annual reportannual report 2009 · 2010. 10. 9. · 2009 annual report & accounts. 4 vision to...

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Annual ReportAnnual ReportAnnual ReportAnnual ReportAnnual Report 2009

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Notice of Annual General Meeting 6

Financial Highlights 8

Chairman’s Report 9

Group Chief Executive’s Report 11

Report of the Directors 28

Report of the Audit Committee 54

CONTENTCONTENTCONTENTCONTENTCONTENT

2009ANNUAL REPORT

& ACCOUNTS

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VisionTo be the premier company

driven by exellence

MissionTo be the leading integrated

energy solutions provider

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BOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORS

Major General M. Magoro (Rtd.)PSC, OFR - Chairman, Non-Executive DirectorGaladiman Zuru

Mr. Jubril Adewale Tinubu -Group Chief Executive

Mr. Omamofe Boyo-Deputy Group Chief Executive

Mr. Mobolaji Osunsanya-Group Executive Director

Mr. Olufemi Adeyemo-Group Executive Director11111

Mr. Ademola Akinrele SAN-Non-Executive Director

Chief Sena Anthony-Non-Executive Director22222

Chief Felix Atako J.P.-Non-Executive Director33333

Mr. Navaid Burney-Non-Executive Director

HRM Michael A. Gbadebo, CFR,-Non-Executive DirectorThe Alake of Egbaland

Mr. Valentine Oboden Ibru-Non-Executive Director

Alhaji Hamidu. Mahmud Walin Mubi --Non-Executive Director

Mr. O. P Okoloko-Non-Executive Director

Mr. Ike Osakwe-Non-Executive Director33333

Ms. Amal Inyingiala Pepple CFR-Non-Executive Director22222

Ms. Genevieve Sangudi-Non-Executive Director22222

1 1 1 1 1 Elected 30 July 200922222 Appointed 31 January 201033333 Retired 30 July 2009

PROFESSIONAL ADVISERS:PROFESSIONAL ADVISERS:PROFESSIONAL ADVISERS:PROFESSIONAL ADVISERS:PROFESSIONAL ADVISERS:

Chief Compliance Officer & Company SecretaryOredeji K. Delano (Mrs.)

Chief Financial Officer,Mr. Olufemi Adeyemo

Chief Legal Officer,Mrs. Ronke Sokefun

Registered Office:Registered Office:Registered Office:Registered Office:Registered Office:2, Ajose-Adeogun Street,Victoria Island, Lagos

Auditors:Auditors:Auditors:Auditors:Auditors:PricewaterhouseCoopers,252 E, Muri Okunola Street,Victoria Island, Lagos

The Registrars & TransferThe Registrars & TransferThe Registrars & TransferThe Registrars & TransferThe Registrars & TransferOfficesOfficesOfficesOfficesOffices:First Registrars Nigeria Limited,Plot 2, Abebe Village Road,Iganmu, Lagos

Computershare Investor Services(Proprietary) Limited, 70,Marshall Street, Johannesburg,2001, PO Box 61051, Marshalltown,2107, South Africa

BANKSBANKSBANKSBANKSBANKS

Access Bank PLCAccess Bank, UKAfribank PLCBNP Paribas , ParisCitibank, UKCitibank Nigeria PLCDiamond Bank PLCEcobank PLCFidelity Bank PLCFirst Bank of Nigeria PLCFirst City Monument Bank PLCFirst Securities Discount House (FSDH)Guaranty Trust Bank PLCIntercontinental Bank PLCKakawa Discount House (KDH)Oceanic International Bank PLCStandard Chartered Bank Nigeria LimitedStandard Chartered Bank PLC, UKStanbicIBTC Bank PLCStandard Bank, LondonSterling Bank PLCUnion Bank of Nigeria PLCUnited Bank for Africa PLCUnited Bank for Africa, New YorkWEMA Bank PLC Zenith Bank PLC

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NONONONONOTICE IS HEREBY GIVENTICE IS HEREBY GIVENTICE IS HEREBY GIVENTICE IS HEREBY GIVENTICE IS HEREBY GIVEN that the 33rd Annual General Meeting ofOando PLC (the “Company”) will be held at The Landmark VillageEvents Centre, Water Corporation Road, Off Ligali Ayorinde, VictoriaIsland, Lagos, Lagos State, Nigeria on Friday, the 7th day of May 2010at 10:00 a.m. for the purposes of:

1.1.1.1.1. Transacting the following ordinary business:Transacting the following ordinary business:Transacting the following ordinary business:Transacting the following ordinary business:Transacting the following ordinary business:

1.1 To present the annual financial statements of the Companyand of the group for the year ended 31 December 2009 andReports of Directors and Auditors thereon;

1.2 To receive the Report of the Audit Committee;

1.3 To declare the dividend of N3.00 recommended by thedirectors of the Company;

1.4 To elect members of the Audit Committee;

1.5 To re-appoint the Auditors;

1.6 To authorise the Directors of the Company to fix theremuneration of the Auditors;

1.7 To elect the following Directors appointed to the Board ofDirectors of the Company with effect from January 31, 2010as Directors. In accordance with Article 88 of the Articlesof Association of the Company (“the articles”), their termsexpire but being eligible offer themselves for election.

• Chief Sena Anthony• Ms. Amal Inyingiala Pepple CFR• Ms. Genevieve Sangudi

(Please refer to pages 36-37 of the annual report, of which thisnotice forms part, for brief curriculum vitae of each Director).

1.8 To re-elect the following Directors who in accordance withArticles 91 and 93 of the Company’s Articles of Association,retire by rotation, but are eligible and offer themselves forre-election:

• Major General Mohammed Magoro (Rtd), OFR, PSC,USAWC, Galadiman Zuru

• Mr. Omamofe Boyo• Mr. Mobolaji Osunsanya• Mr. Navaid Burney

(Please refer to pages 37-39 of the annual report of which thisnotice forms part for a brief curriculum vitae of each director).

22222 Transacting the following specialTransacting the following specialTransacting the following specialTransacting the following specialTransacting the following specialbusiness:business:business:business:business:(i) To consider, and if approved, to

pass with or withoutmodification, the followingordinary resolution to fix theremuneration of the Non-Executive directors:“It is hereby resolved that thefees payable to the Non-Executive directors of theCompany be increased fromN1,000,000.00 per annum forthe Chairman and N900,000.00each per annum for all otherNon Executive directors toN2,500,000 per annum for theChairman and N2,000,000 forall other non- executivedirectors with effect from 1 January 2010 which fees arepayable quarterly in arrears”.

(ii) To consider, and if approved, to pass with or withoutmodification the following ordinary resolution:

“That on the recommendation of the Directors and inaccordance with Article 46 of the Articles of Association ofthe Company the Authorised Share Capital of the Companybe and is hereby increased from N1,000,000,000.00 (OneBillion Naira) to N3,000,000,000.00 (Three Billion Naira) bythe creation and addition thereto of 4,000,000,000 newordinary shares of 50 kobo each ranking in all respects paripassu with the existing shares of the Company and thatclause 6 of the company’s Memorandum of Association andarticle 3 of the Company’s Articles of Association be andare hereby amended to reflect the new Authorised ShareCapital of N3,000,000,000.00 (Three Billion Naira) dividedinto 6,000,000,000 (Six Billion) ordinary shares of 50 koboeach”.

(iii) To consider, and if approved, to pass with or withoutmodification, the following ordinary resolution:

“Resolved on the recommendation of the Directors and inaccordance with Article 141 of the Company a sum ofN301,694,876 out of the balance standing to the credit ofGeneral Reserve as at the year ended 31st December 2009be capitalized and that the Directors be and are herebyauthorized to appropriate the said capitalized sum ofN301,694,876 to the members holding the shares of thecompany at the close of business on 20 May 2010 in theproportion of 1 ordinary share of 50kobo for every 2 ordinaryShares of 50k each held by them on that day on condition

NOTICE OF ANNUAL GENERAL MEETINGNOTICE OF ANNUAL GENERAL MEETINGNOTICE OF ANNUAL GENERAL MEETINGNOTICE OF ANNUAL GENERAL MEETINGNOTICE OF ANNUAL GENERAL MEETING

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that the new capitalised sum of N301,694,876 be not paidin cash to members holding Ordinary Shares but appliedon their behalf in paying up in full at par 603,389,752 sharesof 50k each now issued to be allotted, distributed andcredited as fully paid up to amongst the said members inthe proportions aforesaid.”

Voting and ProxiesVoting and ProxiesVoting and ProxiesVoting and ProxiesVoting and ProxiesOn a show of hands, every member present in person or by proxy shallhave one vote, and on a poll, every member shall have one vote foreach share of which he is the holder.

A member of the Company entitled to attend and vote at the AnnualGeneral Meeting (the “Meeting”) is entitled to appoint a proxy to attend,speak and vote instead of that member. A proxy need not be a memberof the Company.

Registered holders of certificated shares and holders of dematerialisedshares in their own name who are unable to attend the Meeting andwho wish to be represented at the Meeting, must complete and returnthe attached form of proxy in accordance with the instructions containedin the form of proxy so as to be received by the share registrars, FirstRegistrars Nigeria Limited at Plot 2, Abebe Village Road, Iganmu,Lagos, or Computershare Investor Services (Proprietary) Limited, 70,Marshall Street, Johannesburg, 2001, South Africa, PO Box 61051,Marshalltown, 2107, not less than 48 hours before the time of theMeeting.

Holders of the Company’s shares in South Africa (whether certificatedor dematerialised) through a nominee should timeously make thenecessary arrangements with that nominee or, if applicable, CentralSecurities Depository Participant (“CSDP”) or broker to enable themto attend and vote at the Meeting or to enable their votes in respect oftheir shares to be cast at the Meeting by that nominee or a proxy.

Dividend PaymentDividend PaymentDividend PaymentDividend PaymentDividend PaymentIf the dividend recommended is approved and declared, thoseshareholders whose names appear in the Company’s Register ofMembers kept in Nigeria as at the close of business on 20th of April,2010, shall have dividend warrants posted to them or have their

designated bank accounts credited directly on the 31stday of August2010. Dividends due to Shareholders whose names appear on theSouth African Register of Members at the close of business on the20th of April 2010 (certificated or dematerialized), will, on the 31st ofAugust 2010, either be electronically transferred to shareholders’ bankaccounts or, in the absence of suitable mandates have dividend chequesposted to them, or will have their accounts, at their CSDP or brokercredited.

Closure of Registers of MembersClosure of Registers of MembersClosure of Registers of MembersClosure of Registers of MembersClosure of Registers of MembersThe Registers of Members and Transfer Books of the Company(Nigerian and South African) will be closed between the 21st April 2010and 27th April 2010 (both days inclusive) in terms of the provisions ofSection 89 of the Companies and Allied Matters Act Cap. C20 Laws ofthe Federation 2004 (the “Companies Act”).

