Oando, Shell and Agip Work Out Interest in OML 125 and 134 Offshore Nigeria

On Feb. 25, 2008, Oando advised that it had entered into a sale and purchase agreement to acquire Shell's Nigeria Exploration and Production's 49.8% stake in two oil blocks namely OMLs 125 and 134, subject to a waiver of pre-emption rights by Agip and approval by the government.

On April 1, 2008, Shell advised Oando that Agip has indicated its intent to exercise its pre-emption right on the same terms and conditions as agreed with Oando pursuant to the Joint Operative Agreement with Shell. Oando has in turn immediately expressed its willingness to work with Agip to explore collaborative opportunities and remain confident of a positive outcome.

The two deepwater blocks offshore Nigeria were won (subject to appropriate approvals) by Oando in an international competitive bidding process. OML-125 currently produces 18,000 barrels a day of oil from the Abo field combined with near term production growth and high potential exploration acreage to complement Oando’s existing upstream position. OML-134 although still in exploration phase, has already recorded significant discoveries.