OANDO Plc, an indigenous energy solutions provider, has secured a $650 million lending facility from the African Export-Import Bank (Afreximbank).
The loan is part of the $783 million acquisition of Nigerian Agip Oil Company (NAOC) from Italian oil major, Eni.
In a statement on Friday, August 23, Afreximbank said the loan includes both senior and junior reserved-based lending facilities.
The indigenous oil firm had on Thursday, August 22 announced the successful acquisition of NAOC.
The deal was partly facilitated by Afreximbank with a senior credit facility of $500 million and a junior reserve-based lending facility of $150 million.
“African Export-Import Bank (Afreximbank) has successfully arranged a senior US$500-million and a junior US$150-million reserve-based lending facility for Oando Petroleum and Natural Gas Company Limited.
“The facility was used to finance Oando’s acquisition of the 20 per cent participating interest held by Nigerian Agip Oil Company Limited (NAOC) in the NEPL/NAOC/Oando Joint Venture in Nigeria,” the bank stated.
Executive vice president of Global Trade at Afreximbank, Haytham Elmaayergi, remarked that the facility represents a significant milestone in the Bank’s efforts to enhance local content within Africa’s oil and gas sector.
“By supporting the acquisition of key energy assets by an indigenous company like Oando, the Bank is fostering economic empowerment, enhancing regional trade, and contributing to the sustainable development of Africa’s natural resources,” he said.
The group chief executive of Oando, Wale Tinubu, said, “We thank Afreximbank for its unwavering leadership in bridging the trade finance gap in Africa and ensuring that Oando can consolidate its stake in the Joint Venture via the acquisition of NAOC’s 20% stake.”
The ICIR reported in September 2023 that the Italian firm agreed to divest its onshore Nigerian assets to Oando.
The transaction is to increase Oando’s participating interests in Oil Mining Lease (OMLs) 60, 61, 62, and 63 from 20 per cent to 40 per cent.
After the sale, Eni will retain the unit’s five per cent stake in the Shell Production Development Company (SPDC) joint venture operated by Shell and the Italian group will keep its offshore activities in Nigeria.