The Group Chief Executive of Oando Group, Jubril Adewale Tinubu, credited the acquisition of a 100 percent shareholding in Nigerian Agip Oil Company (NAOC) from the Italian energy company, Eni, to perseverance and determination.
Commenting on the acquisition, Tinubu remarked, “Today’s announcement represents the culmination of a decade of dedication, resilience, and a steadfast belief in our goals.
This victory is not just for Oando but for every indigenous energy player, marking a significant step towards taking control of our destiny.
“This marks a new era for Nigeria’s energy sector, and we are confident that local companies will be central to the nation’s upstream evolution.
As we take on the role of operator, our immediate focus will be on maximizing the potential of these assets in line with our strategic objectives while supporting the country’s efforts to increase production.
“Looking ahead, we will continue to pursue strategic opportunities that promote growth and value creation for our stakeholders, particularly in the areas of clean energy, agri-feedstock, infrastructure, and mining.”
Industry analysts have praised the acquisition of NAOC, predicting it will significantly reshape Nigeria’s oil and gas sector.
The deal, which had been eagerly anticipated since news of discussions emerged in September 2023, quickly became a hot topic in Africa’s oil and gas community.
Even before the ink was dry on the acquisition documents, the transaction generated widespread attention. Industry experts have been quick to commend the deal, which they believe will have a lasting impact on the sector.
Prominent oil and gas analyst, Ms. Taiwo Alegeh, noted that the acquisition would double Oando’s oil equivalent output from 25,000 barrels per day to 50,000 barrels per day. Alegeh also praised Tinubu’s leadership, highlighting his ability to identify new business opportunities and forge successful partnerships.
She emphasized that his visionary approach and business acumen have enabled him to navigate the complexities of the Nigerian market and collaborate with leading international companies, showcasing the potential within Nigeria’s business landscape.
Another analyst, Femi Ojo, lauded Tinubu as a world-class businessman, commending his visionary leadership and strategic acquisitions.
The acquisition was officially announced last Wednesday by Eni, which confirmed that it had received regulatory approval from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and obtained all other necessary local and regulatory authorizations.
Eni stated that the transaction allows it to complete the sale of NAOC Ltd, its subsidiary focused on onshore oil and gas exploration, production, and power generation in Nigeria, to Oando PLC, a leading national energy solutions provider listed on both the Nigerian and Johannesburg Stock Exchanges.
NAOC’s interest in the SPDC JV (Shell Production Development Company Joint Venture—operator Shell 30%, TotalEnergies 10%, NAOC 5%, NNPC 55%) was not included in the transaction and remains in Eni’s portfolio.
Eni reiterated its commitment to Nigeria through investments in deepwater projects and Nigeria LNG.
Eni also outlined plans for economic diversification in Nigeria, including assessing the potential for producing agri-feedstock for its bio-refineries and exploring various nature- and technology-based projects, such as clean cooking initiatives to offset emissions.
Eni has been active in Nigeria since 1962, engaging in hydrocarbon exploration, production, and power generation.
Currently, it has a significant portfolio of exploration and production assets with an equity production of approximately 40,000 barrels of oil equivalent per day, excluding NAOC’s contribution. Eni also holds a 10.4 percent interest in Nigeria LNG.
Oando Plc, in its announcement following the signing ceremony in London, described the acquisition as a pivotal moment for the Nigerian energy sector, heralding a new era for indigenous oil and gas companies.
Oando emphasized that, 68 years after oil was discovered in Oloibiri, the company is now positioned to lead and operate oil and gas assets previously dominated by International Oil Companies (IOCs), offering a brighter future for both the company and the industry.
Notably, this acquisition comes exactly a decade after Oando’s landmark $1.8 billion acquisition of ConocoPhillips’ Nigerian interests, a transaction that made Oando a Joint Venture (JV) partner on the asset alongside NNPC E&P Ltd (NEPL) and NAOC. The ConocoPhillips deal boosted Oando’s production from approximately 4,500 barrels of oil per day to 50,000 barrels per day at the time.
The transaction increases Oando’s participating interests in Oil Mining Licenses (OMLs) 60, 61, 62, and 63 from 20 percent to 40 percent, significantly enhancing its ownership stake in the JV assets and infrastructure, which include 40 discovered oil and gas fields, 24 of which are currently producing, along with approximately 40 identified prospects and leads.
The deal also encompasses 12 production stations, roughly 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai phases 1 & 2 power plants, with a combined capacity of 960MW, along with associated infrastructure.
Oando stated that the acquisition will significantly increase the company’s production reserves, which currently stand at 505.6MMboe, to 1.0bnboe.
Reports indicate that in the past decade, international oil companies operating in Nigeria have pursued divestment strategies, focusing on exiting shallow water and onshore assets while retaining interests in deepwater projects.
This trend reflects an exodus from mature African basins, driven by declining production and increasing operational risks, and a shift towards frontier areas like Namibia and Guyana, where there are opportunities for less carbon-intensive projects and less risky offshore developments.
However, Oando noted that Nigerian oil production has fallen below its capacity of over 2 million bpd of crude and condensate due to rampant oil theft and sabotage in the Niger Delta, coupled with underinvestment and sluggish exploration activity.
In May 2024, the country produced 1.47 million bpd, according to the Platts OPEC Survey from S&P Global Commodity Insights.
Dr. Ainojie Irune, Executive Director, Oando PLC & Chief Operating Officer, Oando Energy Resources, expressed confidence in the ability of indigenous companies to rejuvenate the sector, stating, “If you look at the local companies that have stepped forward…
there’s no doubt that indigenous capacity exists.”
Following the successful completion of Eni’s divestment to Oando, which has set a precedent in the industry, Oando anticipates further asset divestments as other indigenous players work to meet the regulatory, financial, and contractual conditions required for transaction completion.
These divestment deals are expected to bring fresh capital, technology, and expertise, which will help increase oil production, reduce carbon emissions, and create new opportunities for Nigerians in the industry.
Indigenous companies are believed to have a distinct advantage in terms of local knowledge, operational flexibility, and community relations. Coupled with global best practices, this advantage offers unparalleled opportunities to optimize value creation within the sector.
Irune further commented, “My personal opinion is that having indigenous players will definitely improve issues around fairness and the need to engage in sabotage and theft.
Collectively, independents can build a more cohesive and collaborative oil sector.”
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