Afreximbank advances Oando's production strategy

Oando Oil Limited is now closer to its production goals as African Export-Import Bank (Afreximbank) completes upsizing its reserve-based lending facility in favour of the oil and gas company for US$375mn

The company’s pay down of the original US$525mn facility, secured in 2019, to US$100mn in 2024 created significant headroom for refinancing and enhancing Oando’s financial flexibility.

Alongside Afreximbank, the upsizing was also supported by Mercuria Asia Resources PTE Limited (Mercuria). This will advance Oando’s strategic capital management, aiding the company's ambition to achieve production of 100,000 barrels of oil per day and 1.5 bn cu/ft of gas per day by the end of 2029, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market.

The upsizing will also lead to local economic growth by creating jobs, upgrading infrastructure, and fostering technological advancements in the oil and gas sector.

“We are pleased to have completed the upsizing of our RBL facility, a strategic milestone that reinforces our commitment as Operator of the Oando-NEPL JV to maximising the value of our expanded asset portfolio. Our Joint Venture holds extensive reserves with the potential to generate over US$11bn in net cash flows to Oando over the assets’ life. This working capital facility is a critical enabler towards efficiently extracting and monetising these resources. We appreciate the continued partnership of Afreximbank and Mercuria, whose unwavering support underscores their alignment with our long-term focus on maximizing production, optimizing asset performance, and delivering sustainable value to all stakeholders,” said Wale Tinubu, group chief executive, Oando PLC and executive chairman, Oando Energy Resources.

“Afreximbank remains a longstanding financial partner to Oando PLC and its affiliates and has consistently supported the company’s growth and expansion initiatives. We are delighted that Mercuria, one of the world’s largest independent energy and commodities groups and one of our partners, has brought its global expertise and financial backing to the transaction, further strengthening Oando’s ability to execute its production growth strategy,” said Haytham Elmaayergi, executive vice president, Global Trade Bank, Afreximbank, as he stressed on Afreximbank's focus in promoting local content in the region's oil and gas sector.