Economy
Oando to Double Production to 50,000bpd With Eni Deal
By Adedapo Adesanya
Oando has projected to double its production to 50,000 barrels per day of oil equivalent with the closure of its landmark deal with Eni, which it says is imminent.
This was disclosed by the oil and gas firm’s Chief Operating Officer, Mr Alex Irune, to S&P Global Commodity Insights at the weekend, noting that the firm intends to scale up to 100,000 barrels per day by 2029, thanks to new drilling and security improvements.
The Nigerian company’s bid to buy the Italian major’s entire Nigerian upstream business reflects a major shift in Africa’s biggest oil producer, with local firms replacing departing International Oil Companies (IOCs).
Business Post had reported that the deal had come under scrutiny, including from local workers.
However, Mr Irune disagreed that approvals had been an issue.
“What we are seeing is a careful, considered approach to ensuring that the country isn’t materially impacted in a negative way, ensuring the indigenous players are able to straddle the horse and ride it into the horizon,” he said.
Through the deal, Oando will become one of Nigeria’s biggest domestic producers which is currently “working through the obligations under the Share Purchase Agreement” and is “on track” to close the deal this quarter, Mr Irune said.
The estimated $500 million acquisition covers four oil-producing blocks OMLs 60, 61, 62 and 63, which comprise a joint venture alongside the Brass terminal, onshore exploration concessions and power plants.
Eni currently holds a 20 per cent operating stake in the JV alongside Oando with 20 per cent and state-owned Nigerian National Petroleum Company Limited (NNPC) with 60 per cent.
Oando, which is run by Mr Adewale Tinubu is currently producing 25,000 barrels per day and following the deal, its JV stake will rise to 40 per cent.
Production rises over the next five years will be achieved through drilling programmes on marginal fields, particularly Qua Iboe (OML 13) and Ebendo (OML 56).
“We’ll be drilling four to five wells on these two fields over the next 18 months. Both fields have easy access to export terminals, including the Escravos pipeline system in the case of OML 56,” he emphasised.
The Eni agreement was first signed in September. It follows home-grown Seplat’s battle to take over ExxonMobil’s onshore business.
Meanwhile, Shell has agreed to sell its onshore assets to a consortium of mostly local companies and Equinor has signed a deal to divest its assets to Mauritius-based Chappal Energies.
The trend indicates an IOC exodus from mature African basins and a shift towards frontiers like Namibia and Guyana, less carbon-intensive projects and less risky offshore developments.
This raises questions about Nigeria’s ability to boost the sector that has been plagued by underinvestment, inadequate exploration and the scourge of crude theft in the Niger Delta.
To this effect, Mr Irune insists that local firms were well-equipped to rejuvenate the sector.
“The government is certainly in support of this transition and keen to see indigenous players step into those roles and deliver,” he said. “If you look at the local companies that have stepped forward…there’s no doubt that the indigenous capacity exists,” he added.
Asked about the apparent delays in approvals, Mr Irune added: “Acquisitions of this nature are relatively novel and for the first time the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has set a framework for divestment where there are certain criteria that you must get through to qualify, and that process takes its course.”
At the same time, local ownership could actually reduce theft, which was costing Nigeria 400,000 barrels per day in August 2023, according to the government’s security adviser, by giving communities a bigger stake in the success of the industry.
“My personal opinion is having indigenous players will definitely improve issues around fairness and this need to engage in sabotage and theft,” he said.
He said with this smaller companies can build a more cohesive and collaborative oil sector.
“We’re not going to be ‘siloed’ global companies with headquarters in Houston. Nigeria is our headquarters,” he pointed out.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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