Oando to double reserves under deal to buy Eni's onshore Nigerian assets

Nigerian oil producer Oando is to buy Italian Eni's Nigerian division controlling onshore upstream assets in the Niger Delta including a stake in the country's Brass River oil terminal, the companies said Sept. 4.

Eni's Nigerian Agip Oil Company Ltd (NAOC) holds operating interests in four Nigerian onshore blocks (OML 60, 61, 62, 63), the Okpai 1 and 2 power plants with a total nameplate capacity of 960 MW, and two onshore exploration leases. Operating as part of the NAOC JV in partnership with the state's NNPC, and Oando, the deal will see Oando double its stake in NAOC JV to 40%. The assets include 24 producing fields, 40 identified exploration prospects and leads, 12 production stations, 1,490 km of pipelines, three gas processing plants, and the Brass River oil terminal, Oando said.

Last year, the four onshore blocks produced some 24,000 b/d of oil equivalent net to Eni's 20% in the NAOC JV, according to the company, with a large part of the gas reserves of the blocks is destined to supply the Nigeria's NLNG liquefaction plant.

Without giving financial details of the deal, Oando said the deal will almost double its proved total oil and gas reserves which stood at 503 million boe at the end of 2021.

"The synergies created by this acquisition will unlock unparalleled opportunities for us to re-align expectations, enhance efficiency, optimize resource allocation, and significantly increase production. It is in alignment with our strategy of acquiring, enhancing, appraising, and efficiently developing reserves," Oando CEO Wale Tinubu said in a statement.

Retaining offshore, LNG assets

Eni said the sale was consistent with its strategic plan to grow its upstream output an average 3%-4% per year over the next three years from about 1.61 million boe/d in 2022.

"The upstream will supplement the core organically-led growth with inorganic high-grading activity, adding resources with incremental value while divesting resources that can offer greater value and opportunities to new owners," Eni said in a statement.

Eni said the deal does not include NAOC's 5% participating interest in the Shell Production Development Company Joint Venture in Nigeria.

Following the sale to Oando, Eni said it will also maintain its presence in Nigeria through Nigerian Agip Exploration (NAE) and Agip Energy and Natural Resources (AENR) and continue to operate in the country, focusing on operated offshore activities. It said its other non-operated states in other Nigeria assets, both onshore and offshore, and Nigeria LNG are not affected by the sale.