Nomination for the Audit CommitteeNomination for the Audit CommitteeNomination for the Audit CommitteeNomination for the Audit CommitteeNomination for the Audit CommitteeIn accordance with Section 359 (5) of the Companies Act, any membermay nominate a shareholder as a member of the Audit Committee, bygiving notice in writing of such nomination to the Company Secretaryat least 21 days before the Meeting.

Dated this 14Dated this 14Dated this 14Dated this 14Dated this 14ththththth day of April 2010 day of April 2010 day of April 2010 day of April 2010 day of April 2010

By the Order of the BoardBy the Order of the BoardBy the Order of the BoardBy the Order of the BoardBy the Order of the Board

Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)

Chief Compliance Officer & Company Secretary

Registered OfficeRegistered OfficeRegistered OfficeRegistered OfficeRegistered Office

2, Ajose Adeogun StreetVictoria Island, Lagos

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20092009200920092009 20082008200820082008

N’000 N’000

Turnover 336,859,678 339,420,435

Profit on ordinary Activities before taxation 13,512,155 10,742,611

Profit After Tax 10,096,979 8,343,325

Attributable to group 10,243,168 8,339,273

Attributable to minorities (146,189) 4,052

Earnings per 50 share (Naira) 11.32 9.22

Dividend per 50 k share- proposed (Naira) 3 6

Net Assets per 50 k share 58.92 49.60

Dividend cover 3.72 1.15

FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

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that the world economy is no longer threatened by the possibility ofunravelling and falling into a depression. At the end of 2009, hopeemerged.

NigeriaNigeriaNigeriaNigeriaNigeriaOil receipts decreased, as a result of both a reduction in oil productionand oil prices, leading to a decline in revenue. Throughout the year,Nigeria did not meet its OPEC quota due to the reduced oil productionby the International Oil Companies, which were continuously plaguedby the militant activity in the Niger Delta. However, during the year, theFederal Government advanced settlement talks with militants in theNiger Delta region by extending an amnesty, which led to a ceasefire.The ceasefire has been effective and led to an increase in Nigeria’s oiloutput as oil production commenced in areas that were previouslyinaccessible due to militant activities. As a result, Nigeria met her OPECquota in December. Unfortunately, the deregulation of the downstreamsector of the oil industry by the Federal Government has still notmaterialized. Worse still the government continues to delay in itspayment of Petroleum Support Funds (PSF), creating a difficultoperating environment for downstream operators who are unable tomanage working capital efficiently. At the end of 2009, this resulted incession of importation by downstream operators, translating to fuelqueues at filling stations for Nigerians. All PSF claims have now beensettled and a sovereign guarantee programme instituted to providesecurity for private sector imports. Progress has been made on thelegislation of the Petroleum Industry Bill as the bill has passed a secondreading in both chambers of the National Assembly and it is expectedthat the bill will be passed into law during 2010.

The year under review was a transformative year for the Nigerianbanking industry. The appointment of a risk management professionalas the Governor of the Central Bank of Nigeria propelled the industryinto a period of widespread reforms. The apex bank conducted a specialaudit of the banks in the country on the basis of liquidity, capitaladequacy and corporate governance. 14 of the 24 banks in the countrypassed the audit, while 1 bank had sufficient liquidity, but fell short ofthe statutory required capital adequacy, 9 banks were categorized asbeing in a grave situation, meaning that the banks were undercapitalized, had insufficient liquidity and poor corporate governance.The CBN acted to stem any negative effects of this pronouncement byinjecting N620 billion into the 9 affected banks, reducing statutory limitsfor banks, guaranteeing inter-bank placements and assuring the publicthat no bank would be allowed to fail.

During 2009, inflation experienced a period of continued reduction aswell as a period of continued increment. At the beginning of the yearinflation dropped consistently, reaching 10.4% in September 2009, froma 2 year high of 15.1% as at December 2008. This decrease was as aresult of the reduction in economic activity due to tightened liquidityand government expenditure which reduced revenue. But as a resultof expansionary fiscal policy of the government implicit in the US$2Bnstimulus package and the CBN’s injection of liquidity into 8 banks,

CHAIRMAN’S REPORTCHAIRMAN’S REPORTCHAIRMAN’S REPORTCHAIRMAN’S REPORTCHAIRMAN’S REPORT

Highly Esteemed Shareholders,Highly Esteemed Shareholders,Highly Esteemed Shareholders,Highly Esteemed Shareholders,Highly Esteemed Shareholders,

It is with great pride that I welcomeyou to the 33rd Annual GeneralMeeting of your company.

The year 2009, began with severeuncertainty, as the effects of theglobal economic downturn werebeginning to affect the Nigerianeconomy. Reduced oil prices and adepreciated naira made it clear thatNigeria was not immune to the crisisoccurring in the global economy. Thisnotwithstanding, we have cause tobe proud of the successes that your

company has recorded in what has been an exceedinglychallenging and constantly changing operating environment. Weincreased our bottom line without eroding the talents that makeus strong and competitive. Our strategy, to diversify our incomestreams in line with our mission to be the Leading IntegratedEnergy Solutions Provider yielded benefits as the upstream sectorcontributed considerably to earnings.

Global EconomyGlobal EconomyGlobal EconomyGlobal EconomyGlobal EconomyIn 2009, the world experienced the most pronounced effects ofthe global recession since it began in 2007. It is estimated thatthe global economy contracted by 1.1% during 2009, the firstannual decline in world output in more than 50 years. Majordeveloped nations experienced negative GDP growth rate, Russia(-7.9%), Japan (-5.7%), European Union (-4%) and the UnitedStates (-2.4%), while in contrast and in line with recent trends,emerging economies maintained impressive growth rates, withChina (+8.4%), India (+6.1%) and Indonesia (+4.4%) recordingthe biggest gains among major countries.

2009 was a year of two parts, statistics from the first half of theyear indicate the abysmal state of the global economy in the thickof the recession, while statistics for the second half show thepossibility of a recovery. In the beginning of 2009, asset valuationsreduced considerably; liquidity tightened significantly, causinglending to all but cease, and demand for goods fell, specificallythe demand for oil dropped, the sharpest decline in over 2 decades.Many governments reacted swiftly in order to prevent a collapseof the financial and economic systems. By the end of 2009 demandfor goods in Asia, led by China, increased, causing many analyststo postulate an end to the recession and to predict that 2010 wouldmark the turning point and possibly the beginning of globalexpansion. Other analysts point to continued unemployment andweak demand in America, the world’s super power, and in Europe,leading to concerns over a “jobless recovery” and possibility of adouble dip recession. However, there is unanimous agreement

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inflation recorded a significant increase in October 2009, increasingby 120bps over the previous month and continued a steady increasefor the remainder of the year.

Similarly, interest rates were volatile in 2009, at the beginning of theyear, the liquidity squeeze and reluctance of banks to lend contributedto the increase of inter-bank lending rates to 29.5% in March 2009.July 2009 saw a steep decline in interest rates as the CBN Governoreradicated the perception of counter party risks amongst banks byguaranteeing all inter-bank placements until March 2010. Inter-bankplacing rates reduced to as low as 4%. Despite low placing rates,lending rates still remain high.

The activities in the banking sector greatly hampered our activities asborrowing was significantly reduced during the period under review.However, we hope that the pain of the wide sweeping reforms thatrocked the financial sector would lead to a stronger, more stable sourceof capital in Nigeria.....

The BoardThe BoardThe BoardThe BoardThe BoardIn compliance with Corporate Governance and best practices, AlhajiHamidu Mahmud, an independent Non Executive Director, who hasserved on the Board for nine years, will not be presenting himself forre-election this year. Alhaji Mahmud was the Chairman of the AuditCommittee and a member of the Governance and NominationsCommittee. Mr. Ademola Akinrele SAN, a Non Executive Directorwho has also served on the Board for nine years, will not be presentinghimself for re-election. Mr. Akinrele SAN was the Chairman ofGovernance and Nominations Committee.

On behalf of the Board, and the Company, I wish to express our sinceregratitude and appreciation for the contributions of Alhaji Mahmud andMr. Akinrele SAN during their tenure. We truly value their commitmentand valuable contributions to the success of Oando and wish them the

very best in all their future endeavours. Furthermore, to ensure that the composition of the Board of Directorscomplies with international best practices, the following new Directors,Chief Sena Anthony, Ms. Amal Pepple, CFR and Ms. GenevieveSangudi were appointed in January 31, 2010 in accordance with Article88 of the articles of association of the Company. I am pleased to informmembers that all the new Directors are females with vast experiencein the oil and gas and finance sectors.

Oando e-Dividend, e-Report and e-Bonus CampaignOando e-Dividend, e-Report and e-Bonus CampaignOando e-Dividend, e-Report and e-Bonus CampaignOando e-Dividend, e-Report and e-Bonus CampaignOando e-Dividend, e-Report and e-Bonus CampaignIn our usual innovative and pioneering manner, your company embarkedon various electronic initiatives for efficient, and timely communicationwith you, our shareholders (e-Dividend, e-Report, e-Bonus etc) furtherto your approval at the 32nd AGM. Pursuant upon this, bulk SMS weredeployed to ensure current and accurate information were collated fromshareholders for effective communication.

I therefore implore you to support and take full advantage by signingup to these options immediately. These will ensure you get informationabout your company in a timely manner and consequently increaseshareholder value by eliminating inefficiencies.

The 2010 OutlookThe 2010 OutlookThe 2010 OutlookThe 2010 OutlookThe 2010 Outlook2010, will be a year of immense growth for the company as we positionourselves to take full advantage of the policies that have been formulatedand are about to be passed by the Federal Government of Nigeria onlocal content initiatives. With a clearly defined focus, strategy andflawless execution we will deliver and surpass all past results and builda truly world class company.

Thank you

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This year the programme received an overwhelming response fromthe public with over 28,000 applications. The GTP programme will onlyaccommodate the top 20 candidates, who will be assessed throughrigorous tests and interviews. The 2nd batch of GTPs are expected tocommence their programme in April 2010.

Oando Mentoring ProgrammeOando Mentoring ProgrammeOando Mentoring ProgrammeOando Mentoring ProgrammeOando Mentoring ProgrammeThe Oando Mentoring programme was refreshed in 2009 with the focusof enabling employees imbibe the Oando core values as defined underTRIPP, to create a sense of belonging and foster company loyalty. Theprogramme presents a formal and structured setting in which beneficialone on one relationship between employees and their mentors aredeveloped, through friendship and guidance with the mentors sharingrelevant past experiences.

ISO 9001:2000 CertificationISO 9001:2000 CertificationISO 9001:2000 CertificationISO 9001:2000 CertificationISO 9001:2000 CertificationIn the year under review, our Gas and Power division received theendorsement of the International Standard Organization (ISO) for itsworld class operations and service delivery with the award of theprestigious ISO 9001:2000 certification.

