The Nation Newspaper

Tag: Oando

  • Reps threaten warrant of arrest against recalcitrant oil company chiefs 

    The House of Representatives has threaten to issue warrant of arrest against Chief Executive officers (CEO) of some major oil companies for failing to honour it’s invitations.

    The oil companies that include Total Nigeria Plc, Mobil Nigeria, NIPCO, Forte Oil, Oando and MRS among others were being investigated for alleged huge debts and criminal acts of sabotage by oil marketers.

    Chairman, ad hoc committee mandated to carry out the investigation, Abdulahi Gaya Wednesday expressed concern over the attitude of the affected CEOs that have consistently failed to either honour the Committee’s invitation or failed to provide requested documents for the investigation.

    He said: “Before we started this investigation, what we did as a committee was to sit down to digest and see the best way out and fortunately for us, so far we have recovered a lot of money, huge amount of money.

    “We called PPMC to give us information on the outstanding of oil marketers and they came and told us. We then sent letters to 17 oil marketers to send in documents and tell us their own part, the outstanding.

    “We also requested that they come and defend it but instead of doing that, they are sending representatives. Why are sending persons that are not part of their organizations?”

    According to him, the investigation was to ascertain the veracity or otherwise of the claims of the Petroleum Product Marketing Company (PPMC) as well as the oil marketers who are the actors on the matter with a view to ensuring that the Nigerian government was not short-changed in anyway.

    Gaya, who revealed that 50 percent of the debts arising from default by  oil marketers has been recovered, however did not disclosed the actual amount recovered so far.

    While he noted that the amount was stipulated in the documents obtained from various stakeholders, the lawmaker expressed optimism that 80 percent of the money would be recovered by the end of the investigation.

  • Oando concludes $116m midstream divestment

    Oando concludes $116m midstream divestment

    Oando Plc yesterday completed a partial divestment of 49 per cent equity stake in its midstream business subsidiary, Oando Gas and Power Limited (OGP), to Glover Gas & Power BV, a special purpose vehicle owned by Helios Investment Partners LLP (Helios).
    Oando in September, announced that it had reached an agreement to sell 49 per cent equity stake in OGP to a new major investor for $115.8 million, about N34 billion. With the completion, Oando will retain 49 per cent equity stake and voting rights in OGP.
    Group Chief Executive officer, Oando Plc, Mr Wale Tinubu, said the completion of the transaction marks the commencement of strategic partnership that will firmly leverage OGP’s local knowledge and expertise, alongside Helios’s global network and financial capabilities to optimise operations and expand the company’s footprint.
    He said the closure of the transaction underlines Oando’s status as the indigenous partner of choice for international firms in the oil and gas industry.
    Co-founder and managing partner, Helios Investment Partners, Tope Lawani also noted that the completion of the transaction underscores Helios’ commitment to investing in businesses that deliver energy access solutions to industries and consumers across the continent.
    “We look forward to working closely with the OGP management team and other industry stakeholders to consolidate the company’s position as a premier provider of cost-effective and reliable gas and power infrastructure,” Lawani said.
    OGP is the pioneer developer of Nigeria’s foremost natural gas distribution network and has subsequently grown to become the largest private sector gas distributor in Nigeria, delivering at peak, 70 million standard cubic feet per day (mmscf/d) to over 175 industrial and commercial customers through a vast network of gas infrastructure.
    With over 260km in pipeline infrastructure built, OGP provides energy solutions primarily through its subsidiaries: Gaslink Nigeria Limited (Gaslink), Gas Network Services Limited (GNSL), and Central Horizon Gas Company (CHGC).
    In May, OGP announced the development of a mini Liquefied Natural Gas (LNG) facility through its newly-created Transit Gas Nigeria Limited (TGNL) subsidiary in Ajaokuta, Kogi State. The pioneering 20 mmscf/day liquefaction plant will aim to fulfill the gas supply requirements for captive power plants, embedded generation, and industrial clusters in the Northern region, as well as stranded customers in the South.

  • Oando sells 49% stake in gas, power subsidiary for N35b

    Oando sells 49% stake in gas, power subsidiary for N35b

    Oando Plc has agreed to sell 49 per cent equity stake in its midstream subsidiary, Oando Gas and Power (OGP) Limited to a new major investor for $115.8 million (about N34 billion), at the current official exchange rate of N305 per dollar.

