Oando PLC, Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange has received ministerial consent for its $1.65 billion acquisition of ConocoPhillips (COP) Nigerian assets.
In December 2012, Oando PLC through its Exploration and Production subsidiary Oando Energy Resources (OER), entered into an agreement with COP to acquire its Nigerian businesses.
Though Oando successfully acquired all funds required to complete its acquisition of the assets, closing of the ConocoPhillips acquisition had remained subject to the satisfaction of certain closing conditions, including government and regulatory approval, and the consent of the Honourable Minister of Petroleum Resources.
Commenting on the approval, Group Chief Executive, Oando PLC, Mr. Wale Tinubu, expressed delight, describing the process leading to the approval as a long journey.
“We are delighted to receive the approval of the Honourable Minister of Petroleum Resources for the completion of our acquisition. It has been a long journey, wherein we kept faith with our strategy and executed every milestone diligently. This acquisition satisfies our criteria for assets in production, as well as excellent appraisal and exploration prospects. We will work hand in hand with the management team of ConocoPhillips to immediately complete the acquisition,” Tinubu said.
Ministerial consent is the mandatory final approval of all oil and gas acquisitions by the Honourable Minister of Petroleum Resources as required by the Petroleum Act of 1969 which states that “prior consent of the Minister of Petroleum Resources is obtained before the assignment of any right, power or interest in an oil prospecting license or oil mining lease.”
The Act stipulates that the Federal Ministry of Petroleum Resources must conduct due diligence appraisal to ensure ownership is being transferred to a company that is of good reputation, has sufficient knowledge, experience and financial resources to work the license or lease and in all other respects is acceptable to the federal government. Consent of the minister may only be granted where the minister is satisfied that the above conditions have been fully met.
With the due completion of the game-changing acquisition, Oando will be immediately positioned as the largest indigenous oil producer in Nigeria and will now produce circa 50,000 barrels per day from 6 producing fields and will significantly impact its near immediate Upstream strategy and operations, and optimise its value across the energy chain.