Afreximbank Facilitates $650M Financing for Oando's Acquisition of Agip's Stake in Nigerian Oil Joint Venture

Afreximbank, serving as the mandated lead arranger, bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee, underwrote $350 million of the facility.

The African Export-Import Bank (Afreximbank) has successfully arranged a $650 million financing facility for Oando Petroleum and Natural Gas Company Limited. This facility, which includes a senior $500 million reserve-based lending facility and a junior $150 million tranche, was utilized by Oando to acquire the 20% participating interest previously held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria.

The joint venture, encompassing significant oil and gas assets such as oil mining licenses 60, 61, 62, and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date. An estimated 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remain.

Afreximbank, serving as the mandated lead arranger, bookrunner, coordinator, underwriter, escrow agent, facility agent, and security trustee, underwrote $350 million of the facility. Additional participants in the transaction included Indorama Eleme Petrochemicals Limited and Mercuria Energy Group, each contributing $150 million.

The acquisition is expected to triple Oando’s production capacity from 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, significantly boosting Nigeria’s oil output and reinforcing the country's position in the global energy market. The transaction is also projected to drive local economic growth by creating jobs, enhancing infrastructure, and fostering technological advancements in the oil and gas sector.

At the closing ceremony held in London on August 22, 2024, Mr. Wale Tinubu CON, Group Chief Executive of Oando, led the company's delegation, accompanied by representatives from ENI S.P.A. and Mercuria Energy Group. Afreximbank was represented by Mr. Peter Adeshola Olowononi, Head of Client Relations, Anglophone West Africa, and Mrs. Ketiwe Lwando, Manager of Structured Trade & Commodity Finance.

Mr. Haytham Elmaayergi, Executive Vice President of Global Trade Bank, Afreximbank, emphasized that the facility supports the Bank’s strategy of promoting local content in Africa’s oil and gas sector. He highlighted the transaction as a significant milestone in advancing Nigeria’s upstream oil and gas sector, aligning with the country's local content policy and energy security strategy.

Mr. Wale Tinubu celebrated the transaction as a culmination of a decade of efforts, noting that it represents a significant achievement for Oando and the broader indigenous energy sector in Nigeria. He emphasized Oando’s commitment to optimizing the acquired assets, advancing production, and contributing to the nation's strategic objectives while maintaining responsible practices and sustainable development.