    A regulatory filing at the Nigerian Stock Exchange (NSE) yesterday indicated that Oando has reached definitive agreement to sell the 49 per cent equity stake and voting rights in OGP to a Special Purpose Vehicle (SPV) owned by Helios Investment Partners LLP (Helios), a premier Africa-focused private investment firm.

    Upon completion, Oando will retain 49 per cent equity stake and voting rights in OGP, while the remaining two per cent would be held by a Nigerian firm. However, the agreed transaction consideration of $115.8 million is subject to the receipt of regulatory approvals and customary purchase price adjustments.

    OGP is widely regarded as the pioneer developer of Nigeria’s foremost natural gas distribution network and has subsequently grown to become the largest private sector gas distributor in the country. It delivers at peak, 70 million standard cubic feet per day (mmscf/d) to over 175 industrial and commercial customers via its vast gas infrastructure network.

    With over 260km in pipeline infrastructure built, OGP provides energy solutions primarily through three subsidiaries including Gaslink Nigeria Limited (Gaslink), Gas Network Services Limited (GNSL), and Central Horizon Gas Company (CHGC).

    Its Group Chief Executive Officer, Oando Plc, Mr. Wale Tinubu said the strategic alliance will firmly leverage on the group’s local knowledge and expertise and Helios’ strong financial capabilities to build a more formidable company that will exceed existing performance.

    “Through the optimisation of our existing business operations and the expansion of our footprint, we will revolutionise the sector and position gas as a key driver for Nigeria’s economic empowerment. We look forward to completing the transaction, which will create a formidable leader of gas and power solutions in sub-Saharan Africa,” Tinubu said.

    In his remarks, co-founder and managing partner, Helios Investment Partners, Tope Lawani said the transaction was consistent with Helios’ strategy of investing in businesses that provide cost-effective and reliable energy access solutions.

    “We look forward to supporting OGP’s continued growth and working with all stakeholders to improve the reliability of gas supply to the company’s numerous industrial customers, who all play a critical role in the growth of the economy,’’ Lawani said.

    Oando had earlier used the same arrangement to conclude partial divestment of its downstream business.

    HV Investments II BV (HVI), a consortium of new core investors, had injected $210 million into the downstream operations of Oando as part of the highlights of the partial divestment of equity stake in the energy group’s downstream operations to HVI, a joint venture owned by Helios Investment Partners (Helios) and the Vitol Group (Vitol).

    Under the divestment and recapitalisation deal, a new company will be formed to hold interests in Oando Marketing Limited, Oando Supply & Trading Limited, Apapa SPM Limited, and Oando Trippmart Limited. Oando Plc will retain 49 per cent shareholding in the newly formed corporate vehicle, with the consortium owning 49 per cent, and the residual two per cent owned by a local entity.

    The new company will be renamed OVH Energy (OVH) to reflect its ownership structure and the commitment of its new shareholders.

  • Oando begins training of 500 mechanics

    Oando begins training of 500 mechanics

    Oando Marketing has commenced the 2016 edition of its Oleum Academy Initiative with the induction of 500 mechanics. The initiative is meant to bridge the gap between the number of professional mechanics and the requisite skills needed in the Nigerian auto-mechanic industry.

    Launched in 2014, the Oleum academy was designed to support the alternative learning and skills development project, an initiative of the African Development Bank which provides high quality vocational training and mirrors the Millennium Development Goals (MDGs) for poverty reduction and the development strategy in the country.

    Selected participants were shortlisted through nominations on online media platforms and by recognized mechanic associations; Nigerian Automobile Technician Association (NATA), and Motor Mechanic and Technician Association of Nigerian (MOMTAN).

    This year’s edition of the initiative will offer 500 mechanics a three-month programme of diverse learning mediums including in-class instruction on subjects comprising auto diagnosis, electromotive and workshop management. Facilitation is done in partnership with Automedics, a renowned automotive mechatronics outfit that specializes in automobile training and education, vehicle diagnosis, maintenance and sales of spare parts. Successful trainees are awarded a certificate in Automotive Mechatronics Training upon completion of the programme.

