Afreximbank facilitates $650m for Oando’s Agip Oil acquisition

African Export-Import Bank (Afreximbank) has successfully arranged a $500 million senior and $150 million junior reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited.

The facility was used to finance Oando’s acquisition of the 20 percent participating interest held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria.

The joint venture, with significant oil and gas assets including oil mining licences 60, 61, 62, and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining.

Afreximbank, retained as the mandated lead arranger for the transaction, also served as bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee, while also participating and underwriting $350 million of the facility.

Other participants in the transaction included Indorama Eleme Petrochemicals Limited with $150 million and Mercuria Energy Group with $150 million.
Oando expects the acquisition to significantly enhance its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market.

It also expects the transaction to drive local economic growth by creating jobs, improving infrastructure, and fostering technological advancements in the oil and gas sector.

Leading Oando’s participation at the closing ceremony held in London, United Kingdom, on August 22, 2024, was the Group Chief Executive, Wale Tinubu. He was accompanied by representatives of ENI S.P.A., led by the Group Chief Operating Officer, Guido Brusco, and representatives from Mercuria Energy Group. Afreximbank was represented by Peter Adeshola Olowononi, Head, Client Relations, Anglophone West Africa, and Mrs. Ketiwe Lwando, Manager, Structured Trade & Commodity Finance.

Commenting on the transaction, Executive Vice President of Global Trade Bank at Afreximbank, Haytham Elmaayergi, said that the facility marked a critical step in advancing the bank’s strategy for promoting local content in Africa’s oil and gas sector.

“By supporting the acquisition of key energy assets by an indigenous company like Oando, the bank is fostering economic empowerment, enhancing regional trade, and contributing to the sustainable development of Africa’s natural resources,” he said.

He described the transaction as a significant milestone in Nigeria’s upstream oil and gas sector, saying it underscored the increasing role of local companies in the ownership and operation of critical energy assets, in line with Nigeria’s local content policy, energy security, and economic sovereignty strategy.

Group Chief Executive of Oando, Wale Tinubu, noted: “Today’s announcement is the culmination of ten years of toil, resilience, and an unwavering belief in the realisation of our ambition since the 2014 entry into the Joint Venture via the acquisition of Conoco-Phillips Nigerian Portfolio.

“It is a win for Oando and every indigenous energy player, as we take our destiny in our hands and play a pivotal role in this next phase of the nation’s upstream evolution.”

He said with the firm’s assumption of the role of operator, its immediate focus is on optimising the assets’ immense potential, advancing production, and contributing to its strategic objectives.

“This we will do while prioritising responsible practices and sustainable development, ensuring a balanced approach to our host communities and environmental stewardship, as we complement the nation’s plan to boost production output.

“We thank Afreximbank for its unwavering leadership in bridging the trade finance gap in Africa and ensuring that Oando can consolidate its stake in the Joint Venture via the acquisition of NAOC’s 20 percent stake.” NAOC is a subsidiary of Italian multinational ENI S.P.A.
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade.
For 30 years, the bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa.

A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA.
Working with the AfCFTA Secretariat and the AU, the bank is setting up a $10 billion Adjustment Fund to support countries effectively participating in the AfCFTA.

At the end of December 2023, Afreximbank’s total assets and guarantees stood at over $37.3 billion, and its shareholder funds amounted to $6.1 billion.