By Dipo Olowookere
The management of Oando Plc, an indigenous energy company in the country, has promised to look into driving profitability by pursuing production growth initiatives through strategic alliances.
This assurance was given in a statement issued by the firm, while commenting on its performance in the first half of 2019.
In the statement, Oando noted that for most of this year, prices of oil at the global maret have averaged at $65 per barrel.
It said, “We shall continue employing price protection strategy by hedging our production.
“Our focus will be largely on driving profitability via growth in our upstream business where we will pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence.
“We will also continue to work with our partners to achieve cost optimization on our Joint Venture operations, ensuring the gains from higher revenues are not lost to increasing operating costs.
Group Chief Executive of Oando PLC, Mr Wale Tinubu, who was quoted in the statement, said, “Half year 2019 was a positive period for us as we achieved strong top and bottom line earnings despite our overall performance being tempered by a one-off N14 billion charge.
“Our crude oil and natural gas production grew by 15 percent and 8 percent respectively compared to the similar period last year while we also achieved a significant reduction in our Reserve Based Lending facility to approximately $0.4 million from$450 million at inception, -a 99 percent reduction.
“We also concluded the divestment of our residual interest in Axxela for $41.5 million, in line with our strategy of divesting from non-strategic assets and remain on track to deliver on all our initiatives for the year.
“Looking ahead, our focus will be on achieving further growth and profitability by delivering on our production growth initiatives through strategic alliances and partnerships.”
Business Post reports that in the period under review, Oando increased its production by 8 percent at 40,873boe/day, compared with 37,814boe/day in the same period of 2018.
Oil production in particular increased by 15 percent from 14,675 bbls/day in H1 2018 to 16,876 bbls/day in H1 2019, whilst natural gas production increased by 8 percent from 118,866mcf/day in H1 2018 to 128,533 mcf/day in H1 2019.
Capital expenditure of $62.3 million (N22.5 billion) was incurred in the six months of 2019 compared to $24.7 million (N8.9 billion) in same period in 2018. This consists of $59.7 million (N21.6billion) at OMLs 60 to 63, $1.9million (N686.2 million) at OML 56, $0.04 million (N14 4 million) at OML 13, and $0.8 million (N288.9 million) on other assets.
Adedapo Adesanya