Oando presses ahead with growth plans despite 2014 losses
Indigenous oil firm, Oando Plc, is pressing ahead with its growth plans, insisting that its pillars of strength remain unshaken by the negative balance sheet imposed on its 2014 financial results by the oil price slump.
In its Facts behind the figures presented by the leaders of the company after posting a N184 billion loss in its recently released FYE 2014 financial statement, the company stated that the losses derived mainly from asset write-downs and impairments, and not from cash losses.
Instead, the company said it is persistently driving its investment programs, posting clear signals of speedy recovery after weathering impacts of huge investments, falling crude oil prices and the lull in the domestic industry environment.
Wale Tinubu, group chief executive of Oando Plc, stated that despite the 2014 results, the company has retained focus on its key growth programs with significant milestones in the year under review with consolidation of its high yield upstream businesses.
The growth advances, according to the company, are driven across the group’s four major divisions that host strategic business units in the upstream, midstream and downstream ends of the industry.
The divisions are represented by Oando Energy Resources (OER), Nigeria’s leading indigenous exploration and production company; Oando Energy Services (OES), an oilfield service provider and operators of Nigeria’s largest swamp rig fleet; Oando Gas & Power (OGP), the leading private sector gas developer and distributor; and Oando Downstream, the leading supplier, trader, and distributor of refined petroleum products in sub-Saharan Africa.
Tinubu said Oando had in 2014 sowed huge investments in transforming from a predominantly downstream company to a leading indigenous upstream player.
The company took an audacious step in acquiring all the Nigerian assets of American oil multinational firm, ConocoPhillips (COP) which was exiting the country’s worsening operating environment where pipeline vandalism and stringent fiscal outlook compelled anxiety.
The completion of the acquisition deal propelled Oando to the top of Nigeria’s indigenous oil production chart, eclipsing older companies that had hitherto dominated the indigenous exploration and production space.
“Our upstream business completed a landmark $1.5 billion acquisition of ConocoPhillips Nigerian Oil & Gas Business, which increased our net production from about 5,000 barrels (bbls) in 2013 to about 51,000 barrels of oil equivalent (boepd) by the end of 2014, as well as our proved and probable reserves from 18.9 million barrels of oil equivalent (mmboe) to 430 mmboe in the same period.”
He described the production feat as exceptional; adding that the hedging instrument applied enabled it pay down in excess of $350 million of its initial $900 million acquisition debt to date, leaving net debt of about $485 million.
The company, according to Tinubu, also invested in the development of infrastructure and facilities across its business units, including the 51 kilometer Umugini evacuation pipeline for unhampered production at Ebendo field.
In the midstream, he said Oando also completed first segment representing 2.1 Km of the 9.0 km expansion project of the Greater Lagos pipeline grid to increase overall capacity by 30mmscf/day and provide piped gas to customers along the Ijora and Marina axis.
With the collaboration of General Electric Nigeria, Oando stated that it would engage in various initiatives to develop power generation projects, Compressed Natural Gas facilities, and mini Liquefied Natural Gas projects in the country.
Also working with Vitol and Helios, Oando explained that it has repositioned its downstream unit for a new era of investment growth and profitability.
“Our strategic focus is to increase our operational efficiencies, deleverage our balance sheet, and return the company to profitability, whilst at the same time creating the necessary platform to be the partner of choice to the IOCs as they continue their divestment programmes.”
OLUSOLA BELLO