Oando Secures $650m Afreximbank Loan To Complete Nigerian Agip Oil Company Acquisition

Oando Plc has secured a $650 million loan facility from the African Export-Import Bank (Afreximbank) to complete its $783 million acquisition of the Nigerian Agip Oil Company (NAOC).

This significant financial milestone was announced by Afreximbank on Friday, marking a key moment in Oando’s expansion within Nigeria’s oil and gas sector.

The loan, which includes both senior and junior reserve-based lending facilities, was critical in enabling Oando to finalise the acquisition from Italian energy giant Eni. Specifically, the bank arranged a $500 million senior credit facility and a $150 million junior reserve-based lending facility for the deal, effectively covering a large portion of the acquisition cost.

“Afreximbank has successfully arranged a senior US$500-million and a junior US$150-million reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited. The facility was used to finance Oando’s acquisition of the 20 percent participating interest held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria,” the bank disclosed in its announcement.

This joint venture, which holds significant oil and gas assets, has already produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas. Notably, an estimated 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remain, making the venture a highly lucrative asset for Oando.

Afreximbank played a multifaceted role in facilitating this transaction, acting as the mandated lead arranger, bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee. The bank also underwrote $350 million of the facility, demonstrating its deep commitment to supporting Oando’s strategic objectives.

Mr. Haytham El Maayergi, Executive Vice President of Global Trade at Afreximbank, highlighted the significance of the loan facility, stating, “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.”

Mr. Wale Tinubu, the Group Chief Executive of Oando Plc, reflected on the achievement, describing it as the culmination of a decade of dedication and strategic vision.

“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’s 20 percent stake,” Mr. Tinubu said.

The acquisition significantly bolsters Oando’s presence in Nigeria’s oil and gas industry. As a result of this deal, Oando’s participating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 has doubled from 20 percent to 40 percent. This expansion enhances Oando’s operational footprint, providing greater control over key infrastructure assets, including approximately 1,490 kilometers of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai power plants with a combined capacity of 960 MW.

The acquisition of NAOC is poised to strengthen Oando’s upstream capabilities, positioning the company as a more formidable player in the Nigerian oil and gas sector. This move not only increases Oando’s stake in the joint venture’s 40 discovered oil and gas fields but also enhances its ability to contribute to the nation’s energy security and economic growth.

With the support of Afreximbank, Oando is set to continue its trajectory of growth and innovation, further solidifying its role as a key player in Africa’s energy landscape.