ISO 9001:2000 is a quality management system that demonstratesthorough documentation, that a company is quality conscious and isable to meet the quality needs of its customers. The underlining featuresare management responsibility, resource management, productrealization, monitoring, analysis and continuous improvement.

The award of the ISO 9001:2000 certification to Gas and Power waspreceded by a series of rigorous and extensive audit of the company’sAbove Ground Installations’ (AGI), pipelines installations andoperational procedures by inspectors from the Standards Organizationof Nigeria (SON).

Other uncertified divisions have commenced implementation of thenecessary processes needed to attain certification and work towardsbeing certified in the year 2010 in line with International best practicesand world class operations.

Convention on Business IntegrityConvention on Business IntegrityConvention on Business IntegrityConvention on Business IntegrityConvention on Business IntegrityOur company signed unto the Convention on Business Integrity (CBI).The CBI is a covenant among businesses operating in Nigeria to builda private sector coalition against corrupt practices. The company alreadyhas a self policing structure that ensures that the corporate value systemsupports acceptable ethical and moral standards by way of codes andpolicy statements. The signing of the convention is Oando’s publicdeclaration of adherence to the Code of Business Integrity.

‘Adopt-A-School’ Program‘Adopt-A-School’ Program‘Adopt-A-School’ Program‘Adopt-A-School’ Program‘Adopt-A-School’ ProgramYour company also boosted its Corporate Social Responsibility (CSR)initiative by including an additional seventeen (17) schools in its Adopt-A-School scheme. These schools are situated in locations withinOando’s local operating environments.

Dear Esteemed Shareholders,Dear Esteemed Shareholders,Dear Esteemed Shareholders,Dear Esteemed Shareholders,Dear Esteemed Shareholders,

It is a privilege for me to give you the firstreview of Oando’s performance for theyear 2009. I am proud to report that evenin the turbulent global and local economicoperating conditions, your company wasable to excel and outperform our previousyears.

The diversified nature of your companyallowed it to benefit from new streams ofincome in the Upstream and Midstream,as the older foundational downstreamexperienced unprecedented operationaland financial challenges.

Our turnover decreased by 0.8% fromN339.42billion in 2008 to N336.9billion in

2009, due to uncertainties in government policies on deregulation ofthe Downstream and the delayed Petroleum Support Fund payments.The reduced turnover did not adversely affect our Profit After Tax (PAT),which increased by 21% from N8.34billion in 2008 to N10.09billion in2009. This increase in profitability is attributed to the Upstream andMidstream’s additional contributions during the year:

1. The deployment of the company’s first swamp rig to commence adrilling contract with a major oil company;

2. The further development of our oil & gas assets which ramped upour daily production; and

3. The expansion of the local gas pipeline network which increasedour gas supply and customer base.

Our results further evidences the need for our company to amplify itsefforts of diversification in line with its mission to be a truly integratedservice provider.

Leadership Development ProgramLeadership Development ProgramLeadership Development ProgramLeadership Development ProgramLeadership Development ProgramIn 2009, the depth of the leadership development programme wasstrengthened with the compilation of succession plans and highpotential employee nominations from the different entities. This processis now a bi-annual exercise, executed post the performance appraisalcycles.

Graduate Trainee Program (GTP)Graduate Trainee Program (GTP)Graduate Trainee Program (GTP)Graduate Trainee Program (GTP)Graduate Trainee Program (GTP)Oando successfully completed its maiden GTP programme with theintegration of the successful 11 candidates into the different businessesacross the Group. This further reiterates the company’s focus onidentifying talent, growing and nurturing them with the core values ofthe organization, Teamwork, Respect, Integrity, Professionalism andPassion (TRIPPTRIPPTRIPPTRIPPTRIPP).

GROUP CHIEF EXECUTIVE’S REPORTGROUP CHIEF EXECUTIVE’S REPORTGROUP CHIEF EXECUTIVE’S REPORTGROUP CHIEF EXECUTIVE’S REPORTGROUP CHIEF EXECUTIVE’S REPORT

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Our performance by sector:

DownstreamDownstreamDownstreamDownstreamDownstream

Oando Marketing Limited (OML)Oando Marketing Limited (OML)Oando Marketing Limited (OML)Oando Marketing Limited (OML)Oando Marketing Limited (OML)Oando Marketing remains the nation’s leading oil retailer, with its retailoutlets numbering over 600 coupled with its expanding commercialbusiness focused on meeting the needs of companies across allindustries. With strategically located terminals and an ever improvingdistribution network, the company has ensured that its productsincluding PMS, HHK, AGO, Lubes, LPFO, ATK, LPG, Bitumen andInsecticides have continued to meet the increasingly demanding needsof its esteemed customers

Review of 2009Review of 2009Review of 2009Review of 2009Review of 20092009 witnessed a general lull in the socio-economic environment aswhole, owing to various adverse shocks that took place during the year.Low crude oil prices coupled with the Niger Delta unrest influencedgovernment’s decision to pursue a contractionary monetary policy. Thisadopted monetary policy put an adverse strain on overall liquidity andcoupled with the hike in inflation which stood at 12.4% compared to9.8% experienced in 2008 served to reduce GDP growth and overallbusiness activity.

The liquidity squeeze and government’s decision to deregulate thedownstream sector also heightened the level of business uncertaintyexperienced in the year. The reduction of credit by banks reduced theproduct importation capacity of most product importers, therebyaffecting product supply during the period. The inland refineries alsooperated at about 30% of their capacity and could do little to bridge thesupply gap. The position was made worse by the inability of thegovernment to announce a clear path for deregulation, as well as payimporters for past subsidy entitlements from the Petroleum SubsidyFund. As a result, PPMC remained the largest (and for the last quarter,sole) importer of PMS but volumes supplied were insufficient asevidenced by the return of fuel queues at filling stations across thecountry.

The poor state of inter/intra state roads equally continued to provedisruptive to product distribution. Road transportation accounts forabout 90% of the product distribution channel (i.e. via trucks) and agood number of sales were lost as a result of and the frequent inabilityof trucks to access certain locations due to the bad road network.

In spite of these challenges, the company strove to create value byfocusing on improving cash flow management by introducing an online,real time dealer payment system which took a full day out of the orderto cash cycle. Furthermore, we improved the quality of receivables bylimiting credit facilities to blue chip companies only, thereby reducingbad debt provision significantly. Lastly, we successfully worked to realisethe benefits of our ERP system, thus delivering clear reductions infixed costs and vastly improving stock management and integrity.

Review of Financial Performance 2009Review of Financial Performance 2009Review of Financial Performance 2009Review of Financial Performance 2009Review of Financial Performance 2009Oando Marketing delivered a turnover for the year ended December31st 2009 of N163.3billion (10% below 2008 performance) and a PATof N2.7billion (13% below 2008 performance).

Product ReviewProduct ReviewProduct ReviewProduct ReviewProduct Review

Total White ProductsTotal White ProductsTotal White ProductsTotal White ProductsTotal White ProductsPMSPMSPMSPMSPMS volumes suffered from government’s unclear position onderegulation and non-payment of marketer’s PSF arrears during theperiod under review, and supply gaps were rampant due to reductionin private imports. The supply situation also resulted in throughputexposures at our 3rd party operating facilities. As a result, sales volumefor the period was 3% lower than 2008.

AAAAAGOGOGOGOGO volumes during the period were affected by inconsistent supplyarising from the difficulty for most traders in securing credit from banksto import due to the general liquidity squeeze. This, in addition to therisks from the volatile nature of the product price, resulted in low stockholding by marketers generally. Oando also focused on liquidatingexisting receivable balances with major marine customers and thisaffected the marine AGO volumes recorded in the period. Marginshowever remained strong throughout the period. Volume sold in 2009was 11% lower than 2008.

HHKHHKHHKHHKHHK volumes continued to suffer from product supply issues andconstant stock outs were witnessed throughout the period under review.Government’s decision to peg the unit price of the product at retailoutlets, limit PSF support to NNPC for the second part of the year andto direct their supply primarily to independents, made sales extremelydifficult as the unit cost of importing the product exceeded thegovernment approved pump price. Volume sold during the period was37% lower than 2008.

Other Products (Lubricants, Specialities)Other Products (Lubricants, Specialities)Other Products (Lubricants, Specialities)Other Products (Lubricants, Specialities)Other Products (Lubricants, Specialities)Lubricants Lubricants Lubricants Lubricants Lubricants sales volume suffered a 6% dip compared to 2008, largelydue to reduced PMS availability at the forecourts and reduced marinesales during the period in review. Focus has continued to remain onexpansion in new non-forecourt channels to ensure unit marginprotection in a highly competitive environment. Oando Marketing hasgeared up in response to the government’s ban on bulk sales in 2010and with our state of the art blending plant in Kaduna, we are set fair togrow market share in the near future.

LPG LPG LPG LPG LPG volumes grew by 93% in the period under review based onimproved supply from relationships with key suppliers. 2009 alsowitnessed the launch of the Oando Pay-As-You Gas initiative inconjunction with Banner Gas, with the roll out of LPG dispensing pumpsat 10 retail outlets in key locations across the country and a roll outplan for 20 new plants in 2010.

ATK ATK ATK ATK ATK sale volumes improved by 3% and cash margins by 125%compared with performance the previous year. The success could be

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attributed to efficient product sourcing and adequate stockmanagement which provided opportunities to service competitor’sobligations at profitable margins with a reduction in the lossesexperienced in prior years in support of the nation’s aviation industry.

2010 Outlook2010 Outlook2010 Outlook2010 Outlook2010 OutlookDespite the uncertainties surrounding government policy onderegulation and the continued liquidity squeeze, OML’s resolve tocontinue to create value for all stakeholders remains unabated. ThePetroleum Industry Bill currently before the National Assemblycontinues to receive close monitoring as your company thrives to exploitopportunities embedded in the bill intended to sanitise the oil and gassector.

Improving operational efficiency remains priority as the company seeksto continue to leverage on measures introduced in previous years,especially in the areas of product sourcing and distribution. Emphasishas been placed on ensuring customers receive improved servicedelivery at all locations, with the revamp of the Customer Care Unit inlate 2009.

Other focus initiatives for 2010 include:• Pioneering AGO Value Added Peddling services with pre-identified

target customers such as telecommunications companies, banks,hotels, restaurants and facility management companies

• Maximizing revenue from retail outlets by identifying and deployingat least three NFR bundles to each station.

• Engaging key strategic distributors to off take large volumes of ourinsecticides and aggressively grow our share of the market.

• Improving relationships with suppliers to minimize stock outs,• Massive LPG cylinder injection and refurbishment of existing LPG

filling plants• Reorganizing our fleet with the introduction of more Grade A trucks

for better product turnaround • Emphasis on cost saving and cash management techniques, with

Trade Account Receivables continuing to receive special focus.

