Nigerian energy group Oando Plc has made a significant stride in the country’s oil sector by securing a major stake in a landmark financing deal coordinated by the African Export-Import Bank (Afreximbank). The company announced its participation in the closing of a $925 million facility for Project Gazelle, a $3.3 billion oil-backed financing initiative sponsored by the Nigerian National Petroleum Company Limited (NNPC Limited).

Oando Steps Up as Key Player

Oando, through its subsidiary Oando Trading, has emerged as a central participant in the deal by contributing a substantial $550 million. The remaining balance of $375 million was secured from other parties, bringing the total disbursed amount to $925 million. Project Gazelle itself is a structured financing arrangement backed by future oil sales. This complex financial mechanism essentially provides NNPC with upfront funding in exchange for guaranteed future deliveries of crude oil. The $3.3 billion facility marks the largest syndicated loan ever obtained by Nigeria in the international market and stands as one of the biggest syndicated debts raised across Africa in recent years.

Benefits for Oando and Nigeria

Wale Tinubu, Group Chief Executive of Oando Plc, underscored the significance of the deal for both the company and the nation. “The successful completion of this facility signifies a major win for both Oando and Nigeria as a whole,” Tinubu remarked. “This transaction not only reinforces Oando’s ability to deliver value but also solidifies our position as the leading indigenous partner of choice in Nigeria’s oil sector.”

Tinubu further emphasized Oando’s dedication to supporting Nigeria’s economic progress. “As a proudly Nigerian company, we’ve always strived to leverage our platform to contribute to the nation’s sustainable development,” he stated. “Project Gazelle is expected to play a crucial role in achieving the Federal Government’s goals of bolstering Nigeria’s socioeconomic well-being.”

The involvement of Afreximbank as the lead arranger for the deal holds additional weight. The bank’s prominent role signifies its ongoing commitment to supporting the growth of African corporations, both private and public. This successful transaction is likely to further inspire investor confidence in the Nigerian and broader African markets.

Project Gazelle’s Wider Impact

The Project Gazelle deal transcends a simple financial transaction. It represents a critical step forward for Nigeria’s oil sector, ensuring a significant influx of capital to support ongoing operations and development projects. The upfront financing provided through the facility will likely free up resources for NNPC to invest in vital areas, such as exploration and infrastructure upgrades. Additionally, the involvement of a prominent Nigerian company like Oando underscores the nation’s growing self-reliance within the oil and gas industry.

Source: Vanguard