Oando Plc, a trailblazer in the Nigerian oil and gas industry, has now attained the prestigious status of Nigeria’s first indigenous International Oil Company (IOC) following its operations outside the shores of Nigeria, particularly in the Sao Tome and Principe Exclusive Economic Zone (EEZ). This monumental achievement is a testament to the dedication and vision of the company, led by its Chief Executive Officer, Wale Tinubu, who has been at the forefront of the company’s success in the oil and gas sector for decades.

A Leading African Exploration and Production Powerhouse

As a top African exploration and production company, Oando has cemented its position in the upstream sector, boasting a comprehensive portfolio of oil and gas assets. The company holds over 16 licenses, covering the exploration, development, and production of oil and gas resources across onshore, swamp, and offshore fields.

Oando’s asset base includes oil and gas reserves backed by a Certified Professional Reserves Report (CPR) from DeGolyer and MacNaughton (D&M), the second largest CPR certifier globally. This report, which also audits industry giants like ENI/NAOC, Chevron, and Shell, highlights the company’s extensive capabilities in the oil sector.

Financial Growth and Valuation Surge

Oando’s reserves, based on its 20% Certificate of Proficiency (CoP) stake and its newly acquired NAOC 20% stake, are now valued at an impressive $4 billion before debt deductions. After accounting for the company’s acquisition and legacy debts, Oando’s equity value stands at $3 billion.

Thanks to its dollar-denominated earnings, Oando has effectively mitigated the impact of Nigeria’s high inflation rate, with a differential between U.S. inflation (3%) and Nigeria’s inflation rate (over 30%). The result is a calculated devaluation of 27% for this year, making the company’s investments even more significant in Naira terms.

Expanding Energy Infrastructure

Oando’s ventures extend beyond oil production. With two 500MW power plants in Kwale, three major gas plants, and a dedicated gas line to Eleme Petrochemicals, Oando has become a pivotal gas supplier in Nigeria. The company also owns a pipeline that supplies gas to Liquefied Natural Gas (LNG) operations.

Oando’s peak oil production hit 100,000 barrels per day last year, with 1.5 billion standard cubic feet (scf) of gas produced, making it the largest gas supplier to Eleme Petrochemicals. The company operates over 200 wells and nine flow stations, and it has an export terminal in Brass. These achievements mark Oando as the first indigenous Nigerian company to elevate to the status of a major IOC.

For Oando, success is not only measured in financial gains but also by the legacy of creating a world-class company that opens doors for others. The company consistently delivers value to its stakeholders by growing its oil and gas reserves while acquiring near-term producing assets from international oil companies. 

Moreover, Oando’s investment in talent has played a key role in its rise to prominence. The company nurtures young professionals through an accelerated training and exposure program, equipping them with the skills needed to thrive in the highly competitive oil and gas industry.

Impressive Financial Performance

Oando’s stock delivered a stellar performance in 2023, with a 159% year-to-date gain, which extended into Q1 2024, with a 14% increase in the share price. The company’s 2023 financial results, released on May 31, 2024, showcased a remarkable turnaround with a pre-tax profit of N104.1 billion compared to a pre-tax loss of N61.8 billion in 2022. This momentum gained further strength after the federal government approved Oando’s acquisition of NAOC, propelling its share price to a five-year high of N47.85 and a year-to-date gain of 371.5%, making it the second-best performing stock on the Nigerian Exchange Group (NGX).

Overcoming Challenges and Future Growth

Despite challenges like pipeline vandalism in the Niger Delta, which affected crude production, Oando posted a profit after tax of N74.7 billion in 2023. Wale Tinubu attributed this success to increased trading volumes from strategic global partnerships and foreign exchange gains on the company’s foreign currency-denominated assets.

Looking ahead, the acquisition of NAOC is seen as a transformative decision, with the potential to significantly boost Oando’s production capacity. Tinubu has reiterated the company’s commitment to optimising its newly acquired assets, advancing production, and diversifying into clean energy and energy infrastructure.