Oando Nigeria on Tuesday divested a 60 per cent stake in its downstream business (Oando Marketing Plc) to an African focused private equity group, Vitol and Helios Investment Partners for $276 million.
Oando, which is shifting away from marketer of refined petroleum products into oil and gas exploration, completed the acquisition of ConocoPhillips’s upstream oil and gas business in Nigeria last year.
Its downstream business, with a market share of 12 per cent in Nigeria, will become an independent entity, while retaining the Oando brand, the company said in a statement.
While Oando Group has 49 per cent of the company’s voting right, just as Vitol and Helios, leaving the remaining two per cent to an unnamed Nigerian Helios affiliate.
Oando’s downstream assets include more than 400 petrol stations in Nigeria and an interest in a bulk distribution company in Ghana, the statement added.
Soros-backed Helios has already partnered with Vitol to distribute Shell-branded fuels and lubricants in 16 African countries and is confident the new deal will capitalise on the three to five per cent annual growth in Nigerian demand for oil products.
Nigeria exports nearly two million barrels per day of oil but imports the bulk of its refined products because its refining capacity is unable to meet its daily fuel consumption of 40 million litres.
Vitol has bought downstream assets such as storage and refineries in Europe, most recently in conjunction with Carlyle Group in the Varo Energy venture.