NAOC divestment: Eni pockets $783m, Oando grows massive
Sopuruchi Onwuka
Federal government has finally signed off on a major asset sale transaction in the upstream petroleum industry, allowing Eni walk home with princely $783 million while indigenous Oando masses up a range of petroleum reserves, power production plants, and a basket of industry facilities and infrastructure.
Italian oil multinational, Eni, announced Thursday that it has sold its equity stakes in petroleum assets operated by its local Nigeria Agip Oil Company (NAOC) Limited under a joint venture with the Nigerian National Petroleum Company (NNPC) Limited.
The interests divested by Eni are acquired by indigenous Oando Energy Resources (OER) which is the main unit of Oando Plc, instantly transforming it to one of the biggest independent oil companies operating in Africa.
Group Chief Executive of Oando Plc, Wale Tinubu
Both Eni and Oando issued separate statements on Thursday announcing completion of the deal which is perceived as the smoothest and fasted to run through the quagmire of processes run by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) which still fiddles with a number of other lingering divestment deals.
The deal entails that Eni sells assets of its wholly owned NAOC in onshore oil and gas exploration and production in Nigeria, as well as power generation assets, to Oando Plc.
The Italian firm declared that the transaction which received the approval of all relevant authorities falls in line with its strategy to focus on the rationalization of the upstream activities by rebalancing its portfolio and divesting non-strategic assets.
Eni clarifies that its non-operated interest in the Shell operated joint venture with NNPC Limited does not fall into the deal with Oando.
“The 5% participating interest in SPDC (Shell Production Development Company Joint Venture) is not included in the transaction, as it will be retained in Eni’s portfolio. Eni will continue to be present in the Country through investment in deepwater projects and Nigeria LNG, while also exploring new opportunities related to agri-feedstock sector,” the company stated.
Oando also fired off a statement beating its chest for “successful completion of the acquisition of 100% of the shareholding interest in the Nigerian Agip Oil Company (NAOC) from the Italian energy company, Eni.”
The home grown indigenous company pointed out that “This acquisition is a significant milestone in Oando’s long-term strategy to expand its upstream operations and strengthen its position in the Nigerian oil and gas sector.”
It explained that the deal took a total consideration of $783 million for the asset and reimbursement.
In the highlights of the transaction, Oando clarified that its current participating interests in OMLs 60, 61, 62, and 63 has risen from 20% to 40%.
“It increases Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure which include forty discovered oil and gas fields, of which twenty-four are currently producing, approximately forty identified prospects and leads, twelve production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the Kwale-Okpai phases 1 & 2 power plants (with a total nameplate capacity of 960MW), and associated infrastructure.
“Based on 2022 reserves estimates, Oando’s total reserves stand at 505.6MMboe and the transaction will deliver a 98% increase of 493.6MMboe, bringing the total reserves to 1.0Bboe;” the company explained, adding that the transaction is immediately cash generative and will contribute significantly to its cash flows.
Group Chief Executive, Oando Plc, Wale Tinubudeclared: “Today’s announcement is the culmination of ten years of toil, resilience, and an unwavering belief in the realization of our ambition since the 2014 entry into the Joint Venture via the acquisition of Conoco-Philips Nigerian Portfolio. It is a win for Oando, and every indigenous energy player, as we take our destiny in our hands, and 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 optimizing the assets’ immense potential, advancing production and contributing to our strategic objectives. This we will do while prioritizing responsible practices and sustainable development in ensuring a balanced approach to our host communities, and environmental stewardship as we complement the nation’s plan to boost production output.
“ Looking to the future, we will continue to pursue strategic diversification opportunities within the broader energy sector that provide enhanced growth and value creation for our stakeholders, particularly in clean energy, agri-feedstock sector, as well as energy infrastructure and mining.”
