Africa is ready to make deals in oil and gas - Oando CEO

The 25th Africa Oil Week in Cape Town set the stage for discussions on the potential deal-making in the African oil and gas industry, the impact of global dynamics on Nigeria's oil and gas sector, and the opportunities available to indigenous companies in the region. Wale Tinubu, the CEO of Oando, shared insights on the promising outlook for the industry in a recent interview with CNBC Africa's Jill de Villiers. Tinubu expressed optimism about the current scenario, highlighting the upbeat spirit among industry stakeholders following the increase in oil prices. After years of restructuring and cost-cutting measures, he emphasized that the sector is now poised for deal-making activities, signaling a positive shift in momentum. Discussing the potential for deal-making in Africa, Tinubu pointed out that the continent holds seven and a half percent of global oil reserves, making it an attractive environment for transactions. Citing past transactions involving major players like Shell, Total, and Eni, he underscored the significant reserves available for sale in the region, offering a promising landscape for new deals and collaborations. One of the key topics of discussion was the divestment trend among international oil companies and its implications for indigenous firms. Tinubu highlighted the importance of these divestments, noting that they present valuable opportunities for local companies to acquire proven reserves and assets. By taking over these assets, indigenous companies can focus on optimizing costs, enhancing operations, and driving better returns, leveraging their local expertise and agility to unlock value in the assets. When asked about Oando's Q3 results, Tinubu shared positive news, mentioning a 46% increase in profits. He specifically highlighted the company's success in reducing its debt burden, particularly related to the ConocoPhillips transaction. Oando managed to pay off a substantial portion of the debt, demonstrating its commitment to financial prudence and strategic debt management amidst volatile oil prices. The CEO emphasized the significance of securing proven reserves for indigenous companies like Oando, as it provides a stable cash flow base that can support ongoing operations and future growth initiatives. By efficiently managing their existing assets and exploring new opportunities, indigenous firms can sustain profitability and drive long-term sustainability in the industry. In closing, Tinubu noted that Oando still has significant reserves to tap into, with 37 years of production remaining at current levels. With a strategic focus on growth and value creation, the company is well positioned to capitalize on emerging opportunities in the oil and gas sector, both locally and internationally. As global dynamics continue to shape the oil and gas industry, African countries, particularly Nigeria, are witnessing a resurgence in deal-making activities and strategic investments. Indigenous companies like Oando are playing a pivotal role in driving innovation, efficiency, and growth in the sector, showcasing the continent's readiness to make significant strides in the global energy market.