An indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchanges, Oando Plc, plans to increase its crude oil production capacity to 100,000 barrels per day over the next five years after completing the acquisition of ConocoPhillips’ (COP) Nigerian assets for $1.65 billion in July.
This is coming as Seven Energy International Limited, an indigenous integrated oil and gas development, production and distribution company with interests in Nigeria, and the Nigerian Sovereign Investment Authority (NSIA), better known as the Sovereign Wealth Fund (SWF) on Tuesday announced a $100 million investment deal.
The Chief Executive Officer of Oando Plc, Mr. Wale Tinubu, said in a statement on Tuesday that his company’s production capacity was currently 42,500 bpd and that the company would grow through future acquisitions as it seeks to increase market share in Nigeria.
Oando had completed the acquisition of ConocoPhillips’ Nigerian assets with the receipt of the approval of the Minister of Petroleum Resources, Mrs. Diezani Alison Madueke, last July.
With the completion of the $1.65 billion transaction, the company would be producing up to 50,000 barrels of oil equivalent per day from six producing fields.
The deal would also significantly impact the company’s near immediate upstream strategy and operations, and optimise its value across the energy chain.
In December 2012, Oando, through its Exploration and Production subsidiary Oando Energy Resources (OER), entered into an agreement with COP to acquire its Nigerian businesses.
Though Oando successfully raised the funds required to complete its acquisition of the assets, the closure of the acquisition was subject to meeting certain conditions, including government and regulatory approval, and the consent of the Minister of Petroleum Resources.
A ministerial consent is the mandatory final approval for all oil and gas acquisitions in the country as stipulated under the Petroleum Act of 1969.
With the receipt of the approval, Tinubu said the acquisition satisfied the company’s criteria for assets in production, as well as excellent appraisal and exploration prospects.
Under the investment deal between NSIA and Seven Energy, NSIA through its Gas-to-Power funds managed on behalf of the Debt Management Office (DMO), signed a commitment letter for an investment of at least $100 million in aggregate principal amount of senior secured notes due in 2023 to be issued and privately placed by Seven Energy Finance Limited.
Commenting on the agreement, the Managing Director and Chief Executive Officer of NSIA, Uche Orji, said through this investment and future projects, NSIA would be contributing to the transformation of the gas and power sectors.
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