    Speaking on the initiative, the Chief Executive Officer of Oando Marketing Limited, Yomi Awobokun said: “Oleum Academy is aimed at improving the expertise level of Nigerian auto-mechanics and ensuring the skill acquisition rate is up to par with the evolution in the auto industry.

    We expect this project to contribute to the Nigerian economy by creating more opportunities for the mechanics and car owners. We remain committed to the goal to train 5000 mechanics by the year 2020.

    “The Oleum Academy initiative is positioned to address several issues. To begin with, car technology is constantly evolving and vehicle features are becoming more advanced than ever. As a result, vehicles can prove either interesting or difficult to work on depending on the mechanic’s level of training.

  • Oando opens fuel retail station

    Oando opens fuel retail station

    Oando Marketing Limited has opened a retail station in Orile, Lagos.

    The quality of the station is consistent with the company’s commitment to lead in fuels retailing in Nigeria.

    With a fuels distribution capacity of over two billion litres yearly, Oando has retained its leading market share for fuels retailing and is poised to continue to expand leveraging its strong brand affinity, efficient distribution capacity and entrepreneurial heritage.

    The new station called Oando KM3, Orile boasts of modern, contemporary and eye-pleasing design with detailing infused to meet the needs of customers and travellers on the expressway.

    The station upgrade was timely done to complement the new 10 lane super highway, billed for completion in less than 24 months. It is also close to one of the passenger train stations on the new highway.

    The station can service over 2000 cars per day with ultra-fast premium fuel dispensing units configured to deliver accurate quantities at all times to ensure consumers receive value for their money. It will deliver products to customers in the Ijora, Orile and Iganmu axis.

    The Chief Executive Officer, Oando Marketing Limited, Mr. Abayomi Awobokun expressed satisfaction with the quality of the station’s upgrade, its visual contribution to the neighbourhood, the environmental considerations in its design and most important the value it would bring to customers and travelers on the Lagos-Badagry super highway when it is completed.  He acknowledged the hospitality of the host community, led by the Ojora of Ijora, Oba Abdulfatai Oyeyinka Aremu Aromire.

  • Oando grows turnover by 18% to N212b in H1

    Oando Plc grew its top-line by about 18 per cent to N212 billion in the first half of this year as the energy group continued efforts to deleverage its balance sheet and extract greater value from its high-margin businesses.

    Interim report and accounts of Oando for the six-month period ended June 30, 2016 released yesterday at the Nigerian Stock Exchange (NSE) showed that group turnover rose by 17.8 per cent to N212 billion in first half 2016 as against N180 billion recorded in the comparable period of 2015. Gross profit however decreased by 49 per cent to N19 billion compared with N37.1 billion recorded in the corresponding period of 2015. Loss after tax however decreased by 23 per cent to N27 billion in first half 2016 as against N35.0 billion in comparable period of 2015.

    The bottom-line performance came against the background of the effects of the global slump in oil prices which has seen Nigeria’s oil export receipts decline dramatically, indigenous firms face a scale back in proposed Joint Ventures with IOCs, deeper cuts to capital spending, finding new markets and investor wariness.

    Oando’s bottom-line was impacted by a 25 per cent reduction in daily production volumes from 56 kboepd in first half 2015 to 45 kboepd in first half 2016, as a result of production disruption from militants’ activities in the Niger Delta. Also, the devaluation of the Naira by the Central Bank of Nigeria in second quarter 2016, from an average exchange rate of N199 per dollar to N280 per dollar, resulting in unrealized foreign exchange losses due to the company’s dollar denominated liabilities.

    Group chief executive, Oando Plc, Mr. Wale Tinubu, noted that the first half of the year has revealed how challenging the oil and gas environment was in Nigeria with disruptions from militancy.

    He said the group however benefitted from the implementation of the oil price hedge, which has helped it to calm the effects of the disruption of production activities, adding that now that the dollar liquidity position in the country has improved, the group has converted 60 per cent of its dollar denominated obligations to Naira, while restructuring its debt through the N108 Billion medium term note, thus managing any future currency volatility.

