Oando's Journey: Growth, Acquisitions, and Controversies

Summary

Sources

thisdaylive.com

Oando, a prominent indigenous energy company based in Nigeria, stands as a leading entity in sub-Saharan Africa’s energy sector. Founded in nineteen ninety-four, Oando has a rich history that dates back even further, originating from ESSO West Africa Incorporated in nineteen fifty-six. Over the decades, the company has undergone significant transformations, culminating in its current status. At the helm of Oando is Wale Tinubu, an influential figure in Nigeria’s energy landscape, serving as the Group Chief Executive Officer. Recently, Oando has been under the spotlight due to controversies and public narratives that suggest the company has been receiving undue favoritism. Much of this speculation is tied to Wale Tinubu’s familial relationship with Nigerian President Bola Tinubu. Allegations have surfaced, particularly concerning Oando’s acquisitions, such as the Nigerian Agip Oil Company, with accusations that these deals have been facilitated by political connections rather than merit. However, a closer examination of the company’s history and operations reveals a different picture. The evolution of Oando spans nearly thirty years, marked by a series of strategic acquisitions and growth. These achievements predate the current administration, highlighting that Oando’s success is not solely a product of recent political dynamics. The Nigerian Upstream Petroleum Regulatory Commission has also clarified that Oando’s acquisition of NAOC followed due process and complied with existing regulations. This regulatory body emphasized that the approval process was thorough and consistent with the Petroleum Industry Act of twenty twenty-one. Furthermore, accusations from political figures like former Vice President Atiku Abubakar, who claimed there were underhand dealings involving the national oil company’s acquisition of OVH, have been refuted. Oando had fully divested its equity in OVH by twenty nineteen, well before any purported political influence could have taken effect. Wale Tinubu’s leadership and strategic vision have been pivotal in steering Oando through various phases of growth. His background in law and international business, combined with a robust track record in the energy sector, underscores his capability and the company’s sustained success. As Oando continues to expand its portfolio and focus on renewable energy, the narrative of favoritism seems increasingly detached from the tangible progress and regulatory compliance demonstrated by the company. Tracing its roots back to nineteen fifty-six, Oando began as ESSO West Africa Incorporated, a petroleum marketing subsidiary of Exxon Corporation. In nineteen seventy-six, the Federal Government of Nigeria acquired ESSO, rebranding it as Unipetrol Nigeria Limited. This acquisition marked the beginning of Oando’s transformative journey in the Nigerian energy sector. The pivotal moment came in the year two thousand, when Ocean and Oil Holdings, co-founded by Wale Tinubu, acquired a thirty percent controlling interest in Unipetrol. This stake was increased to forty-two percent in two thousand and one. The following year, Ocean and Oil Holdings acquired a sixty percent stake in Agip Nigeria Plc. The merger of Unipetrol and Agip Nigeria in two thousand and three resulted in the formation of Oando. Over the next decade, Oando expanded significantly, establishing itself as the largest indigenous integrated energy company in sub-Saharan Africa. Oando Marketing Limited emerged as one of the largest downstream petroleum marketing companies in Nigeria, with over five hundred retail outlets across Nigeria, Ghana, and Togo. In two thousand and four, Oando Supply and Trading Limited was incorporated, becoming one of the largest independent traders of crude and refined petroleum products in the region. That same year, Oando Gas and Power Limited was established, pioneering the development of Nigeria’s foremost gas distribution network. This network spans two hundred sixty-four kilometers and serves over one hundred fifty industrial and commercial customers in Lagos, Calabar, and Port Harcourt. Additionally, Oando Energy Services Limited, incorporated in two thousand and five, became Nigeria’s largest indigenous oilfield services provider, boasting a fleet of five rigs. Oando’s foray into the upstream sector began in two thousand and four with the acquisition of a forty-two point seven five percent interest in the marginal field, Oil Mining Licence fifty-six. This was followed by the acquisition of a fifteen percent stake in Oil Mining Licences one twenty-five and one thirty-four in two thousand and seven. In two thousand and eight, Oando acquired a thirty percent interest in the Akepo marginal field, Oil Mining Licence ninety. The following year, the company acquired an eighty-one point five percent interest in Equator Exploration Limited. In two thousand and twelve, Oando was awarded a one hundred percent interest in blocks in the Sao Tome Exclusive Economic Zone. A significant milestone was achieved in twenty fourteen with the acquisition of ConocoPhillips Nigerian assets for one point eight billion dollars. This acquisition secured a twenty percent interest in the Nigerian Agip Oil Company Joint Venture, augmenting Oando’s total net two P reserves to five hundred three million barrels of oil equivalent and peak net production levels of forty-five thousand barrels of oil equivalent per day. In two thousand and sixteen, Oando strategically divested from its naira-earning businesses to focus on its dollar-earning portfolio. This divestment included the phased sale of its downstream interests