The name, Wale Tinubu, has come to be synonymous with the name, Oando, both within and outside Nigeria. It is hardly possible to mention one without the other coming to mind, nor can one be separated from the other – something akin to a set of Siamese twins. A success story of the company cannot be complete without mention of the driver of that success.
Tinubu is the 50-year-old (on June 26) suave lawyer cum businessman who, as Group Chief Executive Officer, has brought Oando Plc, a Nigerian integrated energy company with investments in downstream, midstream and upstream operations, from obscurity to world attention. He has built the company into Africa’s leading indigenous energy solutions provider and one of the world’s top 100 oil and gas companies, in terms of reserves and production. He is the consummate oil tycoon who brought Oando Group from a $50 million-valued company in 2000 to one with a value of about five billion dollars as at 2014.
The journey to success
The journey to what is today a success story started in 2000, when Tinubu, with two others – Benedict Peters and Omamofe Boyo – led Ocean and Oil, a company of which he was the major founder, to acquire a 30 per cent stake in Unipetrol Plc. The company increased its stake in Unipetrol to 42 per cent in 2001 and, the following year, led the latter to bid for 60 per cent control of Agip Nigeria Plc, at the cost of $74 million, to form Oando Plc. Tinubu emerged managing director and chief officer of the new company, and has been the one piloting its affairs to attain its current enviable height.
He was instrumental to Oando becoming the first African company to be listed on the Johannesburg Stock Exchange, with a market capitalization of more than three billion South African rand. The company also listed its exploration and production subsidiary on the Toronto Stock Exchange, in a move that was aimed at sourcing different kinds of funding for its operations.
In 2005, the Group incorporated Oando Energy Services, an integrated oilfield services company, to achieve its objective of being a big player in the upstream sub-sector of the Nigerian oil industry.
Oando Energy Services acquired two oil drilling rigs in the Niger Delta in 2007 and, the following year, emerged Nigeria’s first indigenous company with interests in the production of deep water assets. This, it achieved, through acquisition of two oil blocks. By 2009, the company had acquired five swamp rigs.
In 2014, Tinubu led Oando to acquire American oil company, ConocoPhillips Nigeria, in a record deal of $1.7 billion. The move was aimed at diversifying the company’s business into the upstream sub-sector of the industry, where there is higher profitability.
Raising that amount of money was not a tea party, especially since Oando was looking to buy a company three times its size. The company had to engage in several rounds of fundraising to meet its target. It first started with a rights issue, then moved on to private placements, before organizing a corporate facility. This involved having up to six different work series running simultaneously. It was quite unprecedented in the industry, but highly successful.
This singular transaction made Oando the leading indigenous oil and gas producer in the country, and the first Nigerian company to become one of the partners in an onshore joint venture, thus putting it in the same club with oil giants like Shell, ExxonMobil, Chevron and Total.
The acquisition increased Oando’s oil production from 5,000 barrels per day (bpd) to 54,100 bpd, and is a significant step to turning the company into a full-fledged integrated oil exploration and production company.
The company started business by delivering fuel using a very old and slow World War II tanker that literally flowed with the tide – The Carolina – to companies that were involved in offshore drilling. Despite its difficult beginning and with virtually total absence of infrastructure, it was able to deliver supplies on time. Today, the company is set to become a major player in exploration and production.
Acquisition of ConocoPhillps has also shot the company’s margins from upstream operations up by 25 per cent, against the 1.9 per cent from downstream operations, the sector from where it commenced business.
The group sold 60 per cent of its downstream business to the Helios-Vitol Group in 2015 for $276 million, as part of an expansion programme aimed at consolidating its position in the industry.
Tinubu has demonstrated his understanding of the fact that risk taking is an integral part of business, especially in a complex and highly volatile industry like oil. He realized quite early that if Oando was to compete favourably with the big players in the industry and attain success, it must create its own regulatory framework where none existed, even if meant building its own infrastructure.
That was why the companyss wasted no time in building about 130 kilometers of pipelines in Lagos for channeling its products because there was none, even though the documentation with the regulatory authorities would later show that it built only 40 kilometers. That did not hinder its progress in providing the infrastructure it required to meet the demand for its products.
The company realized that in order to remain relevant, keep pace with competition and meet the demands of its clients, it needed to create the right environment by developing the regulatory framework by which it would be judged.
Tinubu was born in Eti Osa Local Government Area of Lagos State in 1967. He had his primary education also in Lagos, and attended the Federal Government College, Odogbolu, in Ogun State. He proceeded to the University of Liverpool, where he graduated with a degree in Law in 1988, and later obtained a master’s degree in the same discipline from the London School of Economics in 1989, before returning home to enroll at the Nigerian Law School from where he was called to the bar in 1990.
He began his career with a law firm that belonged to his family – K. O. Tinubu and Company – where he specialized in corporate and petroleum law. He left the law firm in 1994 to co-found Ocean and Oil, thus beginning a journey into the highly lucrative but volatile oil industry.
Tinubu’s success and phenomenal rise to the top has fetched him quite a handful of awards and recognitions. But the outstanding ones include The King of African Oil, by Forbes magazine; One of the Top Ten CEOs in the World, by ASKMEN; Young Global Leader, by the World Economic Forum (January, 2007); African Business Leader of the Year 2011, by Africa Investor and Leadership Business Person of the Year 2014.
It is a measure of Inubu’s competence, depth and knowledge of international business issues that he has been invited to speak at such international fora as the World Economic Forum and the Columbia University, in the United States, where he headlined the annual African Economic Forum as a keynote speaker, alongside Raila Odinga, former prime minister of Kenya.