Italian energy giant Eni has unveiled its plan to sell its exploration and production subsidiary, Nigerian Agip Oil Co. (NAOC), to indigenous energy solutions provider, Oando PLC.
This strategic move aligns with Eni’s 2023-26 strategy and awaits approval from local and regulatory authorities.
Eni’s decision to divest its onshore assets is driven by various factors, including ongoing oil thefts and spills and a shift towards more focused exploration budgets.
The Nigerian Agip Oil Company primarily operates in onshore oil and gas production and power generation.
It holds interests in four onshore blocks, oil mining licences (OMLs), two onshore exploration leases, and two power plants within Nigeria.
Previously, Eni held a 20% stake in four OMLs, with Oando also having a 20% stake, while the remaining 60% was owned by NNPC E&P.
Production from these assets feeds into the Obiafu-Obrikom plant and the Brass terminal, contributing 24,000 barrels of oil equivalent per day to Eni’s net production in 2022.
Eni further exports a substantial portion of its gas production from these licences to the Nigeria LNG (NLNG) plant, where it maintains a 10.4% interest, with additional gas going to the Okpai plant and another open-cycle plant in Rivers State.
Ongoing efforts in the area include workovers to mitigate mature field decline and the development of new compressors to reduce gas flaring.
NAOC also manages the Okpai 1 and 2 power plants, boasting a combined capacity of 960 MW, along with two onshore exploration areas, OPL 282 and 135, where it holds 90% and 48% stakes, respectively.
Despite this divestment, Eni affirms its commitment to Nigeria through Nigerian Agip Exploration and Agip Energy and Natural Resources, as well as its continued involvement in onshore and offshore assets operated by others. Eni will also retain NAOC’s 5% interest in the Shell Production Development Company joint venture.
Wale Tinubu, CEO of Oando Group, expressed excitement about the deal’s potential to unlock unprecedented opportunities for the Nigerian energy company. This transaction aligns with Oando’s strategy of acquiring, enhancing, appraising, and efficiently developing reserves.
Oando’s acquisition of NAOC includes 40 discovered fields, with 24 currently in production, as well as 12 production stations, 1,490 km of pipelines, and three gas processing plants.
This purchase will significantly bolster Oando’s reserves, increasing them from 503.3 million barrels of oil equivalent (boe) to a formidable 996.2 million boe.