between two thousand and sixteen and two thousand and nineteen, and its midstream stake in two thousand and seventeen. In twenty twenty-one, Oando Clean Energy Limited was established to design and deliver clean energy projects. This initiative aligns with Nigeria’s energy requirements and the United Nations’ Race to Net Zero. A notable project under this initiative is the replacement of Lagos state’s mass transit bus system with electric mass transit buses. By May twenty twenty-three, Oando had rolled out two electric buses, with plans to secure five hundred fifty-two buses by the end of the year. In August twenty twenty-four, a decade after acquiring ConocoPhillips Nigerian assets, Oando completed the acquisition of one hundred percent of Eni’s interest in the Nigerian Agip Oil Company. This acquisition increased Oando’s stake in the Joint Venture from twenty percent to forty percent, securing operatorship of the Joint Venture and doubling its two P reserves to nine hundred ninety-six point two million barrels of oil equivalent. This acquisition also expanded Oando’s exploratory asset base portfolio. Today, Oando’s strategic focus is on expanding its dollar-earning portfolio and positioning itself for the energy transition through the development of its renewable energy business. This significant milestone underscores Oando’s commitment to leading and operating oil and gas assets previously dominated by International Oil Companies in Nigeria. Oandos major acquisitions have played a pivotal role in its growth trajectory, with two transactions standing out prominently. In twenty fourteen, Oando made headlines with the one point eight billion dollar purchase of ConocoPhillips Nigerian assets. This acquisition significantly bolstered Oandos upstream operations, securing a twenty percent interest in the Nigerian Agip Oil Company Joint Venture. This move augmented Oando’s total net two P reserves to five hundred three million barrels of oil equivalent and increased peak net production levels to forty-five thousand barrels of oil equivalent per day. A decade later, in August twenty twenty-four, Oando completed another landmark acquisition, purchasing one hundred percent of Eni’s interest in the Nigerian Agip Oil Company for seven hundred eighty-three million dollars. This acquisition increased Oando’s stake in the Joint Venture from twenty percent to forty percent, securing operatorship of the Joint Venture and doubling its two P reserves to nine hundred ninety-six point two million barrels of oil equivalent. This strategic move further expanded Oando’s exploratory asset base portfolio and underscored its commitment to leading the Nigerian energy sector. However, these significant acquisitions have not been without controversy. Accusations of underhand dealings and favoritism have surfaced, particularly from political figures such as former Vice President Atiku Abubakar. In August, Atiku alleged that President Bola Tinubu and his nephew Wale Tinubu had engaged in underhand dealings in the national oil company’s acquisition of OVH. He claimed that the retention of Mr. Mele Kyari as the Group Chief Executive Officer of NNPC was a compensation for the alleged acquisition of NNPC Retail Limited by OVH, in which he alleged Wale Tinubu held a forty-nine percent stake. Atiku further challenged the government to clarify how Oando allegedly received accelerated approval to acquire the onshore assets of the Nigerian Agip Oil Company. These allegations have been met with firm denials and clarifications. The Nigerian Upstream Petroleum Regulatory Commission, in an explanatory note, stated that the approval of the divestment deal between Oando and the Nigerian Agip Oil Company followed due process and complied with existing regulations. The commission emphasized that its evaluation and due diligence process were thorough and consistent with the Petroleum Industry Act of twenty twenty-one. The NNPC also refuted the claims regarding the OVH acquisition. In a statement, the NNPC clarified that Oando had fully divested its equity in OVH by twenty nineteen, well before any purported political influence could have taken effect. The NNPC stressed that neither Wale Tinubu nor President Bola Tinubu had any interest in the OVH acquisition. The divestment processes and approvals for these acquisitions were meticulously overseen by regulatory bodies to ensure compliance with legal requirements and the strategic importance of these transactions for Oandos growth and Nigerias energy sector. The Nigerian Upstream Petroleum Regulatory Commission provided a detailed account of how the Oando deal was approved and explained the delays in other transactions, such as the Seplat-Mobil deal, which Atiku specifically mentioned. The commission highlighted that the Seplat-Mobil divestment was undergoing the same consent approval process and was expected to be completed within the one hundred twenty-day timeline provided by the Petroleum Industry Act. The delay was attributed to Mobil Producing Nigeria Unlimiteds failure to obtain a waiver of pre-emption rights and the consent of NNPC, its partner on the blocks to the divestment. Overall, the strategic acquisitions made by Oando have been crucial for its expansion and dominance in the Nigerian energy sector. Despite the controversies and allegations, the regulatory bodies have consistently emphasized the compliance and thoroughness of the approval processes, reinforcing the legitimacy and strategic importance of these transactions. These acquisitions not only enhance Oandos operational capabilities but also position it as a leading player in Nigeria’s energy transition and the broader sub-Saharan African market.