NNPC, NAOC and OANDO JV Makes Gas and Condensates Discovery

Wednesday, August 28, 2019 / 12.40PM / Press release by Eni/Additional report by Proshare research/ Header Image Credit: Oil and Gas Middle East

A trilateral collaborative joint venture (JV) between the Nigerian National Petroleum Corporation (NNPC), Nigerian Agip Oil Company, NAOC (an affiliate of Italian Oil major, Eni), and Oando has resulted in the discovery of large onshore gas and condensate deposits in the Niger Delta.

The new find is the equivalent of 1 trillion cubic feet of gas and 60 million barrels of associated condensate, with further reservoir of potential gas and condensate to be assessed in the next appraisal campaign. The partners will immediately put on stream processing operations to increase gas production, says Eni in a press release issued today August 28, 2019.

The NNPC/NAOC/Oando JV is a joint venture between the Nigerian Agip Oil Company, which holds 20% equity and acts as operator; Nigerian National Petroleum Corporation (NNPC) which holds 60% equity and Nigeria's Oando PLC, which owns the balance of 20% equity.

The discovery was made in the deeper sequences of the Obiafu-Obrikom fields in OML61. 

The new find is good news for Oando which has had a turbulent year with disagreement with regulatory authorities, the Securities and Exchange Commission (SEC), over the outcome of a Forensic Report into its operations released in Q1 2019. 

The new gas and condensate find with early mobilisation for exploitation should improve top line performance between 2020 and 2022, and bring further comfort to the corporate bottom line as well. If investors factor in major earnings per share growth over the next 3 to 4 years on a recent price earnings multiple of 2.38, a hidden value growth opportunity of between 15% and 20% could be seen as reasonable. The indigenous oil major could see prices spurt up well above its recent N3.75 in months ahead.

Table 1 Oando Plc Q2 2019 Result