How Afreximbank helped Oando to Acquire 20% of Agip
The African Export-Import Bank (Afreximbank) (www.Afreximbank.com) has successfully facilitated a senior lending facility of US$500 million and a junior lending facility of US$150 million, both reserve-based, for Oando Petroleum and Natural Gas Company Limited. This financing was allocated for Oando’s acquisition of the 20 percent participating interest owned by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria.
This joint venture possesses substantial oil and gas assets, including oil mining licenses 60, 61, 62, and 63, and has yielded 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with remaining reserves of 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas.
Afreximbank acted as the mandated lead arranger for this transaction, also fulfilling roles as bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee, while underwriting US$350 million of the total facility.
Additionally, Indorama Eleme Petrochemicals Limited and Mercuria Energy Group participated in the transaction, each contributing US$150 million.
Oando anticipates that this acquisition will significantly increase its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, thereby enhancing Nigeria’s oil output and strengthening the nation’s position in the global energy landscape. The company also expects this transaction to stimulate local economic development by generating employment, enhancing infrastructure, and promoting technological progress within the oil and gas industry.
Mr. Wale Tinubu CON, the Group Chief Executive, led Oando’s participation at the closing ceremony held in London, United Kingdom, on August 22, 2024. He was joined by representatives from ENI S.P.A., headed by Guido Brusco, Group Chief Operating Officer, as well as delegates from Mercuria Energy Group. Afreximbank was represented by Mr. Peter Adeshola Olowononi, Head of Client Relations for Anglophone West Africa, and Mrs. Ketiwe Lwando, Manager of Structured Trade & Commodity Finance.
In his remarks regarding the transaction, Mr. Haytham Elmaayergi, Executive Vice President of Global Trade Bank at Afreximbank, stated that the facility represents a pivotal advancement in the Bank’s strategy to promote local content within Africa’s oil and gas industry.
“By facilitating the acquisition of essential energy assets by a domestic company such as Oando, the Bank is promoting economic empowerment, boosting regional trade, and contributing to the sustainable development of Africa’s natural resources,” he remarked.
He characterized the transaction as a notable achievement in Nigeria’s upstream oil and gas sector, emphasizing the growing importance of local enterprises in the ownership and management of vital energy assets, in alignment with Nigeria’s local content policy, energy security, and economic sovereignty initiatives.
Mr. Wale Tinubu CON, Group Chief Executive of OANDO, remarked: “The announcement made today represents the culmination of a decade of hard work, perseverance, and a steadfast commitment to realizing our vision since we entered the Joint Venture in 2014 through the acquisition of Conoco-Philips’ Nigerian Portfolio. This achievement is a significant victory for Oando and all local energy stakeholders, as we take control of our future and play a crucial role in the upcoming phase of the nation’s upstream development.
As we step into the operator role, our primary objective will be to maximize the substantial potential of these assets, enhance production, and align with our strategic goals. We are committed to doing this while emphasizing responsible practices and sustainable development, ensuring a balanced relationship with our host communities and environmental stewardship, thereby supporting the nation’s initiative to increase production output.
We extend our gratitude to Afreximbank for its steadfast leadership in addressing the trade finance challenges in Africa, which has enabled Oando to solidify its position in the Joint Venture through the acquisition of a 20% stake in NAOC.” NAOC is a subsidiary of the Italian multinational ENI S.P.A.
