s economy and its energy sector. With its recent acquisition by Oando, the company is poised to continue playing a crucial role in Nigeria’s oil and gas landscape, with a focus on expanding production and ensuring sustainable development.
Journey of Acquisition
Oando Plc has acquired a 100% stake in the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni for $783 million.
In a corporate announcement filed with the Nigeria Exchange Limited on Thursday, Oando stated that this acquisition aligns with its strategy to enhance its upstream operations within Nigeria’s oil and gas industry.

As a result of the transaction, Oando’s participating interest in key oil mining leases—specifically OMLs 60, 61, 62, and 63—has increased from 20% to 40%, effectively doubling its stake in the NEPL/NAOC/OOL Joint Venture.

“We are pleased to announce the successful completion of the acquisition of 100% of the shareholding interest in the Nigerian Agip Oil Company from the Italian energy company, Eni, for a total consideration of $783 million, which includes consideration for the asset and reimbursement,” Oando stated.

The newly acquired assets include 40 oil and gas fields, 24 of which are currently in production. Additionally, the deal encompasses 1,490 kilometres of pipelines, 12 production stations, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai power plants, which have a combined capacity of 960MW.

Following the acquisition, Oando’s total reserves have surged by 98%, increasing from 505.6 million barrels of oil equivalent to one billion barrels of oil equivalent, based on 2022 estimates.

The deal is expected to be immediately cash-generative, providing a significant boost to the company’s revenue and cash flow. “Based on 2022 reserves estimates, Oando’s total reserves stand at 505.6 MMboe, and the transaction will deliver a 98% increase of 493.6 MMboe, bringing the total reserves to 1.0 Bnboe,” Oando added.

Wale Tinubu, Oando’s Group Chief Executive, described the acquisition as the culmination of a decade-long journey that began with the company’s 2014 entry into the Joint Venture through its acquisition of ConocoPhillips’ Nigerian assets.

“This is a major win for Oando and the entire indigenous energy sector. With full control of these assets, we are in a stronger position to drive Nigeria’s upstream growth while ensuring sustainable practices in our host communities,” Tinubu said.

He added that Oando’s immediate focus would be on maximising the potential of the newly acquired assets, increasing production, and maintaining a balance between operational efficiency and environmental responsibility.

Last month, the Nigerian Upstream Petroleum Regulatory Commission approved the sale of Nigerian Agip Oil Company from Eni to Oando.
Completion on the Acquisition
Oando PLC, a leading Nigerian energy solutions provider, has completed the acquisition of Eni’s Nigerian subsidiary, Nigerian Agip Oil Company (NAOC), in a landmark $783 million deal. The acquisition, finalized during a ceremony in London, represents a significant moment for Nigeria’s energy sector, marking the increasing dominance of indigenous companies in an industry once controlled by international oil giants.

This deal comes a decade after Oando’s $1.8 billion acquisition of ConocoPhillips’ Nigerian interests, a transaction that boosted Oando’s production capacity from 4,500 barrels of oil per day to 50,000 barrels. The acquisition of NAOC expands Oando’s interests in oil mining leases (OMLs) 60, 61, 62, and 63 from 20% to 40%, and increases its ownership of joint venture assets and infrastructure, which includes forty discovered oil and gas fields, twelve production stations, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai power plants, among others.

Wale Tinubu, Group Chief Executive of Oando, described the acquisition as the culmination of ten years of hard work, underscoring its significance not only for Oando but for the entire Nigerian energy sector. He expressed confidence in the ability of indigenous companies to play a pivotal role in Nigeria’s upstream oil industry, and highlighted Oando’s strategic focus on optimizing the newly acquired assets while contributing to the nation’s production targets.

The transaction will more than double Oando’s production reserves, boosting them from 505.6 million barrels of oil equivalent (MMboe) to 1 billion barrels of oil equivalent (Bnboe). The deal also aligns with the broader trend of international oil companies (IOCs) divesting from shallow water and onshore assets in Nigeria, as they shift focus to less risky, offshore developments in other regions like Namibia and Guyana. This exodus of IOCs presents opportunities for local companies, which possess the operational flexibility and community relations needed to revitalize Nigeria’s oil sector.

Oando’s acquisition is expected to generate immediate cash flow, benefiting both the company and the Nigerian economy. Industry analysts are optimistic about the deal’s potential to increase oil production, reduce carbon emissions, and create new opportunities within the sector.

Despite the divestment, Eni retains its 5% stake in the Shell Production Development Company Joint Venture (SPDC JV), which was not part of the Oando transaction. This underscores the continuing involvement of IOCs in specific segments of Nigeria’s oil and gas industry, even as they offload other assets.
Financing the Acquisition

The African Export-Import Bank (Afreximbank) has facilitated a $650 million financing package to support Oando’s acquisition of a 100% stake in Nigerian Agip Oil Company Ltd (NOAC). In a statement released on Friday, the bank announced that it had successfully arranged a $500 million senior lending facility and a $150 million junior reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited.

The funds were used by Oando to purchase the 20% interest held by NOAC in the NEPL/NAOC/Oando Joint Venture in Nigeria. Oando, in a statement on Thursday, celebrated the completion of the acquisition, marking it as a significant milestone in the company’s history. The signing ceremony, held in London, underscored Oando’s position as a leading indigenous energy solutions provider in Nigeria, aligning with the company’s commitment to advancing the nation’s energy transition and expanding its portfolio.

Haytham Elmaayergi, Executive Vice President of Global Trade Bank at Afreximbank, highlighted the importance of the bank’s role in the transaction. He stated that the facility is a crucial step in the bank’s strategy to promote local content within Africa’s oil and gas sector. By enabling an indigenous company like Oando to acquire key energy assets, Afreximbank is contributing to economic empowerment, regional trade enhancement, and the sustainable development of Africa’s natural resources.

The transaction is a significant milestone for Nigeria’s upstream oil and gas sector, demonstrating the increasing influence of local companies in managing and operating essential energy assets. This aligns with Nigeria’s local content policy, energy security, and economic sovereignty goals. The joint venture, which includes oil mining licenses 60, 61, 62, and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with an estimated 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas still remaining.

Afreximbank served as the mandated lead arranger for the transaction, taking on multiple roles including bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee. The bank also directly participated in and underwrote $350 million of the total facility. Other participants in the transaction included Indorama Eleme Petrochemicals Limited and Mercuria Energy Group, each contributing $150 million.

Wale Tinubu, Group Chief Executive of Oando, expressed his gratitude towards Afreximbank for its leadership and support. He described the deal as the culmination of a decade of effort and determination, following Oando’s initial entry into the joint venture in 2014 through the acquisition of ConocoPhillips’ Nigerian portfolio. Tinubu emphasized that this acquisition is a victory for Oando and all indigenous energy players, as it enables them to take greater control of their destiny and play a pivotal role in the future of Nigeria’s upstream sector.

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Investor Considerations

For investors, Oando’s stock may appear undervalued based on certain metrics, but the company’s financial health remains fragile. The lack of dividends, significant retained losses, negative shareholders’ funds, and high debt levels are major concerns. While the recent profitability and strategic acquisitions could indicate a turning point, investors need to be cautious.

The stock may offer potential upside for those with a high-risk tolerance who believe in the company’s turnaround strategy, but it also comes with significant risks, particularly if the company fails to sustain its recent improvements.