Petroleum workers threaten showdown over Oando’s acquisition of Agip

Controversy has continued to trail last Monday’s announcement by the Oando group of its acquisition of the Nigerian Agip Oil Company (NAOC) Limited, a subsidiary of the Italian energy firm, ENI, as petroleum workers’ unions in the country have now threatened to embark on an industrial action if the sale is not reversed.

Oando Plc had, last Monday, announced an agreement with ENI over a 100 per cent acquisition of the Nigerian AGIP Oil Company Limited shares, in a statement.

“Nigeria’s leading indigenous energy solutions provider listed on both the Nigerian Exchange Limited and Johannesburg Stock Exchange is pleased to announce that it has reached an agreement with Eni (“ENI”) (an integrated energy company actively supporting a just energy transition, to achieve Net-Zero carbon emissions by 2050 and promote efficient and sustainable access to energy for all), for the acquisition of 100 per cent of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd).

“Completion of the transaction is subject to Ministerial Consent and other required regulatory approvals”, the statement contained.

Following the acquisition, Oando’s current participating interests in OMLs 60, 61, 62, and 63 has increased from 20 per cent to 40 per cent.

Also, it has increased 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, about 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.

However, the acquisition has also drawn the ire of petroleum workers’ unions, including the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) which have both threatened to begin withdrawal of their services from offices and oil locations.

According to a solidarity letter, Saturday, to the PENGASSAN Agip branch Chairman, signed by Shell branch Chairman, Ikechukwu Onyefuru, Chevron branch secretary, Pepple Soparaipirim, Total Energies branch secretary – Abubakar Ibrahim, NUPENG General secretary, Afolabi Otawale and Mobil branch Chairman, Aniete Udoh, the planned withdrawal of their services was in solidarity support of NAOC staff over the purported sale of Agip company to Oando Plc.

The unions noted that the threat was in protest over the sale of the Nigeria Agip Oil Company and Eni Nigeria to Oando Plc without due process being followed.

The threat is from oil and gas workers in the PENGASSAN branch in Mobil, Chevron, NUPENG, Total Energies and Shell companies.

According to the letter, they are ready and willing to take any step including withdrawal of services to drive home their demand and ensure the right thing is done.

“We write to express our absolute solidarity with all your members after reading with shock and consternation; the purported treacherous route chosen by your Management in dealing with our NAOC Comrades in the disposal of its equity in its JV assets to Oqndo Oil Ltd without recourse to outstanding financial obligations to workers.

“We share in the pains and emotional trauma which you are currently facing and humbly state that you should continue to stand very firm and resolute as you go through this phase of the struggle against this injustice meted to staff and contracted staff members of PENGASSAN.

“In line with the principles of fairness, equity, and social partnership, we believe that all the in-house unions in NAOC should be engaged by Management before, during and after the divestment to address the necessary employee welfare and benefits as will be reasonably demanded by the Unions.

“Furthermore, and to forestall any negative precedence in the industry, we plead that you continue to insist that issues of comprehensive and proper compensation, Pension and Redundancy be exhaustively addressed transparently to the satisfaction of the in-house unions and in full compliance with the provisions of the Pension Reform Act of 2014.

“The CBA must be treated with the sanctity it deserves at this moment. We hereby express full solidarity with our comrades and other affected Nigerian Staff of NAOC and wish to declare that we are willing to take any step including but not limited to service withdrawal to show our resolve on this subject,” the protest letter read.

Italian firm, Eni had agreed to sell its Nigerian wholly-owned subsidiary NAOC, to indigenous energy solutions provider Oando.

NAOC is focused on onshore oil and gas exploration and production in Nigeria. It is also engaged in power generation.

Oando said it has reached an agreement with Italian oil company Eni for the acquisition of 100% of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd).

Completion of the transaction is subject to Ministerial Consent and other required regulatory approvals, Oando said in a press release by company secretary Ayotola Jagun on Monday.

The statement was sent to the Nigerian Exchange Limited. Oando is also listed on the Johannesburg Stock Exchange

Based on 2021 reserves estimates, Oando’s total reserves stand at 503.3MMboe and the transaction will deliver a 98% increase.

The transaction also grows Oando’s exploration asset portfolio through the acquisition of a 90% interest in OPL 282 and 48% interest in OPL 135.

NAOC Ltd participating interest in SPDC JV (Shell Production Development Company Joint Venture – operator Shell 30%, TotalEnergies 10%, NAOC 5%, 2 NNPC 55%) is not included in the perimeter of the transaction and will be retained in Eni’s portfolio, Jagun said.

Commenting Wale Tinubu CON, Group Chief Executive, Oando PLC said: “The synergies created by this acquisition will unlock unparalleled opportunities for us to re-align expectations, enhance efficiency, optimize resource allocation, and significantly increase production.

“Furthermore, it is in alignment with our strategy of acquiring, enhancing, appraising, and efficiently developing reserves.

“Today’s announcement is not just an important milestone for the future of Oando; it brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector.

“Having achieved this significant milestone, we look forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for our local communities, stakeholders and shareholders,” he said.

However, the transaction is subject to ministerial consent and other regulatory approvals.

Following rising losses incurred from pipeline vandalism and oil theft in the country, more international oil companies including Shell and Exxon Mobil, are looking to divest their onshore assets.