Oando’s Trading Business (OT)Oando’s Trading Business (OT)Oando’s Trading Business (OT)Oando’s Trading Business (OT)Oando’s Trading Business (OT)Oando Supply and Trading Limited and Oando Trading Limited(Bermuda) represent the products trading arm of the Oando group.Our business activities cover trading of refined and unrefined petroleumproducts to refiners, marketing and trading companies worldwide.Oando Supply and Trading is responsible for the supply of refinedpetroleum products into Nigeria, whilst Oando Trading is responsiblefor supply into other markets. Products traded include gasoline, gasoils, kerosene, aviation fuel, distillates, naphtha, fuel oils, bitumen, baseoils, liquefied petroleum gas.

The business also maintains a presence in the world’s products freightmarket in terms of vessels chartered on spot and time charter basisfor delivery of oil and oil products to various customers worldwide.

Review of 2009Review of 2009Review of 2009Review of 2009Review of 2009The cataclysm generated by the global economic crisis of 2008persisted in 2009. Crude oil prices stayed depressed at an average ofabout $45/bbl in the first quarter albeit improvements on prices fromyear end 2008 which saw prices as low as $33.65/ bbl.

There was also the attendant problem of reduced crude oil productioncaused by the Niger Delta Crisis; this led to the reduction in nationalforeign exchange generated creating a massive devaluation of the Naira(approx. 30%). Interest rates remained stable at the levels posted inlast quarter of 2008. Subsidies outstanding from government viaPPPRA on 2008 importations led to increased interest payments andpenalties imposed by the banks for default. In addition, the mode offinancing also changed, in an effort to reduce the impact of high volatilityof the foreign exchange experienced in the market, the companyfinanced its trades using CBN spot rates ruling at the time of issuingletters of credits. This drastically increased funding costs from theusual dollar cost of 10% per annum to Naira rates of 20%-22%perannum.

In the last decade the government decided to reduce the pump price ofregulated petroleum by N5/ltr, which had a negative impact on therevenues and profitability of the business especially on cargos in transitat the time of the pronouncement.

The Second Quarter did not see much improvement as the crude oilprices moved up only slightly to $59/bbl and the Niger delta crisis didnot abate. However the exchange rate obtained some form of stabilitywith the new reforms introduced by current CBN governor who assumedoffice in the same quarter. His reforms however exposed the realisticcredit situation of most banks leading to a credit squeeze within thenational banking sector. This credit squeeze exacerbated the risk ratingof Nigerian banks in the international market leading in an increase inthe rates of facilities.

Significant improvement was recorded in the third quarter as crude oilprices recovered averaging $68/bbl consequently increasing the valueof the Naira against the dollar,

The amnesty declaration from the Federal Government helped toimprove crude oil production in the fourth quarter and the prices ofcrude oil was significantly higher than was previously recorded in thefirst three quarters of the year averaging $74/bbl in November. Howevergovernment indecision on the deregulation of the prices of regulatedproducts led to the PPPRA’s decision not to award import quotas earlyin the quarter, this was however resolved in November when permissionto import was granted by PPPRA. Despite the approval, the companymade a strategic decision to disregard the award until the huge debt ofsubsidies outstanding from government especially on foreign exchangedifferential claims and interest claims from 2008 cargos are settled.There was therefore no importation in the quarter to date.

15

demands, key positions have been resourced and new strategiesdeveloped to ensure compliance to relevant standards.

Customised change, monitoring and feedback systems targeted atbehavioural level were deployed to achieve a gradual but steadyacculturation of EHSQ values in OG&P operations and projects alike,resulting in the Certification of Oando Gas and Power QualityManagement System to ISO 9001:2000 standard, as well as a record400,000 Man-hour run of accident free operations amongst otherindicators.

Review of 2009Review of 2009Review of 2009Review of 2009Review of 2009

Gaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria Limited (GNL) is the flag-ship Company and mainoperating arm of Oando Gas & Power Limited. The most outstandingachievement recorded during the year under review was thecommissioning of our 38km Greater Lagos 3 expansion project. This

The year was very far from impressive, the business environmentand economic climate was at the height of hostility in recent times.There was general deceleration in economic activity and risingexpenditure demands.

Review of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceOando Trading delivered a turnover for the year ended December 31st

2009 of N144billion (8% below 2008 performance) and a PAT ofN6.3billion (60% above 2008 performance) as a result of otheroperating income.

2010 Outlook2010 Outlook2010 Outlook2010 Outlook2010 OutlookThe company’s objectives for 2010 are:••••• To maximize operational efficiency of throughput of products

through its existing storage facilities with the aim of extractingmargins.

••••• To source lower costing products to increase margins, betterfinancing options and lower cost operations.

••••• Strengthen its drive to expand market share by aggressivelyincreasing customer base in Sub-Saharan Africa; and

••••• To diversify the company’s current product offering.

These objectives are in line with the organisation’s plan to prepare forderegulation which is imminent.

MidstreamMidstreamMidstreamMidstreamMidstream

Oando Gas and Power (OGP)Oando Gas and Power (OGP)Oando Gas and Power (OGP)Oando Gas and Power (OGP)Oando Gas and Power (OGP)Oando Gas and Power business is in the distribution of natural gasand power initiatives aimed at electricity generation in Nigeria and WestAfrican markets. Our strategic focus is to aggressively create Nigeria’sdomestic gas grid and leverage the infrastructure to be the prominentlocal gas and power provider. OGP will continue to deliver on itsmandate as one of the major drivers of growth in the Oando Group.

Presently, OGP has the following entities as its business units: GaslinkNigeria Limited, Akute Power Limited and East Horizon Gas CompanyLimited. In addition to these, there remain numerous other projectscurrently being developed within the gas and power division.

OGP is responsible for Oando Plc’s gas and power businesses whichinclude Gaslink Nigeria Limited (GNL), Akute Power Limited (APL),East Horizon Gas Company (EHGC), with other gas and power SpecialPurpose Vehicles (SPVs).

In 2009, Oando Gas & Power division (OGP) focused on expandingits Lagos franchise while concluding the development of a second gasfranchise as well as a captive power plant.

As a result of the continuously expanding Gaslink network as well asconstruction activities in both the EHGC and Akute Independent PowerPlant (IPP), GP has had to address the increased safety and quality

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pipeline project was carried out in order to deliver additional pressureand volume to our customers in the Apapa area as well as to providefor a better assurance of gas supply by creating a loop following globalbest practices. The expansion project which commenced in May 2007now delivers 1.809 million standard cubic feet (mmscf/d) of naturalgas to the Apapa industrial area. The completion was followed by asuccessful hydrostatic pressure test conducted on the infrastructure,which confirmed the integrity of the pipelines.

A major challenge in the past year was the issue of correct pricing ofnatural gas due to rising and extreme volatility in crude oil, commoditiesand steel prices in the international market. The price increase wasalso necessitated by the fluctuation in the price of Low Pour Fuel Oil(LPFO) which is the benchmark alternative fuel as stated in our bilateralagreement with our customers.

Gas price at the start of the year was N24.21/scm being a benchmarkto the LPFO price of N29.21/litre. From Q3, Pipelines and ProductsMarketing Company Limited (PPMC) published the price of LPFO asfollows (July N57/litre, August N63/litre, September N72/litre and Oc-tober-December N70/litre). After series of consultation and engage-ments with stakeholders which included the National Assembly, Manu-facturers Association of Nigeria and the Ministry of Petroleum, an in-terim natural gas price of N40/scm was agreed as at the end of theyear. Discussions are still ongoing to resolve the different positions ongas price, and would likely be concluded in Q1 2010.

Another major challenge was security of gas supply due to unplannedgas outages by the Nigerian Gas Company (NGC) and generalinsecurity in the Niger Delta area. A cumulative outage of 23 days wasrecorded in the year; this represents an improvement over last year’sfigure of 30 days.In the course of the year, we also experienced sand-in-gas in somepart of our distribution network. This affected the offtake of gas bysome of our customers for their operations. We have initiated measuresto overcome this challenge and a final solution is planned to be deliveredby Q2 2010.

It must also be noted that some of our existing industrial customerswere not able to utilize natural gas due to their operational challenges.

Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL) and Lagos Water Corporation (LWC)entered into a power purchase agreement in 2008 for 12MW electricitysupply to LWC main Water Works. The project is the first in the seriesof captive power projects earmarked for execution over the next fewyears. APL ties in with our strategy of becoming a core investor in theNigerian Electricity Industry and a player under a Public PrivatePartnership scheme. The outlook for the company is attractive with theguaranteed cash flow expected from the plant’s operations.

In the year under review, the power plant completion experienced delaysdue to critical activities spanning beyond scheduled timelines. The plant

commissioning programme commenced in December and the powerplant is expected to commence commercial operation in February 2010.We have obtained all necessary regulatory approvals including PioneerStatus from the Nigerian Investment Promotion Commission (NIPC).

East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)EHGC was established as a Special Purpose Vehicle (SPV) toconstruct 18" x 128km natural gas pipeline from the existing Obigbo-ALSCON line in Ukanafun and supply natural gas to the United CementCompany of Nigeria Limited at its Mfamosing plant in Cross-River state.

The Federal Government and the Nigerian National PetroleumCorporation (NNPC) have earlier given their approval to the NGC toenter into a Build-Operate-Transfer (BOT) arrangement with EHGCfor the project. With the initial approval in place, EHGC then obtaineda commitment from NNPC for the supply of 22 million standard cubicfeet per day (mmscf/day) of natural gas being the required volume forthe first phase of the project.

The project has reached overall progress of 65% having achieved majormilestones which included completion of Engineering Design, MajorRiver Crossing, and Horizontal Directional Drilling (HDD). Majorschedule delays were caused by work stoppages arising fromcommunity right of way (ROW) issues. The project is now planned tobe delivered by end of Q2 in 2010.

West African OperationsWest African OperationsWest African OperationsWest African OperationsWest African OperationsIn a bid to take advantage of the growing business opportunities thatthe soon to be commissioned West African Gas Pipeline (WAGP) willprovide, we have incorporated subsidiaries in some West Africancountries: Republic of Benin, Ghana and Togo. This is to leverage ourexperiences in gas distribution/power generation and provide energysolutions to industries in those countries, on the back of the WAGP.Our strategy is to partner with local companies and the national utilitycompanies in these markets and be the dominant player in the WestAfrican gas and power markets. Numerous delays in the final take offof the WAGP project have meant that we have had to delay the start-up of all our projects in these markets. In the interim, we have spenttime creating relationships with potential partners in these countries.

Review of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceOando Gas and Power delivered a turnover for the year endedDecember 31st 2009 of N10.46billion (61% above 2008 performance)and a PAT of N732million (54% above 2008 performance).

Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010The outlook for 2010 is positive mainly due to the predictable and price-induced revenue stream, discretionary capital investments and strongunderlying growth in demand. While OG&P is not immune to the impactof global recession, we are strategically positioned to harness energyresources for the benefit of all stakeholders. We expect that the risingweighted average capital costs, extreme volatility in the commodities

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markets, ongoing global recession, depressed equity valuationscoupled with the socio-political and regulatory uncertainties willcontinue to have influence on our outlook for 2010.

The global outlook suggests that there may be challenges for businessoperations in Nigeria: The global financial crisis and the banking sectorreform with its attendant credit squeeze are expected to continue in2010, thereby reducing the ability to raise finance to develop newprojects.

Also, implementation of full deregulation of industrial fuels (AGO, LPFOand ATK) by the Federal Government of Nigerian will lead to volatilityof natural gas price. This might lead to a reduction in the arbitragecurrently enjoyed by our customers for converting to natural gas.

We expect that local gas consumptions forecasts would still follow thelong-term projection pattern as the Nigerian economy is expected togrow significantly and the bulk of this demand will be driven by newgas-to-power projects. In addition, the National Domestic Gas Supply& Pricing Policy, the implementation of the Gas Master PlanInfrastructure Blueprint and the operation of Multi Year Tariff Order(MYTO) are expected to have positive impact on our business expansion

Based on the recent Amnesty Programme, we expect a reduction inthe Niger Delta restiveness and an attendant improvement in reliabilityof gas supplies for domestic distribution.

In the short term we expect more gas to be available nationally fordomestic utilization as a result of expected increase in available volumesof the Domestic Supply Obligations (DSO) of the International OilCompanies (IOCs). These would potentially make more gas availablefor us to sell to our customers.

Our objective is to ensure the continued strategic optimization of ourexisting assets in Gaslink, Akute and EHGC; search for and acquiremature assets with excellent cash flow potentials; and aggressivelylook for greenfield projects in the gas & power industry to achieve thetargeted minimum 50% Compounded Annual Growth Rate (CAGR) inoverall PAT.

Oando Gas & Power will continue to grow its business portfolio andestablish itself as a force to reckon with in the gas & power space bothin Nigeria and in the other West African region. OG&P’s revenue targetin 2010 is premised on the following:• Translation of two ongoing projects into operating businesses

(Akute Power Limited and East Horizon Gas Company) thatgenerate revenue

• Commencement of a Compressed Natural Gas (CNG) businessfor stranded customers

• Expansion of customers’ offtake from the Gaslink natural gassupply

In conclusion, 2010 offers enormous challenges and opportunities for

OG&P to implement its vision of being the leading and most innovativeenergy group in our chosen markets

Upstream DivisionUpstream DivisionUpstream DivisionUpstream DivisionUpstream Division

Oando Energy ServicesOando Energy ServicesOando Energy ServicesOando Energy ServicesOando Energy Services

The company continued with the consolidation of its existing productservice lines and expanded its swamp rigs fleet with the purchase oftwo additional rigs bringing the swamp rig fleet to five units. Additionalcontracts were awarded to our drilling fluids and drill bits businesses.

However, the continued global economic downturn, slow recovery andspecifically the financial crises in Nigeria coupled with the continuedattacks in the Niger Delta had an adverse effect on the company’sactivities and results in 2009.

Swamp Drilling RigsSwamp Drilling RigsSwamp Drilling RigsSwamp Drilling RigsSwamp Drilling RigsIn spite of the global and local challenges, we recorded some landmarkachievements. The company was awarded a 3 year, $150 millioncontract for two swamp rigs by an International Oil Company (IOC).This tender represented the company’s first participation in acompetitive drilling rig tender. Our High Temperature, High Pressurerig named OES Integrity, procured for the purpose of this contract,was delivered to Nigeria in March 2009. A contractual upgraderequirement on the rig was completed in 2009 and accepted by theIOC.

In June of 2009, we completed the procurement of two swamp rigsfrom Shell. One is a conventional rig named OES Professionalism,whilst the other is a specialized rig with a Cantilever system and namedOES Passion.OES Passion, with its cantilever functionality, has a static hook loadrating of 1.5M lbs and is capable of drilling up to 30,000ft. The drawwork is an Oilwell E3000 system. Other equipment installed on the riginclude: three 16-645/EMD engines, three Oilwell A1700PT mud pumpsand a TDS-3 top drive. The Cantilever functionality of this rig enablesthe rig drill multiple well slots while remaining at the same client location.The rig is currently in a tendering process and we are confident of apositive outcome.

OES Professionalism is a 3000HP rig equipped with a 10,000 psi BOPSystem. It is also equipped with a Pyramid mast and substructurewith static hookload rating of 2.0M lbs, it is capable of drilling up to25,000ft. The rig has an Ideco E3000 drawwork system, three 16-645-E8/EMD engines, three Oil wells A1700PT mud pumps and a TDS-3H top drive. It is currently stacked whilst the company prepares for itsrefurbishment work expected to commence at end of 2010.On 14th of August 2009, the OES Integrity rig commenced operationswith Agip at its oil fields on Bayelsa state. The rig worked for a total of145 days in 2009 with a record 96% utilization rate. As a result of thisnew business line, revenue growth of 30 % was recorded over thesame period in 2008.

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Drill BitsDrill BitsDrill BitsDrill BitsDrill BitsIn the midst of the low drilling activity from the operators in the NigerDelta the drill bits business grew its market share by 3% from theprevious year’s 19% position to 22% in 2009. This achievement washinged on four key areas: better customer service delivery, closerties with Directional Drilling companies, strategic collaboration withcompetitors, and strengthening the company’s work force. These fourpedestals have led to a re-definition of the business offerings from thetraditional commodity mindset to a service orientation. This solidfoundation will herald a new era of increased revenue as drilling activitygoes on the increase.

Drilling FluidsDrilling FluidsDrilling FluidsDrilling FluidsDrilling FluidsThis business continued to provide services to its existing customersduring the year and moved up the value chain by providing other servicesthat were previously provided by our technical partners. Activity droppedduring the year with an 80% reduction in revenue over the same periodlast year. This was primarily due to the drop in drilling activity as aresult of the disruptions in the Niger Delta region.

The company developed capacity during the year via training of peopleand gained more knowledge of the business. We also signed an MOUwith a leading Chemicals Specialty Company in Australia to provide uswith the various components of chemicals required for the services weprovide.

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Review of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceOando Energy Services delivered a turnover for the year endedDecember 31st 2009 of N6.08bilion (48% above 2008 performance)and a loss of N0.797bilion (0.07% above 2008 performance).

Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010We expect that the Federal Government’s amnesty program for NigerDelta militants would lead to a sharp reduction in the Niger Delta unrest.Based on this assumption, the IOC’s have set aggressive drilling targetsfor 2010 and as a service company we expect to benefit from thisthrough increase in demand for our products and services.

We also plan to spend the first half of the year refurbishing 2 our rigs,in preparation for drilling contracts in 2010.

The Drill Bit business will continue to consolidate its position and beawarded contracts with the IOC’s whose activities constitute 80% ofthe total drilling activity in Nigeria. There will also be a strong focus onthe marginal operators with emphasis on providing a fit for purpose bitsolutions to enable the drilling of wells at the cheapest possible cost.We are confident that with the government policies and the aggressivelocal content initiatives of the Federal Government, service companieslike ours with world class standards will aggressively grow and increasevalue to shareholders in 2010 and beyond.

Oando Exploration & ProductionOando Exploration & ProductionOando Exploration & ProductionOando Exploration & ProductionOando Exploration & Production

Oando Exploration and Production Limited (OEPL), Oando OML 125& 134 Limited, Oando Akepo and Oando Production and DevelopmentCompany (OPDC), are the Group’s vehicle for the possession ofupstream assets.

Asset profile:Asset profile:Asset profile:Asset profile:Asset profile:OML 125 and OML134OML 125 and OML134OML 125 and OML134OML 125 and OML134OML 125 and OML134Oando OML 125 and OML134 acquired a 15% participatory interest inOML’s 125 and 134 respectively in 2008. These blocks are operatedby Nigeria Agip Exploration (NAE) and the blocks are located in thedeep offshore of Nigeria with acreage size of 1,220Sq km (OML 125)and 1,187Sq km (OML 134).

Production in OML 125 has increased tremendously from 18,500bls/day last year to approximately 30,500bbls/day as a result of the acidstimulation carried out on the Wells. However, we are still awaiting theresults of the 3D dynamic model which is anticipated to provide anupdate on the estimated reserves. We lifted our first cargo in August,2009 and have entered into a cargo pooling agreement with NAE.

Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)

A 45% working interest in the Obodeti/Obodugwa field area wasawarded to OPDC by the Government during the Marginal FieldAllocation Round in 2003 and pursuant to a Marginal Fields Farm OutAgreement between NNPC, Elf Petroleum , Energia and Unipetrol

Production and Development Company Limited, the Company’spredecessor in September 2004. Pursuant to a unitisation agreementbetween the Group, Energia and Pillar Oil in April 2004, the combinedworking interest of the Group and Energia in the oil production fromthe Obodugwa 3 well, which is located in an adjacent concessionoperated by Pillar Oil, is 30%. The Group’s working interest in the oilproduction from the Obodugwa 3 well is 45%.

Four wells had been drilled in the Obodeti/Obodugwa field area by Elf.Following production tests in October 2009, the Obodeti/Obodugwafield commenced oil production operations, although full productionfrom the field is pending the completion of a pipeline that will enabletransportation of the oil produced from the field directly to the gatheringfacility. Currently, the oil produced in the field is carried to the gatheringfacility by trucks. The pipeline is in construction and is expected to becommissioned by the end of the first half of 2010.

Akepo Field (OML 90)Akepo Field (OML 90)Akepo Field (OML 90)Akepo Field (OML 90)Akepo Field (OML 90)Oando Akepo entered into a farm in agreement with Exile, pursuant towhich the Group acquired a 30% working interest in a Marginal FieldsFarm Out Agreement with respect to the Akepo field among the NNPC,Chevron and Sogenal Under a JOA between Sogenal, Exile and OandoExploration & Production, Sonegal is the operator of the field.

The Akepo field is located in shallow water in the Niger Delta, on anarea of 25.7 km2 within OML 90. The field is currently in the developmentstage.

OPL 278OPL 278OPL 278OPL 278OPL 278In January 2006, OEPL acquired a 60% working interest pursuant to aPSC among the Group, CAMAC, Allied Energy and First Axis and theNNPC, in respect of OPL 278. OPL 278 is operated by OEPL under aJOA made between OEPL, CAMAC, Allied Energy and First Axis.

