•As Oando divests 25% midstream business to offset $1.5bn debt
By Ediri Ejoh & Prince Okafor
Crude oil prices in the international market Thursday, hits $70 per barrel for the first time since November, 2018 five months, as expectations of tight global supply outweighed pressure from rising U.S. production.
This came as Nigerian indigenous energy company, Oando Plc, said it hds sold its midstream business subsidiary (Axxela Limited) to Helios Investment partners for $41.5 million, to offset $1.5 billion long-term debt after purchasing Conoco Phillips.
The total purchase price for the transaction according to the company was $41.5 million. The net proceeds of the transaction will be applied in partially prepaying the Group’s Medium Term Loan (MTL).
Helios Investment Partners is a private equity investing firm operating in Africa and based in London, United Kingdom, with additional offices in Nairobi, Kenya and Lagos, Nigeria.
Brent futures were up 69 cents, to $70.01 a barrel around, touching its highest since November 12, when it last traded above $70.
The United States, West Texas Intermediate crudes were up 26 cents at $62.72 a barrel. The contract dropped 12 cents in the previous session after briefly hitting $62.99, also the highest since November.
According to Oando Chief Executive Officer, CEO, Mr. Adewale Tinubu, “The completion of this divestment signifies another win for the company. The divestment further reinforces Oando’s ability to create value that can be monetized and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria.
“This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.”