Nigeria: Oando plans to double its production with the acquisition of Eni

Nigeria: Oando plans to double its production with the acquisition of Eni
Nigeria: Oando plans to double its production with the acquisition of Eni

In a bold move that redefines the Nigerian energy landscape, Oando is set to complete the purchase of Eni’s entire upstream business in Nigeria. This major acquisition, valued at approximately $500 million, is seen as a strategic pivot for Oando which aims to double its current production to 50,000 barrels of oil equivalent per day (boe/d) in the short term, and to increase it up to 100,000 boe/d by the end of the decade.

Implications of the agreement

The agreement includes four producing oil blocks — OMLs 60, 61, 62 and 63 — which constitute a JV (joint venture) with the Brass terminal, onshore exploration concessions, and vital energy infrastructure. Eni currently holds an operational share of 20% in this JV, alongside Oando with 20% and the national company NNPC (Nigerian National Petroleum Company) with 60%. Post-acquisition, Oando’s stake in the JV will increase to 40%.

Growth and expansion strategy

Oando’s expansion strategy, as outlined by Alex Irune, the Director of Operations, is based on intensive drilling programs in marginal fields, including Qua Iboe (OML 13) and Ebendo (OML 56).

“We plan to drill four to five wells on these two fields in the next 18 months, which will significantly increase our production capacity. »

These fields benefit from privileged access to export terminals, facilitating logistics and supporting rapid expansion.

Impact on the industry and responses to challenges

The development comes as local companies, such as Seplat and a consortium led by Nigerian companies, take over onshore assets from international oil companies (IOCs) withdrawing from mature African basins. This shift towards less carbon-intensive projects and less risky offshore developments raises questions about the ability of these domestic companies to manage major assets and finance new drilling at a critical time for Nigeria’s oil sector.

Regulatory challenges and government approval

Government approvals for such transactions are essential and sometimes complex. Last July, NNPC reported that it had not yet agreed to the Oando-Eni transaction, which is also supported by an $800 million loan from the African Export-Import Bank. This delay in approvals raises questions about the political will to allow such a transition, although the government generally appears to support this shift towards greater control by local companies.

Oando’s ambition to double and then quadruple its production in the coming years could not only transform its own trajectory but also revitalize Nigeria’s struggling oil industry. With legislative reforms, improved security, and proactive management, Oando is well positioned to lead this transition and boost the local economy while reducing incidences of theft and sabotage through greater stakeholder engagement. native.



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