African Export-Import Bank (Afreximbank) has arranged a senior US$500-million and a junior US$150-million reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited to finance Oando’s acquisition of the 20% participating interest held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria.
The African Press Organisation (APO) Group, reported that the joint venture, with significant oil and gas assets, including oil mining licenses (OMLs) 60, 61, 62 and 63, had 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.
Under the terms of the deal, Afreximbank, retained as mandated lead arranger for the transaction, also served as bookrunner, coordinator, underwriter, escrow agent, facility agent and security trustee, and also participated and underwrote US$350 million of the facility.
Other participants in the deal comprised Indorama Eleme Petrochemicals Limited, with US$150 million, and Mercuria Energy Group, with US$150 million.
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.
In addition, 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.
Leading the Oando participation at the closing ceremony held in London, United Kingdom on August 22, 2024, was the Group Chief Executive Officer, Mr. Adewale Tinubu, who was accompanied by representatives of ENI S.P.A. led by Guido Brusco, Group Chief Operating Officer and representatives from Mercuria Energy Group.
At the transaction ceremony, Afreximbank was represented by Head, Client Relations, Anglophone West Africa, Mr Peter Olowononi; and Manager Structured Trade & Commodity Finance, Mrs Ketiwe Lwando.
Commenting on the multi-million dollar deal, Afreximbank’s Executive Vice President, Global Trade Bank, Mr. Haytham Elmaayergi, described the facility as a critical step in advancing the bank’s strategy for promoting local content in Africa’s oil and gas sector.
He said: “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.”
The development banker further said that the transaction as a significant milestone in Nigeria’s upstream oil and gas sector, saying that it underscores 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 on the deal, Group Chief Executive of Oando, Mr. Wale Tinubu, said: “Today’s announcement is 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.
“We thank 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% stake”, Tinubu added.
