Nigeria’s prominent integrated energy solutions provider, Oando Plc, led by oil magnate Wale Tinubu, has clinched a substantial oil swap contract valued at $755 million, underscoring its growing influence in Nigeria’s energy sector and its commitment to expanding its operations both domestically and internationally.
The contract, part of the Direct Sale and Direct Purchase (DSDP) initiative, was awarded to six oil companies, including Oando Plc, Gulf Transport and Trading, AA Rano Nigeria, PV Oil Singapore PTE Limited, Sahara Energy Resources, and Mercuria, Mocoh SA.
Under the DSDP contracts, these companies have been granted the authority to cater to a significant portion of Nigeria’s gasoline requirements, along with covering portions of its diesel and jet fuel consumption. This move aims to bolster Nigeria’s energy sector by ensuring a steady supply of petroleum products.
Tinubu’s impact: Oando Plc thrives under dynamic leadership
The Nigerian National Petroleum Corporation (NNPC) has been engaged in importing gasoline through consortia of foreign and local trading firms since 2016, repaying them with crude oil under the DSDP contracts due to financial constraints. However, the NNPC recently transitioned to a cash payment system for imports, terminating most DSDP contracts, as confirmed by the group CEO of NNPC Ltd in June 2023.
Oando, a Nigerian multinational energy company with operations spanning upstream, midstream, and downstream sectors, has been making significant strides under the leadership of Tinubu. Tinubu, who indirectly holds a substantial stake in Oando through Ocean and Oil Development Partners (OODP), has been instrumental in the company’s recent achievements.
Oando’s $800-million Afreximbank deal highlights commitment to production capacity and industry leadership
The latest contract secured by Oando follows its notable agreement with global energy giant Eni for the acquisition of 100 percent of the shares of Nigerian Agip Oil Company, a move that is expected to elevate Oando’s stake in various oil mining leases (OMLs) significantly.
Furthermore, Oando finalized a groundbreaking $800-million deal with the African Export-Import Bank (Afreximbank) during the Intra-African Trade Fair (IATF) in Cairo, signaling a significant financial boost for the company.
This deal, comprising senior secured reserve-based lending and receivables-backed term loan facilities, underscores Oando’s commitment to enhancing its production capacity and solidifying its position in the African oil industry.