    “We reiterate our forward looking business model of a focused upstream and export trading businesses, which will drive profitability through consistent dollar earnings,” Tinubu said.

    According to him, as part of plans to return the company to profitability by year-end 2016, Oando is in the concluding phase of its five-pronged strategic group initiatives, 67 per cent of its non-producing asset disposals and 50 per cent of refinancing target have been concluded.

    He pointed out that in the first half the company successfully restructured its debt through a N108 billion Medium Term Note with lower capital costs circa 15 per cent and a renewed five year tenor in the first quarter of 2016 as well as the full divestment of its upstream services business, reducing the group’s debt profile by 32 per cent.

    He said that Oando had in July 2016 successfully concluded recapitalization of its downstream business for $210 million, the net cash proceeds of the transaction have been used to further reduce a significant portion of the debt on the group’s balance sheet.

  • Oando opens fuel retail station

    Oando opens fuel retail station

    Oando Marketing Limited has opened a retail station in Orile, Lagos.

    The quality of the station is consistent with the company’s commitment to lead in fuels retailing in Nigeria.

    With a fuels distribution capacity of over two billion litres yearly, Oando has retained its leading market share for fuels retailing and is poised to continue to expand leveraging its strong brand affinity, efficient distribution capacity and entrepreneurial heritage.

    The new station called Oando KM3, Orile boasts of modern, contemporary and eye-pleasing design with detailing infused to meet the needs of customers and travellers on the expressway.

    The station upgrade was timely done to complement the new 10 lane super highway, billed for completion in less than 24 months. It is also close to one of the passenger train stations on the new highway.

    The station can service over 2000 cars per day with ultra-fast premium fuel dispensing units configured to deliver accurate quantities at all times to ensure consumers receive value for their money. It will deliver products to customers in the Ijora, Orile and Iganmu axis.

    The Chief Executive Officer, Oando Marketing Limited, Mr. Abayomi Awobokun expressed satisfaction with the quality of the station’s upgrade, its visual contribution to the neighbourhood, the environmental considerations in its design and most important the value it would bring to customers and travelers on the Lagos-Badagry super highway when it is completed.  He acknowledged the hospitality of the host community, led by the Ojora of Ijora, Oba Abdulfatai Oyeyinka Aremu Aromire.

    He said: “Despite industry challenges, Oando Marketing is still able to compete favourably amongst its peers evidenced not only by its market share and current station footprint but also by its ability to continue upgrading and growing its network right across the country.”

  • Oando forewarns of lower profit over forex loss

    Oando Plc has forewarned investors that it might record lower profit in the first half due to foreign exchange losses suffered by the energy group during the second quarter.

    In a profit warning released yesterday at the Nigerian Stock Exchange (NSE), Oando stated that it expects that its half-year earnings for 2016 will be materially affected by the impact of recent change in foreign exchange (forex) regime from fixed to market-determined rates, which led to devaluation of Naira against the Dollar.

    According to the company, the impact of the forex change is expected to amount to an unrealized foreign exchange loss arising from Dollar-denominated liabilities, outstanding bank trade facilities as well as vendor payables.

    As at the time of the devaluation the company had Dollar-denominated borrowings of $261 million in its Naira-dominated earnings businesses, consisting of $68 million in core loans, $89 million in bank trade facilities, $83 million in asset financing and $21 million in other payables.

    “A circa 40 per cent devaluation in the value of the Naira against the US dollar from the bank rate of N199.00:$1.00 to N280.00:$1.00, has effectively resulted in these significant foreign exchange losses which we have prudently booked into our financial statements,” Oando stated.

    The company however assured that despite the challenging operating landscape in 2016, it remains focus on returning to profitability by growing its dollar earning higher margin upstream and export trading businesses, which will not be impacted by the volatility of forex rates.

    “We remain confident in our diversified business model and the long-term prospects for growth in Nigeria and beyond,” Oando stated.

    The group also recently agreed a N70.5 billion recapitalisation of its downstream business with Vitol, the world’s largest commodities trader and Helios Investments Partners, a premier West African focused private equity firm.

