Oando PLC, a leading Nigerian energy company listed on both the Nigerian and Johannesburg Stock Exchanges, has announced the successful upsizing of its Reserve-Based Lending (RBL2) facility to $375 million. The deal, spearheaded by the African Export-Import Bank (Afreximbank) with support from global commodities trader Mercuria, extends the facility’s maturity date to January 30, 2029. The financing is aimed at expanding Oando’s upstream operations and enhancing its production capacity.
Reserve-Based Lending, a model increasingly used in oil and gas financing, allows borrowers to access funds based on the size and value of their proven hydrocarbon reserves. Oando’s borrowing is backed by its substantial reserve base of 1.0 billion barrels of oil equivalent (Bnboe). The company significantly reduced its previous RBL2 debt from $525 million in 2019 to $100 million by the end of 2024, demonstrating strong debt management that paved the way for this refinancing.
Commenting on the development, Oando’s Group Chief Executive, Wale Tinubu, described the deal as a “strategic milestone” for the company. He emphasized that the capital injection will be critical in unlocking over $11 billion in net cashflows from its assets. Tinubu also highlighted the long-term partnerships with Afreximbank and Mercuria as crucial in helping Oando maximize production, improve asset performance, and deliver sustained stakeholder value.
The $375 million facility will be directed towards aggressive growth initiatives, including accelerated drilling programs, infrastructure upgrades, and the integration of advanced operational efficiencies. These initiatives are in line with Oando’s goal to ramp up production to 100,000 barrels of oil per day and 1.5 billion cubic feet of gas daily by 2029. This financing follows the company’s $783 million acquisition of the Nigerian Agip Oil Company (NAOC) from ENI in 2024, a move that significantly expanded its operational footprint.
The NAOC acquisition added 24 producing oil fields, around 40 exploration prospects, 1,490 km of pipelines, 12 production stations, and strategic energy infrastructure including three gas plants and the Brass River Oil Terminal to Oando’s portfolio. It also included the 960MW Kwale-Okpai power plants. The successful refinancing, paired with these expanded assets, signals growing confidence among global financiers in Oando’s strategy and its potential to drive growth in Nigeria’s energy sector.
Source: Nairametrics