Oando To Boost Upstream Projects With $270m

Oando Plc has outlined roadmap for the second half of 2025, reaffirming its full-year production target of 30,000 to 40,000 barrels of oil equivalent per day (boepd) and announcing a capital expenditure (capex) plan of between $250m and $270m.

The spending will be directed toward upstream drilling activities, infrastructure upgrades, and environmental, social and governance (ESG) projects, with a strategic goal to cut costs by 20 per cent.

According to the company in its unaudited half year 2025 financial statement seen by THE WHISTLER, the Group’s H2 operational strategy includes the drilling of three new wells and six rig-less interventions aimed at sustaining production growth and enhancing asset integrity.

In the trading segment, Oando has set full-year volume guidance at 25 to 35 million barrels of crude oil and between 750,000 to 1,000,000 metric tonnes of refined products, as it adapts to evolving market dynamics shaped by increased domestic refining capacity.

Oando Clean Energy is also set to play a significant role in the company’s long-term diversification strategy.

The clean energy division expects to deploy 50 electric buses by year-end and continues to advance its solar photovoltaic (PV) module assembly plant toward Final Investment Decision (FID).

These initiatives form part of the Group’s broader efforts to align with global energy transition goals and bolster Nigeria’s sustainability agenda.

The updated outlook follows a mixed performance in the first half of 2025. Oando’s revenue declined by 15 per cent year-on-year to ₦1.721tn, compared to ₦2.031tn in H1 2024.

This was largely attributed to reduced trading activity and weaker realised oil prices. Despite the topline contraction, the upstream segment delivered significant growth, helping to partially offset weaknesses in other segments.

Gross profit for the period fell by 28 per cent to ₦59bn, down from ₦82bn in the same period the previous year, in line with the Group’s lower revenue and a shifting segment mix.

However, capital expenditure surged to ₦44bn from ₦18bn in H1 2024, reflecting increased investments in infrastructure, production optimization, and the integration of recently acquired Nigerian Agip Oil Company (NAOC) assets.

Group Chief Executive of Oando Plc, Wale Tinubu highlighted upstream growth as the standout driver of performance in H1 2025, citing a 63 per cent year-on-year increase in production volumes.

He credited this achievement to the consolidation of NAOC’s assets, early gains from operational optimization, and Oando’s assumption of operatorship, which enabled the implementation of robust security protocols and improved community relations.

“In H1 2025, we advanced our growth agenda in our upstream division, the primary driver of the Group’s performance,” Tinubu said.

“This resulted in enhanced infrastructure reliability, higher production volumes, and greater operational resilience.”

On the trading front, the company experienced headwinds due to a sharp reduction in petroleum motor spirit (PMS) imports, a trend accelerated by the increasing output of local refineries, particularly the Dangote Refinery.

While this development poses short-term revenue challenges, Oando sees it as a positive shift for Nigeria’s energy security. In response, the Group has diversified its crude offtake sources, optimized trade flows, and expanded into LNG and metals trading.

Tinubu noted that these initiatives are already showing positive momentum and are expected to contribute to a stronger performance in the second half of the year.

At the same time, Oando is moving forward with capital restructuring plans, including an equity raise and debt-to-equity conversions, which will be discussed at the forthcoming Annual and Extraordinary General Meetings.

“As we enter the second half of the year, our priorities are clear: accelerate upstream monetization through drilling and production assurance, strengthen trading performance, and execute our capital restructuring initiatives to restore balance sheet flexibility,”

Tinubu added. “With a focused strategy and a clear execution roadmap, we remain committed to delivering sustained value to our shareholders.”

Oando To Boost Upstream Projects With $270m is first published on The Whistler Newspaper