    Commenting on the company’s confidence in its diversified business model and the long-term prospects for growth in Nigeria and beyond, group chief executive, Oando Plc, Mr. Wale Tinubu said the group had implemented constructive corporate initiatives which are driving forces for its business in this new global reality of economic restraint and lower oil prices.

    “The successful and ongoing implementation of these initiatives reiterates our strategy of growth, deleverage and a return to profitability by the end of 2016. As a group we have placed our focus on growing our upstream higher margined business while still holding fundamental interests in the midstream and downstream sectors. We look forward to a rewarding year, where we solidify our aspirations and return to profitability,” Tinubu said.

    According to him, the group is evolving to adapt as market-driven efficiencies have encouraged it to implement a necessary corporate reset through recapitalization to ensure alternative capital access to optimize its business operations and value preservation for its shareholders.

  • Oando downstream to be renamed OVH Energy

    Oando downstream to be renamed OVH Energy

    • Partners inject $210m

    The downstream arm of Oando Plc, Nigeria’s leading indigenous energy group, will soon be renamed OVH Energy following the conclusion of the $210 million (about N70.5 billion) recapitalisation of the Oando downstream.

    The new name reflects the new owners of the firm, which injected the huge fund to make it globally competitive. The firms that injected the fund include Oando Plclisted on both the Nigerian and Johannesburg Stock Exchanges, HV Investments II B.V., a joint venture owned by Helios Investment Partners, a premier Africa-focused private investment firm and the Vitol Group, the world’s largest independent trader of energy commodities.

    The conception of the deal was announcement on June 30, last year and with the conclusion, the new company formed would hold interests in Oando downstream comprising Oando Marketing Limited, Oando Supply & Trading Limited, Apapa SPM Limited, and OandoTrippmart Limited. Oando Plc will retain 49 per cent shareholding in the newly formed corporate vehicle, with the Consortium owning 49 per cent, and the residual two per cent owned by a local entity.

    Commenting on the transaction, Oando Plc’s Group Chief Executive, Wale Tinubu, said: “Despite global economic headwinds, we have taken the proactive approach to establish a strategic partnership which will leverage Oando’s sector dominance, considerable local knowledge and expertise; together with HVI’s international, and technical capabilities. This partnership will reinvigorate Nigeria’s downstream sector and create one of Africa’s largest downstream operations. We are extremely confident in the success and potential returns this alliance will deliver.”

  • Oando records N4.1b net profit in three months

    Oando records N4.1b net profit in three months

    Oando Plc’s operational reports and audited financial statements indicate that the leading indigenous energy group recorded a net profit of N4.1 billion in the first quarter of this year.

    The three-month report  is for the period ended March 31, 2016. It was released at the weekend.

    The report raises hopes on the prospects of the energy group in the current business year, after global and domestic headwinds left the company in the red in the previous two years. Oando also released its full-year audited report and accounts for the year ended December 31, 2015.

    Flowing from the results, Oando’s share price rose by 2.92 per cent on Friday, the fourth highest gain in a trading session that saw average decline of 0.99 per cent at the stock market.

    The results were delayed, the company said, due to an exhaustive audit process overseen by external auditors, Ernst & Young. As a result, it an extension was sought and approvals received by Oando from the Securities and Exchange Commission (SEC) and the Financial Reporting Council of Nigeria (FRCN).

    Investors will be buoyed by the N4.1 Profit-After-Tax increase, representing a 120 per cent increase compared to this Q1 2015 figures. The company’s financial highlights also indicated that turnover decreased by 34 per cent, with N64 billion realised compared to N97.1 billion for the same period last year.Global crude pricing fluctuation has changed the corporate landscape for oil companies, and has had far-reaching economic implications on Oando and many other indigenous firms in the industry.

    The Group’s Chief Executive, Oando Plc, Wale Tinubu, said the first quarter performance demonstrated the group’s dedication to return to profitability by the end of the 2016.

    “We have implemented constructive corporate initiatives which are driving forces for our business in this new global reality of economic restraint and lower oil prices in our industry. The successful and ongoing implementation of these initiatives reiterates our strategy of growth, deleverage and a return to profitability by the end of 2016. As a group, we have placed our focus on growing our upstream higher margined business while still holding fundamental interests in the midstream and downstream sectors. We look forward to a rewarding year, where we solidify our aspirations and return to profitability,” Tinubu said.

