Oando Plc has officially solidified its position as Nigeria’s first indigenous International Oil Company (IOC) through its operations beyond Nigeria, particularly in the Sao Tome and Principe Exclusive Economic Zone (EEZ).
This remarkable achievement marks a significant milestone for the company, reflecting the dedication and strategic foresight of its leadership team, headed by its Chief Executive Officer, Mr. Wale Tinubu, who ventured into the oil and gas business in Nigeria decades ago.
Oando, a leading African exploration and production company, has gained recognition for its world-class operations and is renowned for being at the forefront of Africa’s upstream sector.
The company has made substantial investments in a diverse portfolio of oil and gas fields and holds interests in both onshore and offshore producing assets.
Oando’s extensive asset base spans the exploration, development, and production of oil and gas, boasting over 16 licenses for these activities.
These licenses cover a range of terrains, including onshore, swamp, and offshore fields, enabling Oando to maintain a strong presence across various oil and gas operations.
One of the company’s most notable achievements is the acquisition of a Certified Professional Reserves Report (CPR) from DeGolyer and MacNaughton (D&M), the second-largest certification firm globally, which has also been auditing major oil players like ENI/NAOC, Chevron, and Shell for decades.
The CPR report, based on Oando’s original 20% Certificate of Proficiency (CoP) stake and its newly acquired 20% stake in NAOC, indicates that the company’s Gross Recoverable 2P reserves, as well as its Net Present Value (NPV) at a 10% discount, have reached $2 billion each.
This brings Oando’s total company value to a staggering $4 billion before accounting for acquisition-related debt and legacy debt.
After applying appropriate discounts and accounting for working capital, the company’s actual Net Asset Value (NAV) stands at around $3 billion, after deducting all long-term debt.
Given Oando’s substantial earnings in US dollars and the inflation disparity between Nigeria and the US, where inflation is about 3% compared to Nigeria’s over 30%, a devaluation rate of 27% has been calculated for 2024.
A source close to the company’s operations commented, “Year-on-year, this is at least 15% in the best of times. The investment will be phenomenal in Naira terms.”
Oando has diversified its energy portfolio with significant investments in power generation. The company operates two power plants, Kwale 1 and 2, with a combined capacity of 500MW, which includes three large gas plants.
It also has a dedicated gas pipeline that supplies Eleme Petrochemicals, positioning Oando as a major player in Nigeria’s petrochemical sector.
In addition to its gas plants and pipelines, Oando operates over 200 wells, nine flow stations, and its own export terminal, Brass, further cementing its status as a major IOC.
Despite challenges, particularly related to security in Nigeria’s Niger Delta region, Oando has continued to thrive.
The company reached a production peak of 100,000 barrels of oil per day in 2023, alongside an impressive 1.5 billion standard cubic feet (SCF) of gas production.
Beyond financial performance, Oando places a strong emphasis on creating a lasting impact. As part of its corporate philosophy, the company prioritizes legacy building and empowering others by creating a world-class company that serves as a model for future generations.
Oando has consistently delivered value to its stakeholders by growing its reserves and acquiring producing assets from international oil companies.
It also focuses on nurturing young talents through its rigorous training and exposure programs, attracting seasoned professionals from various multinational companies.
In 2023, Oando’s stock recorded an impressive 159% year-to-date gain. This momentum carried into 2024, with the company’s share price rising by an additional 14% in the first quarter.
The company’s 2023 financial results, released on May 31, 2024, revealed a remarkable turnaround, with a pre-tax profit of N104.1 billion, a significant improvement compared to the N61.8 billion pre-tax loss in 2022.
Following the announcement of its 100% acquisition of NAOC, Oando’s share price surged to a five-year high of N47.85, reflecting a year-to-date gain of 371.5%.
This remarkable performance ranked Oando as the second-best performing stock on the Nigerian Exchange (NGX) at the time.
Addressing these positive developments, Oando’s CEO, Wale Tinubu, expressed pride in the company’s achievements despite ongoing challenges.
He stated, “Despite persistent pipeline vandalism across the Niger Delta, which continues to dampen crude production, we achieved a profit after tax of N74.7 billion in 2023.
This was largely driven by increased trading volumes from our strategic global partnerships and net foreign exchange gains on the group’s foreign currency-denominated assets, contrasting with losses on our foreign currency-denominated liabilities.”
Looking ahead, Oando’s acquisition of NAOC is considered a transformative move, potentially increasing the company’s production capacity and strengthening its position in the oil and gas industry.
Tinubu has reassured stakeholders of the company’s commitment to optimizing its new assets, enhancing production, and pursuing strategic diversification into clean energy and energy infrastructure.
With this bold expansion and diversification strategy, Oando is well-positioned to remain a dominant force in Nigeria’s energy sector for years to come.
Oando Plc’s evolution into Nigeria’s first indigenous IOC is a testament to its resilience, strategic investments, and dedication to growth.
From securing key oil and gas assets to diversifying into power generation and petrochemicals, the company has consistently demonstrated its ability to navigate challenges while delivering value to its shareholders and stakeholders.
