Building An African Energy Empire
Wale and His African Energy Empire
Nigerian Wale Tinubu has risen to prominence in Nigeria, and by extension, Africa’s oil and gas sector. Wale comes from a nontraditional background as far as the oil and gas industry is concerned.Wale received his bachelors in law degree from the University of Liverpool in 1988 and a masters degrees in law from the London School of Economics in 1989. Following his admittance to the Nigerian bar, Wale started his career in corporate and petroleum law with K. O Tinubu-a his family’s law firm. Wale began building Sub-Saharan Africa’s first indigenous and integrated energy company when he co-founded an oil company called Ocean and Oil Limited. Wale’s company began by delivering fuel companies that had offshore drilling operation when offshore drilling was just taking off in Nigeria. At the time, the company only had one tanker. With a focus on customer service, the company was able to expand its customer base. Later Wale and his team began to make aggressive investments in the oil value chain, investing in assets such as pipelines. In 2001 Ocean and Oil Limited purchased 60% of Agip Nigeria Plc for over $ 72 million. Ocean and Oil Limited later changed its name to Oando Plc. Known for being visionary, ambitious, and having a penchant for taking calculated business risks, Wale is credited for leading Oando’s spectacular growth. In 2005, Oanda became cross listed on the Johannesburg stock exchange. Wale has led Oanda’s growth into a multi million dollar company with an African foot print that covers over five African countries.
With the recent downturn on global prices Oando has gone through some tough times. Over the years Oando has made ambitious investments in Oil assets that have become exposed to the tough global climate for commodities. In 2012, for instance Oando made a $ 1.5 billion acquisition of the Nigerian upstream oil and gas assets of the American firm ConocoPhillips. The deal gave Oando the offshore and onshore assets of Conoco Philips. With oil prices falling to less than 50 dollars per barrel, these have been anxious times for Oando and Wale. However, Wale argues that the company’s troubles are not a result of the Conoco Philips assets acquisitions. He defends the company’s post acquisition performance stating that Oando had generated cash flows up wards of $ 600 million from the transaction and that it had paid down its debts by about $400 million and achieved a 50% reduction in its investments costs.
Thus for Wale, Oando’s recent troubles are due to global falling prices and the weakening of the Naira. Wale has stated that with the recent stabilization of global oil prices, there has been renewed investor interest in Oando and cited a recent partnership which the company has gone into with Chevron, the US energy giant. Oando has also reportedly signed a $ 200 million recapitalization deal with a UK based investor. The upbeat Wale believes that Oanda will come back to profitability. Oil and gas industry watchers are looking out for Wale’s next moves.