Afreximbank’S Role In Facilitating $650M Financing For Oando’S Acquisition Of Naoc’S 20% Interest In Nigerian Jv

Afreximbank, the African Export-Import Bank, has announced the successful arrangement of a senior $500 million and a junior $150 million reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited. The facility was utilized to finance Oando’s acquisition of the 20% participating interest held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria.

According to a statement from Afreximbank, the joint venture holds significant oil and gas assets, including oil mining licenses 60, 61, 62, and 63. These licenses have produced a total of 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date. There are still 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining. Afreximbank, which was appointed as the mandated lead arranger for the transaction, also served as the bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee. Additionally, Afreximbank participated and underwrote $350 million of the facility.

The transaction also involved the participation of Indorama Eleme Petrochemicals Limited, with a contribution of $150 million, and Mercuria Energy Group, with a contribution of $150 million. Oando expects that this acquisition will significantly enhance its production capacity to 60,000 barrels of oil equivalent per day (kboe/day), a substantial increase from the current 20,000 kboe/day. This will effectively boost Nigeria’s oil output and strengthen the country’s position in the global energy market. Furthermore, the transaction is expected to drive local economic growth by creating job opportunities, improving infrastructure, and fostering technological advancements in the oil and gas sector.

The closing ceremony for the transaction took place in London on August 24, 2024, with Oando’s Group Chief Executive, Mr. Wale Tinubu, leading the company’s participation. Representatives from ENI S.P.A., led by Guido Brusco, Group Chief Operating Officer, and Mercuria Energy Group were also present. Afreximbank was represented by Mr. Peter Adeshola Olowononi, Head, Client Relations, Anglophone West Africa, and Mrs. Ketiwe Lwando, Manager Structured Trade & Commodity Finance.

Mr. Haytham Elmaayergi, Executive Vice President of Global Trade Bank at Afreximbank, commented on the significance of the facility in advancing the bank’s strategy to promote local content in Africa’s oil and gas sector. He stated that by supporting the acquisition of key energy assets by indigenous companies like Oando, the bank is fostering economic empowerment, enhancing regional trade, and contributing to the sustainable development of Africa’s natural resources.

Wale Tinubu, Group Chief Executive of Oando, expressed his satisfaction with the announcement, highlighting the company’s ten years of effort and resilience since the 2014 entry into the Joint Venture. He emphasized the importance of indigenous energy players taking a more significant role in Nigeria’s upstream oil and gas sector and contributing to the nation’s energy security and economic sovereignty strategy. Tinubu also outlined Oando’s focus on optimizing the acquired assets, advancing production, and ensuring responsible practices and sustainable development in host communities and environmental stewardship.

He thanked Afreximbank for their leadership in bridging the trade finance gap in Africa and enabling Oando to consolidate its stake in the Joint Venture through the acquisition of NAOC’s 20% stake.