It’s time we moved in, Wale Tinubu tells African oil producers
Sopuruchi Onwuka
Group Chief Executive of Oando Plc, Mr Wale Tinubu, has called on African governments to quickly initiate processes that would transfer the ownership and control of petroleum exploration and production to indigenous players, warning that the prevailing sentiments for energy transition is pulling both cash and resources out of the continent.
Mr Tinubu who delivered a keynote address in mergers and acquisitions in the African petroleum play noted that indigenous African independent companies like the Oando Plc have developed adequate capacity for effective valorisation of petroleum resources and domiciliation of its full economic impact in the continent.
Oando featured very prominently in the just concluded 2024 Africa Energy Week (AEW), actively transforming into an African brand with visible footprints outside Nigeria.
In delivering an momentous presentation on the prevailing status of the African petroleum industry at the event, Wale Tinubu called for transfer of all dormant petroleum assets in the continent to indigenous companies, arguing that the international oil companies that traditionally controlled operations were now in the mode of recovering their investments from Africa and refocusing from oil to new energy portfolios.
Wale pointed out that the foreign international oil companies are no longer leading investments in the African petroleum industry but has become very choosy with investments that align with home sentiments and prejudices against continued demand for fossil energy.
He counted that the traditional international oil companies that dominated the Nigerian petroleum industry are now changing their names and brands to signify alignment energy transition goals. He also noted that the foreign oil firms are switching their key preferences from oil assets to gas assets, a reversal from their initial positions that had deemphasized gas reserves.
The changing position of the international oil companies, according to Wale Tinubu, has partly led to prevailing divestments in which the IOCs have pulled significant $15 billion from African economies.
He stated that the foreign companies pulled over $10 billion from African economies in divestment programmes between 2010 and 2024. Oando, he stated, participated with significant $1.8 billion staked in acquisition of 20 percent stake earlier held by ConocoPhillips in the Enie operated joint venture with the Nigerian National Petroleum Company (NNPC) Limited onshore and shallow water Niger Delta.
Earlier in the year, he also noted, the Oando group further bought additional 20 percent stake and became a 40 percent operating interest holder in the new NNPC/Oando joint venture after the two international oil companies volunteered out.
He pointed at about $5.5 billion divestment deals either concluded or currently under transaction stages in the continent.
Wale listed current and potential divestment deals in Africa to include the $1.3 billion acquisition of Shell Petroleum Development Company’s (SPDC) 30% interest in the Shell operated JV by indigenous Renaissance consortium; the $860 million acquisition of TotalEnergies’ 10% stake in Shell operated JV by Chappal Energies; and the $1.2 billion acquisition of ExxonMobil’s 40% interest in the NNPCL/ExxonMobil JV by Seplat Energies.
Outside Nigeria, Walte pointed at the Assala Energy $628 million acquisition of Shell’s onshore assets in Gabon; Etu Energies $443 million acquisition of Galp Energia’s stake Offshore Angola; Savannah Energies $407 million acquisition of ExxonMobil’s Upstream and Midstream businesses in Chad and Cameroon; Panoro Energy’s $180 million acquisition for all of Tullow’s assets in Equatorial Guinea and the Dussafu asset in Gabon; and the Apex’s $45 million acquisition of 6 concessions from International Egyptian Oil Company.
The decades operating presence of the IOCs in Africa, Wale Tinubu stated, has failed to translate to significant development of the African economy, social infrastructure and facilities.
Even within the industry, he noted, “there is no continuous investment for steady growth of development in the continent.”
On the positive side, Wale said the divestments have ushered in a new era of opportunity that has positioned mergers and acquisitions as crucial driver for the transformation of Africa’s energy landscape.
The resulting opportunities, he argued, empower indigenous companies, foster local content and employment, increase investments in regional infrastructure, strengthen bilateral collaborations, diversify energy portfolios, and attract new strategic investors.
Wale Tinubu stated that the indigenous, having displayed enormous capacity in acquiring and operating assets from IOCs now position to transform and leading Africa’s oil and gas sector, diversify into gas and renewable energy, and also participate in global energy markets.
He called on African governments to disregard all pressure to give up on petroleum development, arguing that the continent still wallows in energy poverty, underdevelopment and economic crises.
He stated that petroleum remains the key resource to address energy supply deficits, poor economic and social development, industrialization, balance of payments, strengthening of local currencies and rebuilding of eternal reserves.
In presenting Oando as a credible and capable partner to African petroleum producers, Wale made it clear that “there is no place for negotiate it, we need to use what we have to develop our continent!”
