LONDON (Reuters) – Nigerian-based oil producer Oando wants to double its oil output by 2019, targeting assets likely to be shed by majors hit by the crude price drop.
Chief Executive Wale Tinubu told Reuters in an interview on Monday the retreat among the world’s major producers from the onshore Nigerian oil industry would likely leave a lot of assets on the market.
“When you compare the size of the resource base (the majors) have in Africa vis-à-vis the rest of the world, it’s clear that they will have to do Nigerian divestments and we are the natural buyer of choice,” he said.
Oando, which produces some 50,000 barrels of oil a day, already bought ConocoPhillips’ Nigerian assets for $1.5 billion in July last year, with a view to meeting its target of hitting 100,000 bpd by 2019.
“We are driven, we are keen and we are on the lookout for opportunities and we are confident of securing opportunities towards increasing our reserve base and our production,” he said.
The price of oil has halved to below $50 a barrel over the last 12 months, as global supply has outstripped demand.
“We’re betting on an eventual oil price rise and we see the best time for securing those reserves as being now and not when the market rebounds,” Tinubu said.
Nigerian onshore oil projects have been plagued by industrial scale oil theft, security problems and oil spills, the latter having become a growing legal liability for major oil companies.
Nigeria is Africa’s largest oil producer and contributes some 2 million barrels a day to total world supply.
Shell has already sold some of its Nigerian oilfields and said last week it will focus its future investments there on natural gas. Its French peer Total agreed in March to sell a stake in an onshore oilfield to Nigeria’s Aiteo Eastern E&P.
Local oil producer Afren Plc, which went into administration in July, owns oilfields in Nigeria, but Tinubu said Oando was not considering them.
“We looked at it but we’re not really interested. It doesn’t satisfy our criteria we believe there are many better opportunities out there,” he said.