Oando plc, one of Nigeria’s leading energy companies, has recently made big moves in the international scene, expanding its presence outside its country of origin, and consolidating its activities throughout the entire value chain, writes Ibrahim Imoye
Continuing with its bold plans to take its ambitions beyond Nigeria and indeed Africa, Oando Plc is steadily cementing its place as a formidable player in the global oil and gas industry.
From the rich hydrocarbon reserves of Angola’s Kwanza Basin to the refining hubs of Trinidad and Tobago, the Nigerian energy giant is expanding its footprint with strategic acquisitions and partnerships that position it as a key contender in the international energy market.
Beyond these recent headline acquisitions in Angola as well as Trinidad and Tobago, Oando had long before now, established a presence in São Tomé and Príncipe, where it participates in offshore exploration, as well as in Dubai and London, where it operates offices to oversee international trading and business development, sealing its place as a globally competitive entity.
All these strategic business moves have significant implications for the company, the global oil industry, and Nigeria’s economic landscape, especially for Oando as a high-potential firm with roots in Nigeria and branches globally.
The company’s entry into new markets, including its selection as the preferred bidder for the lease of the Guaracara Refinery in Trinidad and Tobago, gives it a headway into the Caribbean energy sector. The refinery, located in Pointe-à-Pierre, has a capacity of 175,000 barrels per day and is pivotal to the region’s oil industry.
It is believed that these moves align with Oando’s strategy to diversify and expand its global footprint.
Besides, the company’s acquisition of operatorship for Block KON 13 in Angola’s onshore Kwanza Basin, signified Oando’s commitment to strengthening its presence in Africa. The block is estimated to hold between 770 to 1,100 million barrels of oil, offering substantial exploration potential.
For the oil and gas industry, Oando’s ventures are expected to boost its production capacity, contributing to global oil supply. The development of Angola’s Block KON 13, in particular, could enhance regional oil output, influencing supply dynamics in the African market.
Furthermore, the collaboration between Oando and entities in Trinidad and Tobago and Angola is the continual of a trend of cross-border partnerships in the oil industry, with such alliances expected to lead to technology transfer, shared expertise, and more integrated energy markets.
In terms of its implication for Nigeria’s economic growth, Oando’s international expansions are expected to lead to increased revenues, potentially boosting Nigeria’s economy. As one of the country’s prominent energy companies, Oando’s success abroad can translate into economic benefits at home.
In addition, these Oando’s winning moves showcase the capability of Nigerian companies to operate on a global scale, enhancing the country’s reputation in the international business community.
The Angola Deal
Oando, through its subsidiary Oando Energy Resources (OER), recently won the operatorship of Block KON 13 in the Kwanza Basin. This was a strategic entry into Angola, one of Africa’s top oil producers.
The block is estimated to contain between 770 million to 1.1 billion barrels of oil, offering a lucrative exploration opportunity. The deal expanded Oando’s portfolio into a high-potential market, enhanced its reputation as an African energy leader and aligned with Angola’s efforts to attract foreign investment into its oil sector.
The block has two exploration wells previously drilled to a target depth of 3,000m, with oil and gas observed across various depths. With a 45 per cent participating interest, OER will lead the development of the block as operator, alongside Effimax (30 per cent) and Sonangol (15 per cent) as co-venturers.
Commenting on the award, Wale Tinubu, Group Chief Executive, Oando Plc, said: “I am thrilled by our successful bid and award of Block KON 13 in Angola. This development underscores Oando’s relentless commitment to expanding our footprint across Africa and contributing to the continent’s energy sufficiency goals.
“ I am confident in our ability to leverage our expertise to develop and maximize the value of this asset. We look forward to collaborating with our co-venturers and other key stakeholders to harness this opportunity and unlock its full potential for Angola and Africa as a whole”.
This milestone, the company said, marked Oando’s strategic entry into the Angolan oil and gas market and represented a significant step in its long-term vision to grow its upstream operations across Africa.
It also solidified the company’s position as a prominent player in the continent’s energy landscape, evolving from a local indigenous operator to a regional powerhouse.
Following the company’s recent successful acquisition of NAOC Ltd in Nigeria, the addition of Block KON 13 further bolsters the company’s upstream portfolio and reflects its commitment to driving regional growth and energy security.
Entering Trinidad & Tobago’s Downstream
Recently, Oando was selected as the preferred bidder for the Guaracara Refinery in Pointe-à-Pierre, Trinidad and Tobago. The refinery, with a capacity of 175,000 barrels per day, was previously operated by Petrotrin before its closure in 2018.
