By Chukwuma Umeorah
Oando Plc has secured a $375 million Reserve-Based Lending (RBL2) facility in a move toward unlocking the value of its recently acquired assets from the Nigerian Agip Oil Company (NAOC). The refinancing, led by the African Export-Import Bank (Afreximbank) with the support of global energy trader Mercuria, extends the final maturity date of the facility to January 30, 2029.
The successful transaction builds on Oando’s $783 million acquisition of NAOC from Italian energy giant ENI in August 2024. In a notice filed on the Nigerian Exchange, the company notes that “the successful transaction builds on Oando’s $783 million acquisition of NAOC from Italian energy giant ENI in August 2024. That deal significantly expanded the company’s upstream footprint, adding twenty-four producing fields, about forty exploration prospects, twelve production stations, nearly 1,500 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai Phases 1 & 2 power plants with a total capacity of 960MW.”
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The newly upsized facility will provide the financial headroom to fast-track production optimisation, infrastructure upgrades, and enhanced operational efficiencies across the company’s enlarged asset base.
“This working capital facility is a critical enabler towards efficiently extracting and monetising these resources,” said Wale Tinubu, Group Chief Executive, Oando PLC. “We appreciate the continued partnership of Afreximbank and Mercuria, whose unwavering support underscores their alignment with our long-term focus on maximising production, optimising asset performance, and delivering sustainable value to all stakeholders.”
“This upsizing of our RBL2 facility is a strategic milestone that reinforces our commitment as Operator of the Oando-NEPL JV to maximising the value of our expanded asset portfolio,” Tinubu added. “Our Joint Venture holds extensive reserves with the potential to generate over $11 billion in net cash flows to Oando over the assets’ life.”
The financing was made possible by Oando’s substantial deleveraging over the years. Since the original RBL2 facility was signed in 2019 for $525 million, the company has reduced the balance to $100 million by the end of 2024 demonstrating the company’s financial management strategy.
Structured as a Reserve-Based Loan, the facility is secured against Oando’s proven hydrocarbon reserves, which currently stand at 1.0 billion barrels of oil equivalent (Bnboe). This borrowing base supports the company’s ambition to ramp up production to 100,000 barrels of oil per day (bopd) and 1.5 billion cubic feet (Bcf) of gas per day by the end of 2029.
Oando added that the capital injection is expected to fund accelerated drilling campaigns, operational scale-up, and infrastructure improvements that directly align with the company’s long-term growth objectives.
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