Financial Energy Review
………..by Ben Ndubuwa….
Oando, one of the indigenous oil and gas company, has projected that it would up its crude production to 50,000 barrels per day and target 100,000 barrel per day in four years time an oil equivalent after the conclusion of the landmark deal with Eni.
Alex Irune, Oando’s Chief Operating Officer, told S&P Global Commodity Insights at the weekend that the firm intends scaling up to 100,000 bpd by 2029, thanks to new drilling and security improvements.
The Nigerian company’s bid to buy the Italian major’s entire Nigerian upstream business reflects a major shift in Africa’s biggest oil producer, with local firms replacing departing International Oil Companies (IOCs).
Irune during an interview with S&P Global,however,informed that “What we are seeing is a careful, considered approach to ensuring that the country isn’t materially impacted in a negative way, ensuring the indigenous players are able to straddle the horse and ride it into the horizon,” rather than that approvals had been an issue.
He said that, Oando which will become one of Nigeria’s biggest domestic producers through the agreement, “working through the obligations under the Share Purchase Agreement” and is “on track” to close the deal this quarter.
According to S&P the estimated $500 million acquisition covers four oil producing blocks OMLs 60, 61, 62 and 63, which comprise a joint venture alongside the Brass terminal, onshore exploration concessions and power plants.
Eni currently holds a 20 per cent operating stake in the JV alongside Oando with 20 per cent and state-owned Nigerian National Petroleum Company Limited (NNPC) with 60 per cent.
Oando, which is run by Adewale Tinubu is currently producing 25,000 bpd, according to Irune, through myriad Nigerian assets. Following the deal its JV stake will rise to 40 per cent.
Production rises over the next five years will be achieved through drilling programmes on marginal fields, particularly Qua Iboe (OML 13) and Ebendo (OML 56).