This move marked Oando’s entry into the Caribbean refining market, strengthening the company’s refining and trading business and expanding its presence in the Western Hemisphere as well as offering opportunities for collaboration with Latin American and Caribbean energy markets.
Oando said the award underscored its track record of reliability, innovation, infrastructure development and aligned with its corporate strategic vision of expanding across the Caribbean region.
The partnership, the company said, also represented a strategic bridge between Africa and the Caribbean as Oando’s involvement in the Refinery will serve as a catalyst for deeper Afro-Caribbean collaboration in the energy sector, paving the way for increased trade, investment, and knowledge exchange.
Again, commenting on the deal, Wale Tinubu, said: “We are honoured by the confidence the Trinidadian government has placed in us with this award. This strategic investment aligns with our long-term vision of expanding into high-potential regions and growing our operational footprint, leveraging our vast technical expertise and global partnerships to finance projects.
“We recognise the significance of this opportunity and look forward to working with all stakeholders to deliver maximum value for all parties involved.”
Oando in São Tomé and Príncipe
Long before the Angola and Trinidad and Tobago deals, Oando had been actively involved in oil exploration in São Tomé and Príncipe’s Exclusive Economic Zone (EEZ). The region, rich in untapped hydrocarbon resources, has attracted several international oil companies. Oando’s participation in the offshore blocks signified its commitment to growing its upstream operations.
OER holds Oando’s interest in Blocks 5 and 12 in the Exclusive Economic Zone of São Tomé and Príncipe through its 81.5 per cent interest in Equator Exploration Limited (EEL).
At the time, Oando said it was looking forward to the drilling of the Jaca-1 well anticipated at the end of 2021 in Block 6, adjacent to Block 5, stressing that the well will test the presence of a petroleum system in the EEZ and is expected to considerably de-risk Blocks 5 and 12.
The maritime boundaries of São Tomé & Príncipe encompass an area of approximately 160,000 square kilometers. The close proximity of São Tomé & Príncipe’s offshore waters to the proven hydrocarbon systems in the adjacent waters of Nigeria, Cameroon, Equatorial Guinea and Gabon suggests the potential for hydrocarbons, which is further supported by regional seismic data and petroleum seeps seen on the islands, the proponents of the deal said.
Bird’s Eye View
A Chartered Banker and Consultant, Orji Udemezue, believes that the recent moves by Oando were great steps and a show of confidence that Nigerian local companies are beginning to gain international recognition for their technical competence.
Citing last year’s acquisition of NAOC, Udemezue who spoke on a national television, stressed that Oando shareholders are in for a jolly good ride in 2025 and beyond.
“And that means that this company has great power to make wealth in the future, because the assets are huge. Pipelines, oil wells, loading bays and all of those gas plants, and flow stations. Right now, they have also gone downstream to strengthen their capacity to trade, moving to the Caribbean, strengthening the Afro-Caribbean footprints
“ What I see Oando doing is a deliberate step to increase their capacity, not just on one side of the sector, but downstream and upstream. Now, they have settled with the upstream, even though the cash inflow for them will start coming soon. It’s already showing in their results.
“And then now, downstream, by doing this, they’re going to have a very strong synergy with their productive capacity, so there will be an off-taker advantage. They have a refining capacity in Trinidad and Tobago, and they have an upstream capacity down here.
“That way, the confidence people have in them, both in Africa and, in fact, globally, will go up. And before you know it, they will start being invited, because getting to Trinidad and Tobago is just like a contract that would have been given to an American or British company,” Udemezue said.
Noting that the future of the company looks very bright, he advised the investing public that it is the best time to not just hold on to their shares, but also even invest more, recalling that the second batch of Oando’s stock dividend will happen June 30.
“And beyond that, when they finish this issue, the real business is going to start both in Trinidad and Tobago, and, of course, they’re already starting ramping up the asset use in Nigeria. What’s going to happen? All the parameters are looking up. Revenue is going up hugely from their upstream activity, and, of course, profitability is also ramping up,” he argued.
He added: “How do you judge when you want to buy a company’s shares? You look at the future cash inflows. That’s why I’m saying, for investors who have a long-term view, you find that Oando is a stock that will do wonders in the future. So holding on to it will be a great advantage for those who buy right now or who hold on to it,” he posited.
