Business A.M
Italian multinational energy company,Eni has announced the sale of its exploration and production subsidiary, Nigerian Agip Oil Co. (NAOC) to Oando PLC, a leading indigenous energy solutions provider.
The sale for an undisclosed sum is in line with Eni’s 2023-26 plan and subject to approval from local and regulatory authorities.
Business A.M understands that the transaction is part of the international oil major’s move to divest onshore assets amid persistent oil thefts and spills,more focused exploration budgets amongst others.
The Nigerian Agip Oil Company, focuses on onshore oil and gas as well as power generation. It has stakes in four onshore blocks, oil mining licences (OMLs),,two onshore exploration leases and two power plants in Nigeria.
Eni, prior to the transaction, was one of the major operators of four OMLs with a 20 per cent stake, Oando has 20 per cent in these areas, with the remaining 60 per cent owned by NNPC E&P, with production going to the Obiafu-Obrikom plant and the Brass terminal.
These four OMLs attributed 24,000 barrels of oil equivalent per day to Eni’s net in 2022.
Eni exports a substantial amount of the gas production from the licences to the Nigeria LNG (NLNG) plant, in which the company has a 10.4 per cent. More of the gas goes to the Okpai plant and another open cycle plant in Rivers State.
Work in the area focuses on workovers to mitigate mature field decline. The companies have also been working on new compressors for the production of gas and cutting flaring.
NAOC also has the Okpai 1 and 2 power plants, with 960 MW of capacity, and two onshore exploration areas, OPL 282 and 135. It has a 90 per cent and 48 per cent stake respectively in these exploration licences.
Following the latest development, Eni said it will maintain its presence in Nigeria with Nigerian Agip Exploration and Agip Energy and Natural Resources, as well as through onshore and offshore assets operated by others. Eni also stated that it will retain NAOC’s 5 per cent interest in Shell’s joint venture Shell Production Development Company.
Commenting on the transaction,Wale Tinubu, Oando group CEO said the deal would unlock unparalleled opportunities for the Nigerian energy company to re-align expectations, enhance efficiency, optimise resource allocation, and significantly increase production. Tinubu also stated that the deal is in alignment with Oando’s strategy of acquiring, enhancing, appraising, and efficiently developing reserves.
Oando said it would gain 40 discovered fields, of which 24 are producing. The transaction also covers 12 production stations, 1,490 km of pipelines and three gas processing plants.
The purchase will also increase Oando’s reserves from 503.3 million barrels of oil equivalent (boe) to 996.2mn boe.
