Oil
Oando reports lower operating costs in nine-month financial results
Oando Plc has recorded a drop in production operating costs alongside higher output and improved profitability for the first nine months of 2026.
Key points
- Production operating costs declined by 22 per cent to $15.39 per barrel of oil equivalent.
- Average daily production increased by 14 per cent to reach 42,985 barrels of oil equivalent per day.
- Gross profit rose to N174.5bn while the company posted an operating profit of N159.7bn.
What happened
Oando Plc announced its unaudited financial results for the nine-month period ending September 2026, highlighting a reduction in unit operating expenses and increased output across its upstream assets. According to Punch reporting, the company lowered its production operating costs to $15.39 per barrel of oil equivalent, compared with $19.67 during the same period in the previous year. Average daily production grew to 42,985 barrels of oil equivalent, supported by better facility reliability and optimization across logistics, transportation, and technical services.
The company achieved an uptime of 96.1 per cent across its facilities during the review period. Crude oil output, natural gas volumes, and natural gas liquids all registered growth, contributing to higher total sales volumes. Financial metrics also improved significantly, with revenue climbing to N2.78tn and gross profit expanding compared to the previous year. Oando reversed earlier operating losses to post an operating profit for the period, while total borrowings decreased from peak levels recorded at the end of 2024.
Capital expenditure reached N110.7bn, primarily directed towards ongoing drilling operations in OMLs 60 to 63. Group Chief Executive Wale Tinubu noted that operational efficiencies and safety records remained strong, with zero fatalities or lost-time injuries reported across approximately 14.9 million hours worked.
What comes next
Oando is advancing its seven-well drilling programme for 2026, with several wells already completed and brought on stream. The final well is scheduled to spud in December 2026, and the company anticipates that the finished campaign will contribute additional gross production to help offset natural field declines. Management narrowed its full-year production guidance and projected capital expenditure aimed at short-cycle upstream activities. Additionally, the firm plans to pursue an equity raise to reduce leverage and support future growth.
Why it matters
Fuel exports accounted for 85.9 per cent of merchandise exports in 2025 according to World Bank figures, underlining the critical role that hydrocarbon production plays in the Nigerian economy. Improvements in operational efficiency and cost reductions by indigenous operators like Oando are vital for sustaining domestic production capacity amidst natural field declines. Enhanced upstream reliability strengthens the sector's financial resilience and supports broader energy investments in Nigeria.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
85.9% of Nigeria’s merchandise exports were fuels in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
