African Export-Import Bank, Afreximbank, has announced that it provided a $650 million lending facility to Oando Plc as part of the $783 million acquisition of Nigerian Agip Oil Company (NAOC).
The participation by Afreximbank represented 83 percent of the total $783 million spent by Oando Plc to successful complete the acquisition of the entire shareholding interest NAOC from the Italian energy company, Eni, comprising consideration for the asset and reimbursement.
Afreximbank who was retained as mandated lead arranger for the transaction, a significant milestone in Oando’s long-term strategy to expand its upstream, besides serving as bookrunner, coordinator, underwriter, escrow agent, facility agent and security trustee, and also participated and underwrote $350 million of the facility.
Other participants in the transaction were Indorama Eleme Petrochemicals Limited, with $150 million, and Mercuria Energy Group, with $150 million.
The joint venture, with significant oil and gas assets, including 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 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining.
Oando expects the acquisition to significantly enhance its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market. It also expects the transaction to drive local economic growth by creating jobs, improving infrastructure and fostering technological advancements in the oil and gas sector.
Wale Tinubu, Group Chief Executive of Oando Plc, led the company’s participation at the closing ceremony held in London, United Kingdom on August 22, 2024, companied by representatives of ENI S.P.A. led by Guido Brusco, Group Chief Operating Officer. Others were representatives from Mercuria Energy Group, while Afreximbank was represented by Peter Adeshola Olowononi, Head, Client Relations, Anglophone West Africa and Mrs Ketiwe Lwando, Manager Structured Trade & Commodity Finance.
Commenting on the transaction, Mr. Haytham Elmaayergi, Executive Vice President, Global Trade Bank, Afreximbank, said the facility marked a critical step in advancing the bank’s strategy for promoting local content in Africa’s oil and gas sector.
According to him, “By supporting the acquisition of key energy assets by an indigenous company like Oando, the Bank is fostering economic empowerment, enhancing regional trade, and contributing to the sustainable development of Africa’s natural resources.”
He described the transaction as a significant milestone in Nigeria’s upstream oil and gas sector, saying that it underscored the increasing role of local companies in the ownership and operation of critical energy assets, in line with Nigeria’s local content policy, energy security and economic sovereignty strategy.
Also speaking, Tinubu described the announcement as “the culmination of ten years of toil, resilience, and an unwavering belief in the realisation 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,” added.
Tinubu expressed appreciation to “Afreximbank for its unwavering leadership in bridging the trade finance gap in Africa and ensuring that Oando can consolidate its stake in the Joint Venture via the acquisition of NAOC 20 percent stake.”
The deal, Oando said in an August 22 statement to the Nigerian Exchange (NGX) by Ms. AyotolaJagun, Chief Compliance Officer and Company Secretary, raises its ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure, including 40 discovered oil and gas fields, of which 24 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 KwaleOkpai phases 1 & 2 power plants (with a total nameplate capacity of 960 megawatts), and associated infrastructure.