With its recent listing on Toronto Stock Exchange, Oando Energy Resources (OER) has joined the league of foreign companies with huge access to international funding and world-class expertise. Oando PLC – Nigeria’s largest publicly traded integrated energy company- is the largest single shareholder of Oando Energy Resources with 94.6 percent.
OER which is Oando PLC’s investment vehicle in the upstream is well positioned to capitalise on growth in the Nigerian energy sector and other emerging hydrocarbon basins in Africa. Hence, the listing on the Toronto Stock Exchange puts the company on a platform for equity investments that will accelerate the company’s upstream growth programme.
Analysts believe that such robust funding opportunities and the resultant increase in return accruable to PLC on the basis of its largest shareholding will hugely benefit investors the shareholders of Oando PLC. Also considering Oando’s position as Nigeria’s leading indigenous, integrated energy company with multiple earning streams from natural gas, power, petroleum products, rig drilling etc, the potential becomes even more appealing.
The lack of access to international capital to drive higher margin upstream business is one major problem retarding the growth of Nigerian indigenous Exploration and Production (E&P) companies. This impediment has made it increasingly difficult for these indigenous companies to compete with foreign National Oil Companies (NOCs) and multinational companies for acreages and for shareholders to fully benefits from the abundance of Nigeria’s crude deposits.
After over 50 years of oil and gas exploration and development in the country, indigenous companies still account for less than 10 per cent of the Nigeria’s over 2.4million barrels per day crude oil production.
The larger chunk of Nigeria’s oil and gas business is accounted for by the foreign companies buoyed by strong liquidity from international funding. With inadequate indigenous skills, coupled with lack of access to international funding, indigenous firms have been restricted to marginal assets, which are considered sub-optimal by the deep-pocket multinational players.
The lack of capacity of indigenous companies to operate larger acreages accounts for the domination of the upstream business by the top class foreign operators.
However, the recent listing of Oando Energy Resources on the Toronto Stock Exchange has become a game changer as the leading indigenous oil and gas exploration and production company has positioned itself to access offshore equity financing.
With the Toronto listing, Oando has become a beautiful bride that would attract reputable foreign partners, international investors and high-quality manpower to boost its upstream businesses and enhance the growth of Nigeria’s oil and gas industry.
The listing was actually a demonstration of international acceptability of the company’s track record of transparency and sound management team.