Financial Energy Review
……by Ben Ndubuwa…..
Oando, Nigeria’s leading indigenous energy group, has taken a significant step toward solidifying its position as a global oil and gas player by acquiring a refinery in Trinidad and Tobago. This strategic move not only underscores Oando’s commitment to expanding its international footprint but also highlights Africa’s growing influence in the global energy sector.
The refinery, a cornerstone of Trinidad and Tobago’s oil industry, has been operational for over a century. With a processing capacity of 175,000 barrels per day and a Nelson Complexity Index of 8.0, it is adept at refining regional crude oils to supply both domestic and regional markets with petroleum products. This acquisition positions Oando to meet the energy demands of the Caribbean and surrounding regions effectively.
This acquisition is a testament to Oando’s escalating presence on the global energy stage. By integrating such a significant asset into its portfolio, Oando is not only enhancing its operational capabilities but also reinforcing Africa’s expanding influence in international markets. The company’s involvement in the refinery is anticipated to strengthen ties between Africa and the Caribbean, fostering increased trade, investment, and knowledge-sharing within the energy sector.
Wale Tinubu, Group Chief Executive of Oando PLC, described the development as a major milestone for the company. “We are honored by the confidence the Trinidadian government has placed in us with this award. This strategic investment aligns with our long-term vision of expanding into high-potential regions and growing our operational footprint, leveraging our vast technical expertise and global partnerships to finance projects. We recognize the significance of this opportunity and look forward to working with all stakeholders to deliver maximum value for all parties involved,” he said.
Financial Performance and Strategic Investments
Oando’s recent financial performance reflects its strategic initiatives and robust growth trajectory:
- Revenue Growth: In the fiscal year ending December 31, 2024, Oando reported a 45% increase in revenue, reaching N4.1 trillion, up from N2.9 trillion in the previous year.
- Profit-After-Tax: The company achieved a 9% growth in Profit-After-Tax, totaling N65.5 billion, compared to N60.3 billion in the prior year.
- Production Capacity: There was a 46% increase in exit production, with figures rising from 21,036 barrels of oil equivalent per day (boepd) in 2023 to 30,712 boepd in 2024.
These impressive financial results are partly attributed to Oando’s strategic acquisition and integration of the Nigerian Agip Oil Company Limited (NAOC Ltd). This acquisition significantly enhanced Oando’s production capacity, achieving peak operated production of 103,206 boepd and net entitlements of 45,000 boepd.
Tinubu commented on this development, stating, “2024 was a year of transformation for Oando, the key highlight being our successful acquisition and subsequent integration of NAOC Ltd, which significantly enhanced our production capacity.”
In 2024, Oando invested $18.1 million in capital expenditures for the development of oil and gas assets, alongside exploration and evaluation activities. This strategic capital allocation aligns with the company’s cost optimization and efficiency goals.
Looking ahead to 2025, Tinubu outlined Oando’s priorities: “We aim to drive cost optimization, enhance operational efficiency, and leverage technology to boost productivity. Our focus will include aggressive drilling programs, rig-less initiatives, and workover operations to maximize production.”
Oando’s involvement in the Trinidad and Tobago refinery is expected to strengthen ties between Africa and the Caribbean. This collaboration is poised to foster increased trade, investment, and knowledge-sharing within the energy sector, benefiting both regions economically and technologically.
As part of the agreement, Oando will now enter into detailed discussions with the Trinidad and Tobago Government and regulatory authorities to finalize the lease agreement and establish an operational framework for the refinery. This phase will involve meticulous planning to ensure that the refinery’s operations align with both local and international standards, aiming for a seamless transition and optimized performance.
Oando PLC’s acquisition of the Trinidad and Tobago refinery marks a pivotal moment in the company’s history, reflecting its strategic vision and commitment to global expansion. With robust financial performance, strategic investments, and a clear focus on operational excellence, Oando is well-positioned to emerge as a formidable global oil and gas player, strengthening the bridge between Africa and the Caribbean in the energy sector.
