Economy
Oando Grows PAT by 405% in FY 2017 Despite Issues with Shareholders, SEC
By Modupe Gbadeyanka
**Profits Rises 405% to N19.8b
Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, Oando Plc, last week announced its audited results for the 12 months period ended December 31, 2017.
In the company’s earnings, gross profit increased by 81 percent, N88.1 billion compared to N48.6 billion in 2016, while the Profit-After-Tax increased by 405 percent, N19.8 billion compared to N3.9 billion two years ago.
However, the firm’s turnover decreased by 13 percent to N497.6 billion from N569.2 billion a year earlier, while the net debt reduced by 6 percent from N1 billion to N230.6 billion in 2016.
It was revealed that the group’s upstream arm, Oando Energy Resources (OER), recorded a 8 percent decrease in total production to 14.7MMboe (average 40,188 boe/day) from 15.9MMboe (average 43,503 boe/day) in comparative period of 2016.
OER realised a net profit of N26.7 billion ($86.1 million) compared with N91.83million ($0.33 million) in the comparative period of 2016.
During the period under review, the firm maintained 2P Reserves of 470.7mmboe due to good reservoir management practices and also concluded the sale of interests in OMLs 125 and 134 to the Operators for cash proceeds of N1.7 billion ($5.5m) and the assumption of N26.2 billion ($84.5m) in cash call liabilities due to the joint ventures.
Furthermore, OER recorded an average production of 40,188 boe/day in the 12 months ended December 31, 2017 compared to 43,503 boe/day in the comparative period of 2016. This was primarily due to significant reductions in gas production and delivery caused by including the rupturing of Gas Transmission System (GTS-4) gas line, pipeline and terminal constraints at OML 60 to 63. The Sale of OML 125 & 134 also contributed to reduced total production for FY 2017.
Also, OER recorded a net profit of N26.33 billion ($86.1 million) compared with N91.83million ($0.3 million) in the comparative period of 2016. The increase in profitability was primarily due to improved revenue between the periods, income from the sale of OML 125 & 134, lower production expenses, increase in gains on financial instruments which were offset by lower tax recoveries.
For its midstream:, its affiliate, Axxela, achieved an 11 percent increase in natural gas deliveries and the Greater Lagos IV pipeline network was completed.
An additional six customers were added to the Greater Lagos IV pipeline network bringing the total number of customers to 175.
Also, during the period, the company completed the Central Horizon Expansion Pipeline in Port Harcourt as well as the Tincan HDD project.
Axxela recorded an 11 percent increase in natural gas deliveries in 2017. This achievement was in spite of restricted gas supply in H1 2017 due to the sabotage of upstream gas supply facilities by militants.
The construction of Phase IV of the pipeline network in the Greater Lagos Industrial Area and the Central Horizon Expansion Pipeline in Port Harcourt were successfully completed. These projects expanded the firm’s distribution infrastructure and enabled it reach a wider demand area for delivery of gas. Consequently, six (6) additional customers were connected to the pipeline network. The Tincan HDD project was successfully concluded; a project which involved restoring leakages at a pipeline that has 2 river crossings so as to reconnect existing customers to the network.
Axxela continued to maintain its Quality Management System Certification and recertified its ISO quality accreditation to the most up to date standards – ISO 9001:2015 (Quality Management Standard) and ISO 14001:2015 (Environmental Standard). These standards were successfully merged with OHSAS 18001 (Occupational Health and Safety) creating an Integrated Management System. The business achieved 3.1 million man-hours without a Lost Time Incident (LTI), a testament to its commitment to safe operational practices and continued alignment to global standards.
For its downstream, Oando Trading (OTD), it recorded a 9 percent increase in traded volumes of crude oil and over 15 million barrels of Crude Oil traded, with an additional 833,000 MT of Refined Petroleum Products.