OPL 278 is located offshore of Rivers State in a transition zone (swampto shallow marine) on an area of 91.9 km2. Three prospects have beenidentified in OPL 278, which are Ke, Prospect A and Prospect B.

OPL 236OPL 236OPL 236OPL 236OPL 236OEPL was awarded this block in May 2007 and the Production SharingContract was signed with NNPC in February, 2008. This conferredOEPL with a 95% working interest and Operator of the block. RFOVentures is the local content vehicle (LCV) with a 5% participatoryinterest. The block is located onshore Akwa-Ibom State with a totalacreage of 1,650SqKm.

A Global Memorandum of Understanding (GMOU) was signed withthe Ukana community in August 2008.

OPL 282OPL 282OPL 282OPL 282OPL 282On 8 August 2006, OEPL acquired a 4% working interest in the PSCbetween NAOC, Alliance Oil Producing Nigeria Limited and NNPC, inrespect of OPL 282 (the “OPL 282 PSCOPL 282 PSCOPL 282 PSCOPL 282 PSCOPL 282 PSC”). NAOC holds a 90% working

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interest in the OPL 282 PSC, while AOPN, which represents the localcontent vehicle in OPL 282, holds the remaining 10% working interest.The Group holds 40% of the shares in AOPN, while ARC Oil and GasNigeria Limited holds the remaining 60%. OPL 282 is operated byNAOC under a JOA made between NAOC and AOPN.OPL 282 is located in a transition zone (onshore to shallow marine) inBayelsa State, on an area of 695 km2. This block is currently in theexploration and appraisal phase.

Review of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceOando Exploration and Production delivered a turnover for the yearended December 31st 2009 of N12.22billion (12% below 2008performance) and a PAT of N1.08billion (9.3% above 2008performance).

Looking Forward to 2010Looking Forward to 2010Looking Forward to 2010Looking Forward to 2010Looking Forward to 2010

Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010We are very optimistic about 2010 especially as the industry expectsto be repositioned by the much anticipated passage of the PetroleumIndustry Bill (PIB) and Nigerian Content Bill by the National Assembly.Both bills are expected to increase our footprint in the industry as itwould present more opportunities for us to acquire more acreage fromthe International Oil Companies (IOC’s) and farm-into under-performingassets that have near-term production profiles.

Furthermore, we shall continue to position ourselves as the preferredpartner of choice to companies seeking to gain entry into the Nigeriaoil industry and the Gulf of Guinea.

Our focus is to increase current daily production to 10,000bopd/dailyand grow our reserves accordingly to deliver increased shareholdervalue to our stakeholders both locally and offshore.

ProjectsProjectsProjectsProjectsProjectsOando’s Refinery and Terminals (OR&T) division is charged withsolving the nation’s long term dependence on imported petroleumproducts.

OR&T is a development organization that will quickly transition frombeing a user of cash to a major cash engine for the group by addressingthe nation’s supply shortcomings in two distinctive phases, short/midterm and long term. The division strives to maintain focus on thehighest value delivering opportunities and show the highest return forscarce Group cashflows committed; the scope includes mainstreamproducts like PMS and products still in the growth phase such asLPG.

In response to the dire delays and value destruction experienced atthe Lagos ports (which at times account for the supply of over 80% ofthe nation’s petroleum products consumption); Oando has completedthe Front End Engineering & Design (FEED) of the Apapa SubmarinePipeline Project. This initiative, approved by the Department of

Petroleum Resources (DPR), includes an ocean based Single PointMooring and subsea pipeline system which will reduce the congestionin the Apapa port and significantly increase the tank turns of theMajor Marketers’ existing storage. The first phase, a jetty in the LagosChannel, the Marina Jetty, will be built and connected to the MajorMarketers’ storage by a short 1km subsea pipeline and a new 3kmonshore line delivering almost 3 million tonnes a year. This project isexpected to come on stream as early as the first half of 2012.

Your company believes there is growth potential for the LPG market inNigeria, since LPG is a fully deregulated fuel suitable for both domesticand industrial use and is a long established, well accepted but as yetminor source of energy supply in Nigeria. LPG usage in Nigeria iscurrently six times lower per capita relative to the West African averageand has been dogged by supply interruption, a lack of shoreline storageand poor cylinder availability. In response, Oando intends to constructa 7,600MT storage facility in the Apapa terminal in Lagos. This wouldallow the Company to remove reliance on third parties for the storageof LPG. Your company is currently a player at several points along theLPG value chain, including product importation through Oando Supplyand Trading, industrial sales by Oando Marketing Limited, refilling atits filling plants throughout Nigeria and participation in the retail market.

We intend to begin construction of the LPG storage facility in the secondhalf of 2010. It is intended that the LPG storage facility will be completedin 2012 and will become operational in the same year. We havecompleted a FEED study and it is expected that financing and theengineering, procurement and construction contract award will becompleted by the end the first half of 2010. An approval from the DPRto construct the LPG plant was granted to the Group on 30 November2009.

In the midterm, we will develop and operate a state of the art refinedproduct import terminal supported by the first privately operated SinglePoint Mooring (SPM) system in West Africa. An SPM is an offshoresystem used to discharge very large carriers into offshore tanks via asubsea pipeline. The logistics benefits of such an operation, coupledwith the world class terminal operating systems planned for the 210kTcapacity facility will make it the terminal of choice for not only OR&T’ssister company, Oando Supply & Trading but all other serious importers.The terminal, located in the Lekki Free trade Zone (LFTZ) is plannedto come on stream late 2012.

The long term solution will be the multi-billion dollar development ofthe first Greenfield refinery development in Africa for over twenty years.The first phase of the proposed 360,000 bpd refinery will satisfy atleast half of the nation’s import requirement and enhance shareholdervalue with strong distillates exports to meet severe deficits in the AtlanticBasin. Land has been secured in the LFTZ for the project and theviability of the project, from a technical execution and cashflowperspective, will be much enhanced by the prior execution of the refinedproduct import terminal which will serve as the finished product storage

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terminal of the refinery.

In summary, the division has a tightly defined focus of infrastructuredevelopment, that is much in demand and cash generative. Internally,our capabilities and process enhancement has continued apace toensure reliable world class delivery of the identified projects whilecreating a platform to sequentially secure new opportunities as theyarise, out of new insight and without doubt, the government’sprivatisation drive.

ConclusionConclusionConclusionConclusionConclusion2009 proved to be a challenging year for the global economy. The localeconomy was further affected by major economic and politicalobstacles, but due to our unflinching commitment to delivering on ourpromises to our shareholders, we were able to overcome thesechallenges and deliver a worthy result.

2010 will be a year full of promise for our company, our committedfocus to creating a world class organization is closer in sight and welook forward to exceeding our expectations in years to come.

I thank you on behalf of the Management and staff of Oando Plc, foryour continued support and look forward to a successful year for thecompany and a rewarding year for shareholders.

Mr. J. A. TinubuMr. J. A. TinubuMr. J. A. TinubuMr. J. A. TinubuMr. J. A. TinubuGroup Chief ExecutiveGroup Chief ExecutiveGroup Chief ExecutiveGroup Chief ExecutiveGroup Chief Executive

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Major General M. Magoro( Rtd.) OFR, PSCChairman, Non-Executive DirectorGaladiman Zuru

Mr. Jubril Adewale TinubuGroup Chief Executive

Mr. Omamofe BoyoDeputy Group Chief Executive

Mr. Mobolaji OsunsanyaGroup Executive Director

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Mr. Ademola Akinrele SANNon-Executive Director

Chief Sena AnthonyNon-Executive Director

Mr. Navaid BurneyNon-Executive Director

Mr. Olufemi AdeyemoGroup Executive Director

24


HRM Michael A. Gbadebo, CFRNon-Executive DirectorThe Alake of Egbaland

Mr. Valentine Oboden IbruNon-Executive Director

Alhaji Hamidu Mahmud Walin MubiNon-Executive Director

Mr. O. P OkolokoNon-Executive Director

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Ms. Amal Inyingiala Pepple CFRNon-Executive Director

Ms. Genevieve SangudiNon-Executive Director


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REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS

20092009200920092009 20082008200820082008

N’000 N’000

Turnover 336,859,678 339,420,435

Profit on ordinary Activities before taxation 13,512,155 10,742,611

Profit After Tax 10,096,979 8,343,325

Attributable to group 10,243,168 8,339,273

Attributable to minorities (146,189) 4,052

Earnings per 50 share (Naira) 11.32 9.22

Dividend per 50 k share- proposed (Naira) 3 6

Net Assets per 50 k share 58.92 49.60

Dividend cover x 3.72 1.15

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In accordance with the provisions of the Companies and Allied MattersAct, 2004, the Directors of Oando PLC hereby present to the membersof the Company the audited consolidated financial statements for theyear ending 31 December 2009.

The preparation of annual financial statements is the responsibility ofthe Board, and it should give a true and fair view of the state of affairsof the Company.

The Directors declare that nothing has come to their attention to indicatethat the Company will not remain a going concern for at least twelvemonths from the date of this report.

Legal FormLegal FormLegal FormLegal FormLegal Form

The Company commenced operations in 1956 as petroleum marketingcompany in Nigeria under the name ESSO West Africa Inc., asubsidiary of Exxon Corporation (“ExxonExxonExxonExxonExxon”), and was incorporated underNigerian Law as Esso Standard Nigeria Limited (“EssoEssoEssoEssoEsso”) in 1969. In1976, the Federal Government acquired Exxon’s interest in Esso; Essowas nationalised and rebranded as Unipetrol Nigeria Limited(“UnipetrUnipetrUnipetrUnipetrUnipetrololololol”). A process of privatisation began in 1991 when theFederal Government divested 60% of its shareholding in Unipetrol tothe public. Unipetrol’s shares were listed on the Nigerian StockExchange (the “NSENSENSENSENSE”) in February 1992, quoted as Unipetrol NigeriaPLC. Under the second phase of the privatisation process, the FederalGovernment sold its remaining shareholding in Unipetrol. Ocean andOil Investments (Nigeria) Limited, the Company’s major shareholder(“OOINOOINOOINOOINOOIN”), in 2000, acquired 30% in Unipetrol from the FederalGovernment. The residual 10% stake held by the Federal Governmentwas sold to the public in 2001.

In August 2002, Unipetrol acquired a 60% stake in Agip Nigeria Plc(“AgipAgipAgipAgipAgip”) from Agip Petroli International. The remaining 40% of theshares in Agip was acquired by the Unipetrol by way of a share swapunder a scheme of merger. The combined entity that resulted from themerger of Unipetrol and Agip was rebranded as Oando PLC inDecember 2003.

In 1999, Unipetrol had acquired a 40% stake in Gaslink Nigeria Limited(“GaslinkGaslinkGaslinkGaslinkGaslink”); this stake was subsequently increased to 51% in 2001.TheCompany’s Gas and Power division emerged as a result of theconsolidation of Gaslink’s gas distribution franchise and the Company’scustomer base in 2004.

