Afreximbank Arranges $650m Financing for Oando’s Acquisition of NAOC Stake in Nigerian JV

African Export-Import Bank (Afreximbank) on Friday, announced that it successfully arranged a senior $500-million and a junior $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.

A statement from the multilateral agency explained that the joint venture, with significant oil and gas assets, including oil mining licenses 60, 61, 62 and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining.

Afreximbank, retained as mandated lead arranger for the transaction, also served as bookrunner, coordinator, underwriter, escrow agent, facility agent and security trustee, and also participated and underwrote US$350 million of the facility.

Also participating in the transaction were Indorama Eleme Petrochemicals Limited, with US$150 million, and Mercuria Energy Group, with US$150 million.

Oando expects the acquisition to significantly enhance its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market. It also expects the transaction to drive local economic growth by creating jobs, improving infrastructure and fostering technological advancements in the oil and gas sector.

According to the statement, leading the Oando participation at the closing ceremony held in London, on August 24, 2024 was the company’s Group Chief Executive, Mr. Wale Tinubu.

He was accompanied by representatives of ENI S.P.A. led by Guido Brusco, Group Chief Operating Officer  and representatives from Mercuria Energy Group. Afreximbank was represented by Mr. Peter Adeshola Olowononi, Head, Client Relations, Anglophone West Africa and Mrs Ketiwe Lwando, Manager Structured Trade & Commodity Finance.

Commenting on the transaction, Executive Vice President, Global Trade Bank, Afreximbank, Mr. Haytham Elmaayergi, said the facility marked a critical step in advancing the Bank’s strategy for promoting local content in Africa’s oil and gas sector.

“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,” he said.

He described the transaction as a significant milestone in Nigeria’s upstream oil and gas sector, saying that it underscored the increasing role of local companies in the ownership and operation of critical energy assets, in line with Nigeria’s local content policy, energy security and economic sovereignty strategy.

For his part, Tinubu noted: “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. This we will do while prioritizing responsible practices and sustainable development in ensuring a balanced approach to our host communities, and environmental stewardship as we complement the nation’s plan to boost production output.

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 20 per cent stake.”

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