Oando PLC, a major energy provider in Nigeria, released its unaudited financial report for the first half of 2024, showing a 51% increase in revenue despite a reduction in production due to operational challenges. The company’s revenue reached N2.0 trillion, up from N1.3 trillion in H1 2023, although its Profit-After-Tax dropped by 44% to N62.6 billion, down from N112.4 billion in the same period last year.

Operational Overview

Upstream Production:

• Oando’s production declined by 15%, with daily output averaging 24,389 barrels of oil equivalent per day (boepd), down from 26,140 boepd in H1 2023.

• Oil production fell to 5,790 barrels per day, a 15% reduction, while natural gas and natural gas liquids (NGL) production also decreased slightly.

• The company attributed these declines primarily to issues with sabotage and theft affecting assets in the Niger Delta, leading to frequent shutdowns for repairs.

Trading Activity:

• The volume of traded crude oil dropped by 35% to 10.6 million barrels, down from 16.2 million barrels in H1 2023.

• Traded refined petroleum products were down 55%, reaching 451,533 metric tons compared to 1,006,335 metric tons the previous year.

Financial Performance

Revenue and Profit:

• Revenue grew by 51% to N2.0 trillion, driven by favorable exchange rates and increased crude oil volumes lifted, offsetting the impact of reduced production and trading volumes.

• Profit-After-Tax for the period declined by 44%, ending at N62.6 billion due to increased administrative costs, largely from foreign exchange losses on liabilities.

Capital Investment:

• Oando reduced its capital spending on oil and gas development significantly, totaling $8.97 million compared to $32.7 million in H1 2023, reflecting a strategic pullback in exploration investments.

Group Chief Executive Wale Tinubu acknowledged that security challenges impacted production but noted that recent steps to boost output were starting to pay off, with a 36% production increase recorded within 30 days of acquiring new assets. “We remain on a steady path toward sustainable production growth and are committed to creating long-term value for our stakeholders,” Tinubu said.

Oando’s results for H1 2024 highlight the company’s adaptability amid disruptions as it pursues strategic initiatives to strengthen production, manage financial challenges, and maintain its standing in Nigeria’s energy sector.