The rich also cry. This axiom seems to capture the current disconcerting experience of Wale Tinubu, Group Chief Executive, Oando Plc. Yes, it is a fact that he is not one of your run-of-the-mill businessmen; it is also true that he is head and shoulders above several competitors in the industry and he is one of the few who rub shoulders with other top businessmen in the world. But for some time, the astute businessman has literally been having sleepless nights over the current rumblings in Oando Plc, one of Nigeria’s leading oil companies.
This disturbing development could be traced to 2012 when he reportedly used one of his subsidiaries, Oando Energy Resources Incorporated (OER), which deals in oil and gas exploration and production in Nigeria, to launch an ambitious acquisition of the Nigerian upstream oil and gas business of American giant, ConocoPhillips, for the sum of US$1.5 billion.
Consequently, this gave him and his shareholders a grip of the onshore business not just of Conoco’s upstream assets, but also the assets of Phillips Oil Company Nigeria Limited (POCNL), which holds a 20% non-operating interest in Oil Mining Leases (OML) as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited (NAOC) Joint Venture.
The deal also gave Tinubu’s firm the offshore business of Conoco Exploration and Production Nigeria Limited (CEPNL), which holds a 95% operating interest in OML 131 and Phillips Deepwater Exploration Nigeria Limited (PDENL), which holds a 20% non-operating interest in Oil Prospecting Licence (OPL) 214 located 110 km offshore within the Niger-Delta.
In addition to these oil blocks, ConocoPhillips also transferred its 17 percent shareholder interest in Brass LNG Limited, along with all of its related interests, to Oando Energy Resources under Tinubu’s watch.
Also, it will be recalled that after the former Minister of Petroleum Resources, Mrs. Deziani Allison-Madueke, approved the transaction in June 2014, Tinubu took a lot of loans from local and multinational banks, with the expectation that high oil prices at that time and the eventual completion of the Brass LNG projects would yield enough revenue to offset the loan.
Sadly, things turned awry, as oil prices plunged to less than 50 dollars per barrel. As if that is not enough, the Brass LNG project has suffered consistent delays and is yet to produce a single drop of liquefied natural gas for export, despite the billions that has been sunk into it.
Industry watchers are anxiously waiting to see how Tinubu, who is known for taking audacious risks in the oil business, would be able to weather this storm.