On 25 November 2005, the Company was listed on the main board ofthe Johannesburg Stock Exchange (the “JSEJSEJSEJSEJSE”) and thereby becamethe first African company to achieve a cross border inward listing.

In June 2007, the Company entered into a scheme of arrangement(the “ScScScScSchemehemehemehemeheme”) with certain minority shareholders of Gaslink and withOOIN. Under the Scheme, the minority shareholders of Gaslinktransferred their equity holdings in Gaslink to the Company in

consideration for ordinary shares in the Company. In addition, OOINtransferred its interests in Oando Supply and Trading Limited, OandoTrading (Bermuda) Limited, Oando Production and DevelopmentCompany Limited, Oando Energy Services Limited and OandoExploration and Production Company Limited to the Company inconsideration for ordinary shares in the Company.

Description of OperationsDescription of OperationsDescription of OperationsDescription of OperationsDescription of OperationsOando’s business is organised into six business divisions. Thesedivisions are: Exploration and Production and Energy Services (in theupstream sector); Gas and Power (in the midstream sector) andMarketing, Supply and Trading and Refining and Terminals (in thedownstream sector).

Downstream SectorDownstream SectorDownstream SectorDownstream SectorDownstream SectorThe Group’s operations in the downstream sector comprise itsMarketing and Supply and Trading businesses. In addition, the Grouphas recently created a Refining and Terminals business division, underwhich the Group’s activities are currently limited to the planning of anumber of projects.

Oando Marketing LimitedOando Marketing LimitedOando Marketing LimitedOando Marketing LimitedOando Marketing LimitedOando Marketing remains the nation’s leading oil retailer, with its retailoutlets numbering over 600 coupled with its expanding commercialbusiness focused on meeting the needs of companies across allindustries. With strategically located terminals and an ever improvingdistribution network, the company has ensured that its productsincluding PMS, HHK, AGO, Lubes, LPFO, ATK, LPG, Bitumen andInsecticides have continued to meet the increasingly demanding needsof its esteemed customers

Review of 2009Review of 2009Review of 2009Review of 2009Review of 20092009 witnessed a general lull in the socio-economic environment aswhole, owing to various adverse shocks that took place during the year.Low crude oil prices coupled with the Niger Delta unrest influencedgovernment’s decision to pursue a contractionary monetary policy. Thisadopted monetary policy put an adverse strain on overall liquidity andcoupled with the hike in inflation which stood at 12.4% compared to9.8% experienced in 2008 served to reduce GDP growth and overallbusiness activity.

The liquidity squeeze and government’s decision to deregulate thedownstream sector also heightened the level of business uncertaintyexperienced in the year. The reduction of credit by banks reduced theproduct importation capacity of most product importers, therebyaffecting product supply during the period. The inland refineries alsooperated at about 30% of their capacity and could do little to bridge thesupply gap. The position was made worse by the inability of thegovernment to announce a clear path for deregulation, as well as payimporters for past subsidy entitlements from the Petroleum SubsidyFund. As a result, PPMC remained the largest (and for the last quarter,sole) importer of PMS but volumes supplied were insufficient asevidenced by the return of fuel queues at filling stations across thecountry.

REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS REPORT OF THE DIRECTORS

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The poor state of inter/intra state roads equallycontinued to prove disruptive to product distribution.Road transportation accounts for about 90% of theproduct distribution channel (i.e. via trucks) and a goodnumber of sales were lost as a result of and the frequentinability of trucks to access certain locations due to thebad road network.

In spite of these challenges, the company strove tocreate value by focusing on improving cash flowmanagement by introducing an online, real time dealerpayment system which took a full day out of the orderto cash cycle. Furthermore, we improved the quality ofreceivables by limiting credit facilities to blue chipcompanies only, thereby reducing bad debt provisionsignificantly. Lastly, we successfully worked to realisethe benefits of our ERP system, thus delivering clearreductions in fixed costs and vastly improving stockmanagement and integrity.

2010 Outlook2010 Outlook2010 Outlook2010 Outlook2010 OutlookDespite the uncertainties surrounding government policy onderegulation and the continued liquidity squeeze, OML’s resolve tocontinue to create value for all stakeholders remains unabated. ThePetroleum Industry Bill currently before the National Assemblycontinues to receive close monitoring as your company thrives to exploitopportunities embedded in the bill intended to sanitise the oil and gassector.

Improving operational efficiency remains priority as the company seeksto continue to leverage on measures introduced in previous years,especially in the areas of product sourcing and distribution. Emphasishas been placed on ensuring customers receive improved servicedelivery at all locations, with the revamp of the Customer Care Unit inlate 2009.

Other focus initiatives for 2010 include:• Pioneering AGO Value Added Peddling services with pre-

identified target customers such as telecommunicationscompanies, banks, hotels, restaurants and facility managementcompanies

• Maximizing revenue from retail outlets by identifying and deploringat least three Non Fuel Revenue(NFR) bundles to each station.

• Engaging key strategic distributors to off take large volumes ofour insecticides and aggressively grow our share of the market.

• Improving relationships with suppliers to minimize stock outs,• Massive LPG cylinder injection and refurbishment of existing

Liquefied Petroleum Gas (LPG) filling plants• Reorganizing our fleet with the introduction of more Grade A

trucks for better product turnaround • Emphasis on cost saving and cash management techniques,

with Trade Account Receivables continuing to receive specialfocus.

Supply and Trading Division :Supply and Trading Division :Supply and Trading Division :Supply and Trading Division :Supply and Trading Division :Oando Supply and Trading Limited and Oando Trading Limited(Bermuda) represent the products trading arm of the Oando group.The Companies trade in refined and unrefined petroleum products inthe international market, and is a leading indigenous supply and tradingbusiness in Nigeria and other markets in Sub-Saharan Africa. TheCompanies currently import refined petroleum products, includingjet A1, liquefied petroleum gas, gasoline, dual purpose kerosene, dieseland low/high pour fuel oil, and exports crude oil. The Companies havetrading desks in Nigeria and Bermuda, and trading consultants in theUnited Kingdom and Singapore. The Company also maintains apresence in the world’s products freight market in terms of vesselschartered on spot and time charter basis for delivery of oil and oilproducts to various customers worldwide.

S&T 2010 OutlookS&T 2010 OutlookS&T 2010 OutlookS&T 2010 OutlookS&T 2010 OutlookThe company’s strategy for 2010 is to maximise supplies of PMS, AGOand HHK and to strengthen its drive to expand market share byaggressively increasing its customer base in Nigeria as well as WestAfrica.

Oando Refinery and Terminals DivisionOando Refinery and Terminals DivisionOando Refinery and Terminals DivisionOando Refinery and Terminals DivisionOando Refinery and Terminals DivisionOando’s Refinery and Terminals (OR&T) division is charged withsolving the nation’s long term dependence on imported petroleumproducts.

OR&T is a development organization that will quickly transition frombeing a user of cash to a major cash engine for the group by addressingthe nation’s supply shortcomings in two distinctive phases, short/midterm and long term. The division strives to maintain focus on thehighest value delivering opportunities and show the highest return for

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scarce Group cash flows committed; the scope includes mainstreamproducts like PMS and products still in the growth phase such asLPG.

In response to the dire delays and value destruction experienced atthe Lagos ports (which at times account for the supply of over 80%of the nation’s petroleum products consumption), Oando hascompleted the Front End Engineering & Design (FEED) of the ApapaSubmarine Pipeline Project. This initiative, approved by theDepartment of Petroleum Resources (DPR), includes an ocean basedSingle Point Mooring and subsea pipeline system which will reducethe congestion in the Apapa port and significantly increase the tankturns of the Major Marketers’ existing storage. The first phase, ajetty in the Lagos Channel, the Marina Jetty, will be built and connectedto the Major Marketers’ storage by a short 1km subsea pipeline and anew 3km onshore line delivering almost 3 million tonnes a year. This

project is expected to come on stream as early as the first half of2012.Your company believes there is growth potential for the LPG marketin Nigeria, since LPG is a fully deregulated fuel suitable for bothdomestic and industrial use and is a long established, well acceptedbut as yet minor source of energy supply in Nigeria. LPG usage inNigeria is currently six times lower per capita relative to the WestAfrican average and has been dogged by supply interruption, a lackof shoreline storage and poor cylinder availability. In response, Oandointends to construct a 7,600MT storage facility in the Apapa terminalin Lagos. This would allow the Company to remove reliance on thirdparties for the storage of LPG. Your company is currently a player atseveral points along the LPG value chain, including product importationthrough Oando Supply and Trading, industrial sales by OandoMarketing Limited, refilling at its filling plants throughout Nigeria andparticipation in the retail market.

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refined product import terminal which will serve as the finished productstorage terminal of the refinery.

In summary, the division has a tightly defined focus of infrastructuredevelopment: development that is much in demand and cashgenerative. Internally, our capabilities and process enhancement hascontinued apace to ensure reliable world class delivery of the identifiedprojects while creating a platform to sequentially secure newopportunities as they arise, out of new insight and without doubt, thegovernment’s privatisation drive.

Midstream SectorMidstream SectorMidstream SectorMidstream SectorMidstream Sector

Oando Gas & PowerOando Gas & PowerOando Gas & PowerOando Gas & PowerOando Gas & PowerThe Group’s operations in the midstream sector comprise its Gas andPower business, which distributes natural gas to industrial andcommercial customers and pursues niche power generation initiativesin Nigeria. Most of these power generation initiatives are independentprojects for industrial customers in areas within which the Groupoperates its gas distribution network, leveraging on the existing gasinfrastructure of the Group and a suitable regulatory environment.In addition to its gas distribution operations, the Group is regularlylooking for ways to expand its operations in this sector, includingexploring opportunities to supply compressed natural gas to customerswho do not have access to the national grid, and for sale through theGroup’s retail marketing network, over a three-year timeframe. Thegas and power division is an area where the Group will seek to expandits operations beyond Nigeria

Presently, Oando Gas & Powerdivision (OG&P) has the followingentities as its business units:Gaslink Nigeria Limited, AkutePower Limited and East HorizonGas Company Limited. In additionto these, there remain numerousother projects currently beingdeveloped within the division.

In 2009, OG&P (OG&P) focusedon expanding its Lagos Franchisewhile concluding the developmentof a second gas franchise as wellas a captive power plant.

Gaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria LimitedGaslink Nigeria Limited (GNL) isthe flag-ship Company and mainoperating arm of Oando Gas &Power Limited. The mostoutstanding achievement recordedduring the year under review was

We intend to begin construction of the LPG storage facility in the secondhalf of 2010. It is intended that the LPG storage facility will be completedin 2012 and will become operational in the same year. We havecompleted a FEED study and it is expected that financing and theengineering, procurement and construction contract award will becompleted by the end the first half of 2010. An approval from the DPRto construct the LPG plant was granted to the Group on 30 November2009.