Also, OTD sustained growth in its Crude Oil business resulting in a 9 percent increase in traded volumes just as the trading Revenues remained relatively stable at N391 billion ($1.26 billion), primarily driven by growth in Crude Oil activity.
The first half of 2017 saw Nigeria experience its worst foreign exchange crisis and a recession that was exacerbated by low crude oil prices and a decline in oil production as a result of vandalism. By the end of June, the economy had moved out of a recession and benefitted from being excluded from the OPEC’s oil production cuts, boosting performance in the oil and gas sector which is still the mainstay of the economy. The Government’s efforts to further improve the sector led to the approval of the Petroleum Industry Governance and Institutional Framework Bill (PIGB); the anticipated fall out of the PIGB being a more efficiently regulated oil and gas industry and conducive business environment for sector players. Despite a rocky start, the year ended on a firmer and more positive note. On the global front, 2017 was another volatile year for oil markets, with prices finally appearing on track to a sustainable recovery after several false starts. A slew of positive developments bolstered confidence in crude with the year ending with prices reaching just over $60 per barrel. The outlook for 2018 remains positive with the continued upturn in oil prices and the Nigerian economy forecasted to grow.
Commenting on the results, Group Chief Executive, Oando Plc, Mr Wale Tinubu, stated that, “2017 was an important and positive milestone for the company.
“The business recorded a year-end profit of N19.8 billion; a culmination of 4 consecutive quarters of positive results, validating our promise to shareholders of returning to and maintaining profitability.
“This comes in the wake of oil prices on an upward trajectory, an improved operating environment, the exit of a 13 month long recession and most importantly the continued strengthening of our business model through the effective implementation of our strategic initiatives of growth through our dollar earning upstream portfolio; deleverage through asset divestments and the expansion of our oil export trading business.
“Against this backdrop we experienced challenges; the most significant being the Securities and Exchange Commission’s (SEC) investigation into the company which led to the technical suspension of free trading of our shares on the Nigerian and Johannesburg Stock Exchanges and the instituting of a forensic audit; we have and continue to provide full support to the SEC and are hopeful of a smooth and speedy conclusion.
“We have commenced 2018 buoyed by our unrelenting commitment to our strategy and remain confident in its success.”
By Aduragbemi Omiyale
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) for the Nigerian private sector in July 2026 contracted to 52.5 points from 53.4 points in June 2026, a statement made available to Business Post has shown.
This occurred despite the business environment sustaining its growth last month, with an increase in new orders experienced, as inflationary pressures softened, and output and employment modestly rising.
The Head of Equity Research West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said the PMI indicated that the private sector recorded its slowest since March 2026, as businesses also increased their input purchasing activity to keep up with current demand requirements and prepare for future workloads.
“Nigerian businesses reported improved customer demand in July while better pricing and new product launches also helped them to capture new orders arising from the increase in demand. These factors helped to keep the private sector activity in an expansionary territory, although this moderated when compared to June,” he was quoted as saying.
It was stated that while input costs increased at their slowest pace in five months, panellists reported higher costs for fuel and raw materials. Selling prices also softened in line with the picture for input costs in July.
Headline inflation eased slightly to 15.91 per cent y/y in June from 15.93 per cent y/y in May, snapping three consecutive months of price increases.
Although July inflation is likely to be higher m/m, it is expected to print lower, likely at 15.72 per cent y/y, primarily driven by favourable base effects from the corresponding period of last year, because there are no expectations of the magnitude of m/m inflation witnessed in July 2025 (1.99 per cent) to materialise this year.
“We retain our 2026 growth forecasts at 4.1 per cent as we see the oil sector growing by 3.45 per cent y/y in 2026, from 8.50 per cent y/y in 2025, while the non-oil sector is likely to grow by 4.11 per cent y/y, from 3.71 per cent y/y in 2025.
“The risks to our outlook include country-wide insecurity which may constrain food production, exchange rate pressures resurfacing, extreme-weather related conditions and higher fertiliser prices impacting crop yield, and a volatile global environment which may affect sentiment and constrain capital flows,” Mr Oni noted.