    According to him, as oil prices gradually increased, Oando had commenced 2016 with a reinvigorated strategy hinged on key corporate initiatives to drive the company back to profitability and ensure fiscal efficacy, including optimisation of its balance sheet the company focused on aggressive debt reduction and recapitalisation.

    He noted that the group successfully restructured its existing debt through a N94.6 billion medium term note (MTN) with a local consortium with lower interest rates and a renewed five-year tenor, while its upstream subsidiary, Oando Energy Resources (OER), completed its 2015 year-end summary of reserves recording a six per cent growth in 2P net reserves from 420.3 mmboe to 445.3 mmboe. The increase is attributed to the recognition of reserves related with producible oil and gas volumes. 2C Resources also increased by 70 per cent from 122mmboe to 208mmboe.

    Official operational report showed that in the midstream, Oando Gas & Power (OGP) maintained its legacy of building successful pipeline businesses, generating returns and transferring on operatorship. The company successfully concluded the divestment of the Akute Independent Power Plant, a 12.15 megawatts power station servicing the Lagos State Water Corporation. OGP also signed a development agreement with TVER/ Micro LNG to develop a 20 mmscf/d Mini LNG plant in Ajaokuta, Kogi State, which will service a 1,000km radius in the Northern and Central regions of Nigeria. The facility is expected to commence operations in the second quarter of 2017.

    Also, Oando Downstream agreed on the terms for the sale of a N70.5 billion partial divestment to Vitol, the world’s largest commodities trader and Helios Investments Partners, a premier West African focused private equity firm. This alliance has been hailed as a testament of Oando’s legacy of building a successful downstream giant and a rejuvenation of Nigeria’s downstream sector through operational efficiencies and economies of scale.

    For the full year ended December 31, 2015, Oando recorded a net loss of N49.7 billion on a turnover of N381.7 billion as the global oil and gas industry struggled with historic slump. Oando’s 2015 losses were largely due to impairments and the acquisition cost and interest on debt facilities in Oando’s prolonged acquisition of ConocoPhillips Nigeria’s (COPN) onshore hydrocarbon assets.

    Tinubu recalled that 2015 was a turbulent year for the global oil and gas industry as traditional energy business operations had to be altered to enable industry players survive new reality, utilising cost optimisation systems, increased operational efficiency as well as lower capital expenditure budgets.

    “As the global economy returns to normalcy, we remain committed in our drive to building platforms for long-term sustained value creating businesses,” Tinubu assured.

    Official report meanwhile showed that in spite of the numerous challenges, Oando made significant achievements across the value chain last year. Oando Energy Resources (OER), increased its total production to 20 million barrels of oil equivalent (mmboe) in the period compared with 9.1 mmboe in 2014. The increase between the annual periods was primarily from the acquisition of OMLs 60 – 63 in H2 2014, as well as the commencement of production from the Qua-Iboe field in Q1 2015.

    OER also successfully realised a cash inflow of $234 million by resetting its crude oil hedge from the previously hedged average of $95.35 per barrel to a new price of $65.00 per barrel on 10,615bbls/day till July 2017, as well as an additional 1,553 bbls/day until January 2019. The proceeds of the hedge reset along with cash-in-hand were used to pay down substantial portion of the company’s debt.

    By December 2015, Oando Gas & Power (OGP) had completed 87 per cent of the Greater Lagos Phase 4 pipeline project which runs from Ijora to Bonny Camp in Lagos State. The Midstream subsidiary also commenced an 8.5km pipeline expansion project for the Central Horizon Gas Company, to increase CHGC’s capacity to 70mmscf/day.

    Oando Downstream successfully concluded tie-ins to third party terminals via a 2km Horizontal Directional Drilled pipeline. The jetty will alleviate delays associated with product delivery into the Apapa, reduce long term cost of operations, as well as provide possible revenue streams from excess capacity. In 2015, the marketing arm completed upgrading of its LPG plants, the Apapa LPG plantcapacity was upgraded from 15mt/day to 30mt/day, representing a 100 per cent increment, while the Benin plant was upgraded to include best in industry safety standards.