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Bloomberg
Oando Plc is looking to boost crude output from next year as the Nigerian producer breaks the back of a $2.5 billion debt burden built up through the 2014 acquisition of oil and gas assets from US giant ConocoPhillips.
The borrowings will be almost 90 percent lower by the third quarter of 2019 and the company is now preparing for its next stage of development, Chief Executive Officer Wale Tinubu said at Oando’s Lagos headquarters. “We have purchased enough reserves and our job should really be to exploit those reserves,†he said.
Oando focused on repaying the debt after the ConocoPhillips deal to cushion the impact of the financing costs, but that came at the expense of growth, according to the CEO. The company, listed in Johannesburg and Lagos, is now able to increase its number of rigs and reopen oil fields, he said, taking advantage of a recovery in the oil price.
Untapped Reserves
Oando has more than 450 million barrels of reserves following the ConocoPhillips acquisition and has interests in 14 oil exploration licenses in Africa’s biggest crude producer. Its Oando Energy Resources Inc. unit aims to grow production organically to 75,000 barrels a day by 2023 from 40,000 barrels, while also seeking “acquisition opportunities†which could help it exceed that goal, Tinubu said.
Besides repaying debt, the company sold parts of the business to focus on more profitable areas, according to the CEO.
Disposals include a stake in a gas distribution and power unit to Helios for $115.8 million in 2016, while Oando gave up its majority stake in a service-station and fuel-storage and supply business.