. As NNPC clarifies transactions on downstream operations
By Stanley Onyeka, Lagos and Tochukwu Bliss, Abuja
Oando Plc yesterday, announced the completion of the acquisition of 100% of the shareholding interest in the Nigerian Agip Oil Company (NAOC) from the Italian energy company, Eni, in a deal totalling $783 million.
The transaction comprised consideration for both the asset and reimbursement, even as the NNPC Ltd clarified the sale of its downstream arm to OVH, a firm in which Wale Tinubu, the nephew of President Bola Tinu, allegedly owns substantial shares.
Oando in a filing to the Nigeria Exchange (NGX), signed by its Chief Compliance Officer and Company Secretary, Ayotola Jagun, described the NAOC assets acquisition as “a significant milestone in Oando’s long-term strategy to expand its upstream operations and strengthen its position in the Nigerian oil and gas sector.”
Indeed, the Group Chief Executive, Oando Plc, Wale Tinubu, was quoted as saying: “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 optimising the assets’ immense potential, advancing production and contributing to our strategic objectives.”
He added that “Looking to the future, we will continue to pursue strategic diversification opportunities within the broader energy sector that provide enhanced growth and value creation for our stakeholders, particularly in clean energy, agri-feedstock sector, as well as energy infrastructure and mining,” he said.
Deal components
The transaction, which is immediately cash generative, will contribute significantly to Oando’s cashflows. Additionally, it will:
- Increase the company’s current participating interests in the NAOC-operated onshore assets in OMLs 60, 61, 62, and 63 from 20 to 40%;
- NEPL/NAOC/OOL Joint Venture assets and infrastructure which include 40 discovered oil and gas fields, of which 24 are currently producing;
- Approximately 40 identified prospects and leads;
- 12 production stations;
- Approximately 1,490 km of pipelines;
- Three gas processing plants;
- The Brass River Oil Terminal;
- The Kwale Okpai phases 1 & 2 power plants (with combined nameplate capacity of 960MW), and associated infrastructure.
Based on 2022 reserves estimates, Oando’s total reserves stand at 505.6 million barrels of oil equivalent (MMboe). The transaction will then deliver a 98% increase of 493.6 million barrels of oil equivalent (MMboe), bringing the total reserves to 1.0 billion (boe).
NNPC management’s investment decisions are strictly determined on the basis of commercial viability and national interest.
OVH acquisition: The Facts, by NNPC
Responding to former Vice President Atiku Abubakar’s allegation of “the criminal hijack of the NNPC by corporate cabals around the current President,” regarding the sale of NNPC’s downstream operations to OVH, the Company defended that the transaction was strictly commercial.
Mr. Abubakar had accused the President of turning Nigeria into a private enterprise, noting that the “future of Nigerians has been effectively mortgaged to President Bola Tinubu, his family, and associates.”
But countering the former Vice President’s allegations in a statement, NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, maintained that the company’s investment decisions “are strictly determined on the basis of commercial viability and national interest.”
Specifically, Mr, Abubakar, through his Media Adviser, Paul Ibe, had alleged that the retention of Mr. Mele Kyari as the Group Chief Executive Officer of NNPC, was a compensation for the acquisition of NNPC Retail Ltd., by OVH in which Mr Wale Tinubu held 49% stake.
He further alleged that the NNPC Retail —OVH acquisition deal was part of a grand scheme by President Tinubu to integrate his personal business interests into Nigeria’s public enterprises at the federal level.
In defence, Mr. Soneye recalled that:
“At the time NNPC Ltd acquired OVH in 2022, Oando (in which Mr. Wale Tinubu has equity interest), had fully divested its equity in OVH to the two other partners – Vitol and Helios.
“Oando actually began its divestment in 2016, with Vitol and Helios coming in as equity partners, leading to the change of name from Oando to OVH.
“In 2019, Oando fully divested its equity interest in OVH resulting in Vitol and Helios holding 50% equity interests respectively.
“Upon acquisition of OVH by NNPC Ltd, both NNPC Retail Ltd and OVH effectively became subsidiaries of NNPC Ltd.”
He continued: “However, based on professional advice and sound commercial considerations, NNPC Ltd opted to merge NNPC Retail Limited into OVH, and thereafter retain NNPC Retail Limited as the company name post-merger.
“The first step of merging NNPC Retail Ltd into OVH has been completed and the post-merger renaming as NNPC Retail Ltd is ongoing.”
But NNPC’s clarification did not include that in September 2022, OVH Energy BV, a joint venture between Vitol and Helios, sold its 100% share in OVH Energy Marketing Limited to Nueoil Energy Limited, a local Nigerian company.
This marked OVH Energy BV’s exit from Nigeria.
Also, very little is known of Nueoil Energy Limited, upon an internet search.
