Nigerian indigenous energy giant, Oando Plc, is making significant strides in bolstering the nation's oil sector stability and its own operational capacity. The company recently announced a substantial $550 million crude prepayment contribution to the Nigerian National Petroleum Company Limited's (NNPCL) Project Gazelle, a move that underscores its commitment to the country's energy future and reflects a defining year for the organization.
A Landmark Year for Oando
The announcement of the Project Gazelle contribution coincided with the release of Oando's audited financial results for the twelve months ending December 31, 2024. This period proved to be pivotal for the company, largely due to the successful completion of its strategic acquisition of Nigerian Agip Oil Company (NAOC) on August 22, 2024. This acquisition was the culmination of a decade-long growth strategy for Oando, profoundly reshaping its operational and financial landscape.
According to Wale Tinubu, Oando Group Chief Executive, the NAOC acquisition has significantly deepened Oando's upstream portfolio. "This has significantly deepened our upstream portfolio, doubling our working interest in the OML 60–63 assets and increasing our 2P reserves from 500 million to 1 billion barrels of oil equivalent," Tinubu stated, highlighting the transformative impact of the deal.
Robust Financial Performance and Strategic Investments
The positive impact of the NAOC acquisition and other strategic initiatives is clearly reflected in Oando's 2024 financial performance. The company reported a remarkable 44 percent increase in revenue, soaring to N4.1 trillion from N2.9 trillion in 2023. This impressive top-line growth was mirrored by an even more substantial surge in profitability, with profit after tax skyrocketing by 267% to ₦220 billion. This significant boost was primarily driven by the enhanced asset base derived from the NAOC acquisition and favorable foreign exchange impacts.
Oando's participation in Project Gazelle is a strategic investment designed to further stabilize Nigeria's oil revenue through forward crude oil sale agreements. This initiative by NNPCL is crucial for ensuring reliable export volumes and strengthening Nigeria's fiscal balance. Oando's $550 million input demonstrates a strong vote of confidence in the project's viability and the overall trajectory of the national energy sector.
Looking Ahead: Execution and Value Creation
As Oando moves into 2025, the focus shifts to execution and maximizing the value derived from its recent strategic moves. Wale Tinubu outlined key priorities for the coming year, emphasizing the unlocking of synergies from the NAOC acquisition.
"Our key priorities include unlocking synergies from the NAOC acquisition, implementing a revamped security framework to address pipeline vandalism, optimizing costs, and ramping up production towards our target of 100,000 barrels of oil per day and 1.5 trillion cubic feet of gas by 2029," Tinubu affirmed. These objectives highlight Oando's commitment to operational efficiency, increased output, and addressing challenges within the Nigerian oil and gas landscape.
Operational Excellence and Sustainable Practices
Oando's 2024 operational performance also showcased significant improvements. The company's average daily production rose to 23,727 barrels of oil equivalent per day (boepd), with a year-end exit rate of 36,000 boepd. Crude oil production specifically increased by 22% to 7,558 bopd, while 2P reserves saw a substantial 95% year-on-year jump to 983 million barrels of oil equivalent.
Beyond production figures, Oando maintained an impressive safety record, achieving a Lost Time Injury Frequency (LTIF) rate of 0.05 and accumulating over 7.35 million man-hours worked without incident. The company also reaffirmed its dedication to sustainability, making significant progress towards its environmental goals with a 92 percent reduction in routine gas flaring, putting it firmly on track to meet its 2027 zero-flaring objective.
Future Outlook and Diversification
Looking ahead, Oando has set ambitious production guidance for 2025, targeting 30,000 to 40,000 boepd. The company also aims for robust trading targets of 25–35 million barrels of crude oil and up to 1 million metric tonnes of refined products. In a move signaling its commitment to Nigeria's energy transition, Oando plans to launch 50 new electric buses, further contributing to cleaner mobility solutions in the country. These strategic moves underscore Oando's multi-faceted approach to growth, encompassing both traditional hydrocarbon exploration and a gradual pivot towards more sustainable energy initiatives.