Oando to Boost Crude Output as $2.5bn debt burden has been broken

oando debt broken to bring about crude growth in the oil sector

Nigerian oil firm Oando is looking to boost crude output from next year as it breaks the back of a $2.5bn debt burden. That debt was built up through the 2014 acquisition of oil and gas assets from US giant ConocoPhillips.

The borrowings will be almost 90% lower by the third quarter of 2019 and the company is now preparing for its next stage of development, CEO Wale Tinubu said in an interview 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 Tinubu. 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. Besides repaying debt, the company also sold parts of the business to focus on more profitable areas.

Oando has more than 450-million barrels of reserves following the ConocoPhillips acquisition and has interests in 14 oil exploration licences in Africa’s biggest crude producer. Its upstream unit Oando Energy Resources aims to grow production organically to 75,000 barrels a day by 2023 from 40,000 barrels now, while also seeking “acquisition opportunities” that could help it exceed that goal, he said.

Source: energy mix report