By Adedapo Adesanya
Sahara Upstream, a Nigeria-focused crude producer, has deployed a new 380,000-barrel tanker to boost exports from the OML 18 block as part of a wider push by domestic operators to invest in infrastructure and lift output and exports for Africa’s biggest oil producer.
The MT D Adesanya, which can hold more than 62,000 cubic metres of crude, will operate alongside the MT D Bayero, receiving crude from shuttle vessels at Bonny Anchorage, one of Nigeria’s main crude export hubs, before transferring it to the FSO Cawthorne storage facility.
Sahara said the tanker would help cut turnaround times, currently about 30 to 48 hours, and support a planned 50 per cent increase in exports from the block’s current level of about 950,000 barrels per month.
The block currently produces about 36,000 barrels per day, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), with Sahara targeting output of 60,000 barrels per day.
OML 18 is one of the Niger Delta’s oldest producing assets. It began production in 1970 and contains an estimated 1.5 billion barrels of oil equivalent in reserves.
Shell, Total and Eni sold their combined interests to Eroton in 2015 as part of a broader shift toward domestic ownership in Nigeria’s upstream sector.
This development comes as Sahara Upstream is deepening its exploration and production footprint through Asharami Energy Limited (AEL), its upstream E&P business, which says it is targeting 350,000 barrels of oil per day by 2030 through its subsidiary, Enageed Resources Limited (ERL).
The growth target comes as AEL also marks a major safety milestone, achieving 6 million Lost Time Injury (LTI)-free man-hours in its OML-148 operations — reinforcing the company’s commitment to operational excellence and safety leadership.
According to Asharami Energy, the milestone reflects its ability to execute complex operations safely, in line with Sahara’s Beyond XXX vision, which builds on the group’s 30-year legacy of responsible enterprise while marking its next chapter of impact, innovation, and sustainable growth.
The developments position Sahara Upstream and its subsidiaries among the domestic operators driving increased investment in Nigeria’s oil and gas infrastructure, as the group works to scale up production and exports for Africa’s biggest oil producer.
By Aduragbemi Omiyale
One of the leading energy firms in Nigeria, Aradel Holdings Plc, has expressed its desire to optimise its enlarged portfolio and improve operational efficiency in the second half of 2026.
The company is planning to build on the success it recorded in the first half of the year, where it grew its revenue by 577 per cent to N2.5 trillion from N368.1 billion in H1 2025.
The significant rise in earnings was driven by higher production volumes together with stronger realised crude oil and gas prices, with the average at $90.4/bbl and $2.08/mmscf, respectively.
In the period under review, the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased by 688 per cent to N1.4 trillion from N176.4 billion in the corresponding period of last year, while the operating profit surged by 789 per cent to N1.1 trillion from N118.6 billion due to higher revenue and crude handling income at N149.8 billion, partly offset by underlift cost and general and administrative costs.
The net cash generated from operations was N975.6 billion between January and June 2026 versus N140.8 billion in the same period of 2025, reflecting the cash generation of the enlarged organisation.
The net debt contracted by 70 per cent on a year-to-date basis to N46.5 billion from N475.1 billion as of December 31, 2025.
Aradel, in the period under consideration, improved its post-tax profit by 30 per cent to N191.0 billion from N146.4 billion, a development that impressed its chief executive, Mr Adegbite Falade, who said, “A firmer price environment supported performance, generating net cash from operating activities of N975.6 billion and a closing cash balance of N1.7 trillion.”
“Our enlarged portfolio provides more opportunities to generate stronger cash flow and returns for shareholders and unlocking that potential is our main focus.
“We reaffirm our full year production guidance of 110 – 140 kboepd and remain committed to operating responsibly in a changing energy landscape and to delivering lasting value for our stakeholders,” he stated.
