Nigeria’s crude producer, Oando Plc, said it is hopeful that 2019 will be a good year as it targets increased output.
This is coming as the company continues to offset its $2.5 billion debt, 90% of which is expected to be paid by the end of September 2019.
The company’s CEO, Wale Tinubu, disclosed this recently in Lagos during an interview with Bloomberg. He specifically gave insight into the company’s development plans, saying that “we have purchased enough reserves and our job should really be to exploit those reserves.”
Paying off debts had its toll…
Tinubu said that Oando Plc had dedicated resources to paying off the $2.5 billion debt, which was incurred back in 2014 when the company acquired some oil and gas assets from ConocoPhillips, a US-based company.
Unfortunately, the focus on debt payment impeded the company’s growth, especially in 2016 when it declared a loss after tax of N3.9 billion.
Shareholders may smile again
As the company makes efforts to reposition its business for growth, its shareholders (who have not receive dividends in recent times) may have reasons to smile again.
Oando is currently focusing on more profitable areas while taking advantage of the recovering global oil prices to ensure growth. For instance, the CEO said they are reopening hitherto unutilised oil fields, even as they steadily increase the number of rigs.
The company has about 450 million barrels of untapped crude reserves which were proceeds from the 2014 ConocoPhillips acquisition. These reserves will be explored to increase revenue for the company.
“We are focused on developing that side of our business, which is really to export Nigerian crude and bring in products wholesale.” – Tinubu
In the meantime, the company has continued to show signs of recovery from its recent financial problems. As we reported, its 2018 half year report recorded an 11% increase in turnover with N297.3 billion compared to N267 billion reported in 2017. Profit after tax increased by 86%, from N4.6 billion in 2017 to N8.5 billion in 2018.
Founded in 1956, Oando Plc is one of the biggest operators in the upstream sector of Nigeria’s oil and gas industry. Its shares closed at N5.00 during today’s trading on the Nigerian Stock Exchange.