Oando Plc says its oil production has grown by 40 per cent since it acquired the Nigerian Agip Oil Company.
Oando, in a statement announcing its unaudited report for the nine months ended September 30, 2024, revealed that it increased production from 22,000 barrels of oil equivalent per day to 30,675 boed after the NAOC deal was ratified in August.
According to the Group Chief Executive of Oando, Wale Tinubu, quick-win strategies were deployed after the acquisition to enhance operational efficiencies.
He said, “Since the acquisition of Nigerian Agip Oil Company, we have increased production by 40 per cent, growing from 22,000 boepd pre-acquisition to 30,675 boepd currently. This progress has been driven by the deployment of quick-win strategies that have enhanced operational efficiencies and demonstrated the transformative potential of the acquisition.
“The integration process is advancing smoothly, and our immediate focus remains on executing strategic initiatives to maximise the value of our expanded portfolio. With this stronger foundation and a clear roadmap for growth, we are confident in our ability to deliver long-term, sustainable value to all stakeholders. “
In August, Oando announced the successful complete acquisition of 100 per cent of the shareholding interest in the Nigerian Agip Oil Company from the Italian energy company, Eni, for a total consideration of $783m, describing the acquisition as a significant milestone in its long-term strategy to expand its upstream operations and strengthen its position in the Nigerian oil and gas sector.
The transaction increased Oando’s current participating interests in OMLs 60, 61, 62, and 63 from 20 per cent to 40 per cent.
It increases Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure, which include 40 discovered oil and gas fields, of which 24 were producing as of August, approximately 40 identified prospects and leads, 12 production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the Kwale-Okpai phases 1 & 2 power plants (with a total nameplate capacity of 960 MW), and associated infrastructure.
Oando added that based on 2022 reserves estimates, “Oando’s total reserves stand at 505.6 MMboe, and the transaction will deliver a 98 per cent increase of 493.6 MMboe, bringing the total reserves to 1 billion barrels of equivalent.”
However, in its latest report, the energy firm stated that crude production dipped in the first nine months of 2024, blaming it on oil thieves and vandals.
During the period, average production was said to stand at 20,560 barrels of oil equivalent per day, compared to 21,529 boe/day in 2023.
“In 2024, production consisted of 6,525 barrels/day of crude oil, 254 bbl/day of natural gas liquids, and 13,782 boe/day of natural gas. The production decrease was a result of increased shut-in wells for repairs from sabotage and theft-related activities, “the statement read.
Meanwhile, during the nine months, the group disclosed that it incurred $12.7m in capital expenditure related to the development of oil and gas assets and exploration and evaluation activities, compared to $47.4m in the nine months.
It noted that its performance for the period reflected its resilience and unwavering focus on delivering value amidst a challenging operating environment.
“We achieved a 36 per cent increase in revenue to N3.2tn and a profit after tax of N76.3bn, despite ongoing pipeline vandalism, sabotage, theft in the Niger Delta, and foreign exchange volatility,” the statement read partly.
The company added that the 36 per cent increase in revenue was impacted by exchange rate translations and higher crude oil volumes lifted, offset by lower trading volumes, reduced natural gas and NGL volumes, and lower realised sale prices for natural gas and NGLs.