Nigerian oil firm Oando targets fresh capital raise to clear debt

Nigerian oil producer Oando is aiming to raise fresh capital over the next two years in order to repay debt used to acquire Conoco Phillips’ Nigerian assets, according to chief executive Adewale Tinubu.

Oando acquired Conoco Phillips’ Nigerian assets for US$1.5 billion in 2013 but struggled to repay the debt amid high financing costs and a low oil price environment, which led to the company posting a record $1.1 billion loss in 2014.

However, Tinubu told Reuters that Oando has now paid over 77% of the acquisition debt and plans to pay off the rest in the next 12 months. This would leave the company with a total debt of $300 million and would allow it to resume dividend payments.

“Our expectation is that over a four-year horizon we will no longer have long-term debt,” Tinubu told Reuters by email. Last week Oando’s losses narrowed to $59.8 million for 2018.

Oando will continue to pursue acquisitions as multinational oil companies sell assets, with ExxonMobil reportedly considering the sale of its Nigerian oil and gas fields for up to $3 billion to focus on new developments in US shale and Guyana.