Oando seeking $750m financing to boost oil output, says CEO

Oando Plc says it plans to raise up to $750 million in 2026 to fund a drilling campaign aimed at increasing production by 300 percent.

Wale Tinubu, the group chief executive officer, disclosed this in an interview with Reuters.

Tinubu said improved investor appetite for West African energy assets is opening new funding opportunities.

“We are pushing very, very hard towards getting the financing that we need to do an extensive drilling campaign,” the group CEO said.

Tinubu said the company had previously struggled to secure funding due to investor concerns about Africa being an “unsafe environment”.

However, he said geopolitical tensions, including the Middle East conflict and the war between Russia and Ukraine, have shifted that perception.

“Africa is very, very peaceful compared to these regions,” he said.

Tinubu said rising energy prices and disruptions in the Middle East have increased demand for Nigeria’s crude, with more cargoes now heading to Asia to replace supplies affected by the closure of the Strait of Hormuz.

The CEO said Oando has raised between $3 billion and $4 billion over the past decade (largely from European banks), with most of the funds deployed for asset acquisitions.

However, he said many European lenders have scaled back financing for African hydrocarbon projects due to climate concerns, prompting the company to explore alternative funding sources.

He said the alternative sources include institutions such as the African Export-Import Bank (Afreximbank) and the African Finance Corporation (AFC), as well as oil trading firms like Vitol, Trafigura, Glencore, and Mercuria.

Tinubu said more Gulf-based banks, private equity firms, and hedge funds are also showing increased interest in financing energy projects in Africa.

He noted that the continent needs to mobilise domestic capital, including pension funds, to support large-scale investments in the sector.

EXPANSION, REFORMS DRIVE OUTLOOK

Tinubu further said Oando has expanded its operations into Angola and is exploring opportunities in Ghana and Côte d’Ivoire as part of its regional growth strategy.

According to the Oando CEO, geopolitical tensions will have lasting implications for global energy security, sustaining interest in West Africa’s oil and gas reserves.

On Nigeria, Tinubu said recent reforms, including the 2021 petroleum law overhaul and policy changes under President Bola Tinubu, have improved the country’s investment outlook.

He also cited the role of the Dangote Refinery in demonstrating the value of Nigeria’s resources.

According to the Oando executive, fuel imports are now largely limited to price testing or during refinery maintenance, a shift from Oando’s previous role as a major importer.

Looking ahead, Tinubu said the company plans to leverage its gas assets for petrochemicals and fertiliser production to increase value addition.

He added that Oando is working to streamline its financial reporting processes after delays in filing audited statements with the Nigerian Exchange in recent years. (TheCable)