Oando Expands Abroad with Trinidad Refinery Lease, Stakeholders Raise Concerns Over Lack of Local Investment

Confidence UbaniMarch 24, 20252 Mins read181

Oando Plc’s decision to lease the Guaracara Oil Refinery in Trinidad and Tobago has raised concerns among stakeholders in Nigeria’s oil industry. The move suggests a shift towards foreign markets and exchange earnings rather than investment in local refining capacity.

Trinidad Petroleum Holdings Ltd (TPHL) confirmed that Oando Trading, a subsidiary of Oando Plc, was selected as the preferred bidder for the lease. Trinidad’s Minister of Energy announced on 27 February 2025. However, many in the Nigerian oil sector question why Oando prioritises expansion abroad instead of supporting local refineries. Dangote and BUA have operational capacities of 500,000 and 200,000 barrels per day, respectively. Unlike the government’s Port Harcourt and Warri refineries, these refineries are fully functional.

A recent publication by Proshare, a research and information platform, described Oando’s lease as a “gambit” that “appears strategically instructive,” though it did not specify the source of this characterisation. The report suggests, through expert opinions and analysis, that Oando’s strategy leans more towards oil trading than production. The Guaracara Oil Refinery is close to oil-rich countries like Guyana, Suriname, and Brazil, which have a combined output of 4 million barrels per day. This location could enable Oando to source crude oil and trade refined products across the Caribbean and possibly sub-Saharan Africa.

West Africa Weekly notes that this mirrors a broader trend of midstream and downstream oil firms expanding their refining capacities overseas through joint ventures. By doing so, they avoid local market challenges while increasing market share. The concern is particularly relevant given that Oando allegedly benefits so much from the Nigerian government.

Oando, controlled by President Bola Tinubu’s nephew, Wale Tinubu, has been known to secure lucrative deals and government contracts within Nigeria, reinforcing its dominance in the oil and gas sector.

In November 2024, the company reported a profit-after-tax of ₦60.3 billion for 2023, a significant turnaround from an ₦81.2 billion loss in 2022. Revenue rose by 43 per cent to ₦2.84 trillion, while profit-before-tax surged by 267 per cent to ₦102.97 billion. However, its cost of sales consumed 97 per cent of revenue, limiting gross profit growth to ₦85.02 billion.

Oando’s financial gains coincided with major acquisitions. In August 2024, the company completed a $783 million purchase of Nigerian Agip Oil Company (NAOC) from Italian energy firm Eni. Reports suggest that this deal was linked to Eni’s return to the controversial OPL 245 oil field in partnership with Shell. Oando’s subsidiary, OVH Energy Marketing Limited, also took over NNPC’s retail arm, further strengthening its position in Nigeria’s energy sector.

Under Wale Tinubu, Oando’s market value soared from ₦74 billion in 2023 to ₦1 trillion by September 2024. Its share price increased from ₦6 to ₦92 within a year, making it one of the top 10 most valuable companies on the Nigerian Stock Exchange. These developments have led to speculation about whether Oando’s success is linked to political influence. Many businesses struggle in Nigeria’s challenging economic climate, yet Oando has experienced rapid expansion.

Although the company has denied receiving preferential treatment, its growing dominance in the oil and gas sector, alongside its shift towards foreign investments, has raised concerns. Some observers and stakeholders now question Oando’s priorities and long-term commitment to Nigeria’s energy industry.

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