Nigerian energy giant Oando PLC has delivered a robust financial performance for 2024, reporting a staggering NGN 4.1 trillion ($2.61 billion) in revenue. This impressive figure represents a 44 percent surge, primarily propelled by the strategic acquisition of Nigerian Agip Oil Co. (NAOC) from Eni SpA, which contributed approximately four months of operational results in the latter part of the year.
The successful integration of NAOC marks a pivotal moment for Oando, culminating a decade of strategic expansion aimed at fortifying its upstream portfolio. This landmark transaction has not only significantly deepened the company’s asset base but also positioned Oando as the operator of the crucial OML 60-63 series. Furthermore, the acquisition effectively doubled Oando’s working interest in these assets from 20 percent to 40 percent and expanded its 2P reserves dramatically, from 500 million barrels of oil equivalent (boe) to a substantial 1 billion boe.
Wale Tinubu, Oando’s chief executive, underscored the transformative nature of the deal. “2024 proved to be a defining year for Oando,” Tinubu stated. “The successful acquisition and seamless integration of NAOC represent the pinnacle of our decade-long strategic growth trajectory. This move has fundamentally enhanced our upstream capabilities, granting us operatorship of the OML 60-63 series and doubling our equity stake in these vital assets, alongside a significant boost to our proven and probable reserves.”
Financial and Operational Highlights Unpacked
Beyond the revenue triumph, Oando reported a remarkable 267 percent increase in profit after tax, reaching NGN 220 billion. This strong profitability underscores the immediate financial benefits derived from the NAOC acquisition and improved operational efficiencies. In a clear signal of confidence to its shareholders, the board approved a dividend payout totaling NGN 1.28 billion.
Operationally, Oando’s production figures for 2024 reflected a mixed but generally positive trend. The company achieved an average daily production of nearly 24,000 boed, a three percent increase over 2023. Crude oil output saw a significant rise of 22 percent, reaching over 7,500 barrels per day (bpd). Natural Gas Liquids (NGLs) also experienced healthy growth, climbing 35 percent to 156 bpd. However, natural gas production witnessed a five percent decline, settling at just over 16,000 boed for the year.
In its trading segment, Oando handled 20.7 million barrels of crude, a 37 percent reduction attributed to a “market realignment.” Refined product volumes saw a more substantial decline, plummeting 64 percent to nearly 600,000 metric tons, a shift the company attributed to changes within Nigeria’s domestic supply framework. Despite these trading adjustments, the overall financial picture painted a compelling narrative of growth driven by upstream expansion.
Charting the Course: 2025 Outlook and Long-Term Vision
Looking ahead, Oando has set ambitious targets for 2025, signaling continued aggressive growth. The company anticipates producing between 30,000 and 40,000 boed. In its trading division, crude volumes are projected to range from 25 million to 35 million barrels, while refined product volumes are expected to recover, reaching 750,000 to one million metric tons.
Tinubu outlined the strategic imperatives for the upcoming year, emphasizing a multi-faceted approach to maximize value and mitigate risks. “Our core priorities will revolve around unlocking the inherent synergies from this acquisition,” he explained. “We are also committed to addressing persistent above-ground security risks through the implementation of an enhanced security framework designed to curb oil theft. Furthermore, cost optimization, balance sheet restructuring, improving operational efficiency, and leveraging cutting-edge technology to boost productivity across all our operations will be paramount.”
Oando’s long-term vision is even more expansive, targeting a substantial increase in production to 100,000 bopd and 1.5 trillion cubic feet (tcf) of gas by 2029. To achieve these ambitious goals, the company plans a dual-track strategy encompassing “rig-less interventions and well workovers, complemented by an aggressive drilling program.” This comprehensive approach underscores Oando’s commitment to unlocking the full potential of its expanded asset base.
The Transformative NAOC Acquisition: A Closer Look
The acquisition of NAOC from Italy’s state-backed Eni, finalized in August 2024 for nearly $800 million, represents a watershed moment for Oando. Prior to the deal, NAOC operated Oil Mining Licenses (OMLs) 60, 61, 62, and 63 within the Niger Delta through a joint venture, where both NAOC and Oando held a 20 percent stake alongside the Nigeria National Petroleum Co. Ltd. (NNPC). With this acquisition, Oando has effectively doubled its interest in these four critical licenses to 40 percent.
The significance of NAOC’s contribution to Oando’s portfolio is further highlighted by its historical production capacity; NAOC previously contributed approximately 40,000 boed to Eni’s overall production. Beyond the producing OMLs, the acquisition also encompassed NAOC’s operating stakes of 48 percent and 90 percent in exploration leases 135 and 282, respectively, offering significant future growth potential.
With this expanded footprint, Oando now operates a formidable portfolio comprising 40 discovered oil and gas fields, 24 of which are currently in production. Its infrastructure network includes over 1,250 kilometers (776.71 miles) of pipelines, alongside multiple critical facilities that underpin its enhanced operational capabilities. This strategic consolidation firmly establishes Oando as a dominant player in Nigeria’s upstream energy sector, poised for sustained growth and value creation for its investors.