In the midterm, we will develop and operate a state of the art refinedproduct import terminal supported by the first privately operated SinglePoint Mooring (SPM) system in West Africa. An SPM is an offshoresystem used to discharge very large carriers into offshore tanks via asubsea pipeline. The logistics benefits of such an operation, coupledwith the world class terminal operating systems planned for the 210kTcapacity facility will make it the terminal of choice for not only OR&T’ssister company, Oando Supply & Trading but all other serious importers.The terminal, located in the Lekki Free trade Zone (LFTZ) is plannedto come on stream late 2012.

The long term solution will be the multi-billion dollar development ofthe first Greenfield refinery development in Africa for over twenty years.The first phase of the proposed 360,000 bpd refinery will satisfy atleast half of the nation’s import requirement and enhance shareholdervalue with strong distillates exports to meet severe deficits in the AtlanticBasin. Land has been secured in the LFTZ for the project and theviability of the project, from a technical execution and cash flowperspective, will be much enhanced by the prior execution of the

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the commissioning of our 38km Greater Lagos 3 expansion project.This pipeline project was carried out in order to deliver additionalpressure and volume to our customers in the Apapa area as well as toprovide for a better assurance of gas supply by creating a loop followingglobal best practices. The expansion project which commenced in May2007 now delivers 1.809 million standard cubic feet (mmscf/d) of naturalgas to the Apapa industrial area. The completion was followed by asuccessful hydrostatic pressure test conducted on the infrastructure,which confirmed the integrity of the pipelines. Gaslink places strong emphasis on the safety and the integrity of itspipeline infrastructure. This is underpinned by the rigorous hydrostatictest on these pipelines according to the global best practice on safetyand quality standards.

A major challenge in the past year was the issue of correct pricing ofnatural gas due to rising and extreme volatility in crude oil, commoditiesand steel prices in the international market. The price increase wasalso necessitated by the fluctuation in the price of Low Pour Fuel Oil(LPFO) which is the benchmark alternative fuel as stated in our bilateralagreement with our customers.Gas price at the start of the year was N24.21/scm being a benchmarkto the LPFO price of N29.21/litre. From Q3, Pipelines and ProductsMarketing Company Limited (PPMC) published the price of LPFO asfollows (July N57/litre, August N63/litre, September N72/litre andOctober-December N70/litre). After series of consultation andengagements with stakeholders which included the National Assembly,Manufacturers Association of Nigeria (MAN) and the Ministry ofPetroleum, an interim natural gas price of N40/scm was agreed as atthe end of the year. Discussions are still ongoing to resolve the differentpositions on gas price, and would likely be concluded in Q1 2010.Another major challenge was security of gas supply due to unplannedgas outages by the Nigerian Gas Company (NGC) and generalinsecurity in the Niger Delta area. A cumulative outage of 23 days wasrecorded in the year, though represents an improvement over last year’sfigure of 30 days.

In the course of the year, we also experienced sand-in-gas in somepart of our distribution network. This affected the offtake of gas bysome of our customers for their operations. We have initiated measuresto overcome this challenge and a final solution is planned to be deliveredby Q2 2010.

It must also be noted that some of our existing industrial customerswere not able to utilize natural gas due to their business operationalchallenges.

Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL)Akute Power Limited (APL) and Lagos Water Corporation (LWC)entered into a power purchase agreement in 2008 for 12MW electricitysupply to LWC main Water Works. The project is the first in the seriesof captive power projects earmarked for execution over the next fewyears. APL ties in with our strategy of becoming a core investor in theNigerian Electricity Industry and a player under a Public Private

Partnership scheme. The outlook for the company is attractive with theguaranteed cash flow expected from the plant operations.

In the year under review, the power plant completion experienced delaysdue to critical activities spanning beyond scheduled timelines. The plantwas formally commissioned by his Excellency, Mr. Babatunde Fashola,SAN, the Governor of Lagos State on 4 March 2010. We have obtainedall necessary regulatory approvals including Pioneer Status from theNigerian Investment Promotion Commission (NIPC).

East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)East Horizon Gas Company Limited (EHGC)EHGC was established as a Special Purpose Vehicle (SPV) toconstruct 18" x 128km natural gas pipeline from the existing Obigbo-ALSCON line in Ukanafun and supply natural gas to the United CementCompany of Nigeria Limited at its Mfamosing plant in Cross-River state

The Federal Government and the Nigerian National PetroleumCorporation (NNPC) have earlier given their approval to the NGC toenter into a Build-Operate-Transfer (BOT) arrangement with EHGCfor the project. With the initial approval in place, EHGC then obtaineda commitment from NNPC for the supply of 22 million standard cubicfeet per day (mmscf/day) of natural gas being the required volume forthe first phase of the project.

The project has reached overall progress of 65% (35% of constructionwork done), having achieved major milestones which includedcompletion of Engineering Design, Major River Crossing, and HorizontalDirectional Drilling (HDD). Major schedule delays were caused by workstoppages arising from community right of way (ROW) issues. Theproject is now planned to be delivered by end of Q2 in 2010

West African OperationsWest African OperationsWest African OperationsWest African OperationsWest African OperationsIn a bid to take advantage of the growing business opportunities thatthe soon to be commissioned West African Gas Pipeline (WAGP) willprovide, we have incorporated subsidiaries in some West Africancountries: Republic of Benin, Ghana and Togo. This is to leverage ourexperiences in gas distribution/power generation and provide energysolutions to industries in those countries, on the back of the WAGP.

Our strategy is to partner with local companies and the national utilitycompanies in these markets and be the dominant player in the WestAfrican gas and power markets. Numerous delays in the final take offof the WAGP project have meant that we have had to delay the start-up of all our projects in these markets. In the interim, we have spenttime creating relationships with potential partners in these countries.

Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010The outlook for 2010 is positive mainly due to the predictable and price-induced revenue stream, discretionary capital investments and strongunderlying growth in demand. While OG&P is not immune to the impactof global recession, we are strategically positioned to harness energyresources for the benefit of all stakeholders. We expect that the risingweighted average capital costs, extreme volatility in the commodities

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markets, ongoing global recession, depressed equity valuationscoupled with the socio-political and regulatory uncertainties willcontinue to have influence on our outlook for 2010.

The global outlook suggests that there may be challenges for businessoperations in Nigeria: The global financial crisis and the banking sectorreform with its attendant credit squeeze are expected to continue in2010, thereby reducing the ability to raise finance to develop newprojects.

Also, implementation of full deregulation of industrial fuels (AGO, LPFOand ATK) by the Federal Government of Nigerian will lead to volatilityof natural gas price. This might lead to a reduction in the arbitragecurrently enjoyed by our customers for converting to natural gas.

We expect that local gas consumptions forecasts would still follow thelong-term projection pattern as the Nigerian economy is expected togrow significantly and the bulk of this demand will be driven by newgas-to-power projects. In addition, the National Domestic Gas Supply& Pricing Policy, the implementation of the Gas Master PlanInfrastructure Blueprint and the operation of Multi Year Tariff Order(MYTO) are expected to have positive impact on our business expansionBased on the recent Amnesty Programme, we expect a reduction inthe Niger Delta restiveness and an attendant improvement in reliabilityof gas supplies for domestic distribution.

In the short term we expect more gas to be available nationally fordomestic utilization as a result of expected increase in available volumesof the Domestic Supply Obligations (DSO) of the International OilCompanies (IOCs). These would potentially make more gas availablefor us to sell to our customers.Our objective is to ensure the continued strategic optimization of ourexisting assets in Gaslink, Akute and EHGC; search for and acquiremature assets with excellent cash flow potentials; and aggressivelylook for greenfield projects in the gas & power industry to achieve thetargeted minimum 50% Compounded Annual Growth Rate (CAGR) inoverall PAT.

Oando Gas & Power will continue to grow its business portfolio andestablish itself as a force to reckon with in the gas & power space bothin Nigeria and in the other West African region. OG&P’s revenue targetin 2010 is premised on the following:• Translation of two ongoing projects into operating businesses

(Akute Power Limited and East Horizon Gas Company) thatgenerate revenue;

• Commencement of a Compressed Natural Gas (CNG) businessfor stranded customers; and

• Expansion of customers’ offtake from the Gaslink natural gassupply

In conclusion, 2010 offers enormous challenges and opportunities forOG&P to implement its vision of being the leading and most innovativeenergy group in our chosen markets

Upstream SectorUpstream SectorUpstream SectorUpstream SectorUpstream SectorThe Group’s operations in the upstream sector comprise its Explorationand Production and Energy Services businesses.

Oando Exploration & ProductionOando Exploration & ProductionOando Exploration & ProductionOando Exploration & ProductionOando Exploration & Production

Oando Exploration and Production Limited (OEPL), Oando OML 125& 134 Limited, Oando Akepo and Oando Production and DevelopmentCompany (OPDC), are the Group’s vehicle for the possession ofupstream assets.

Asset profile:Asset profile:Asset profile:Asset profile:Asset profile:OML 125 and OML134OML 125 and OML134OML 125 and OML134OML 125 and OML134OML 125 and OML134Oando OML 125 and Oando OML134 acquired a 15% participatoryinterest in OML’s 125 and 134 respectively in 2008. These blocks areoperated by Nigeria Agip Exploration (NAE) and the blocks are locatedin the deep offshore of Nigeria with acreage size of 1,220Sq km (OML125) and 1,187Sq km (OML 134).

Production in OML 125 has increased tremendously from 18,500bls/day last year to approximately 30,500bbls/day as a result of the acidstimulation carried out on the Wells. However, we are still awaiting theresults of the 3D dynamic model which is anticipated to provide anupdate on the estimated reserves. We lifted our first cargo in August,2009 and have entered into a cargo pooling agreement with NAE.

Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)Obodeti/Obodugwa Field Area (OML 56)

A 45% working interest in the Obodeti/Obodugwa field area wasawarded to OPDC by the Government during the Marginal FieldAllocation Round in 2003 and pursuant to a Marginal Fields Farm OutAgreement between NNPC, Elf Petroleum (“ElfElfElfElfElf”), Energia and UnipetrolProduction and Development Company Limited, the Company’spredecessor in September 2004. Pursuant to a unitisation agreementbetween the Group, Energia and Pillar Oil in April 2004, the combinedworking interest of the Group and Energia in the oil production fromthe Obodugwa 3 well, which is located in an adjacent concession

34

operated by Pillar Oil, is 30%. The Group’s working interest in the oilproduction from the Obodugwa 3 well is 45%.

Four wells had been drilled in the Obodeti/Obodugwa field area by Elf.Following production tests in October 2009, the Obodeti/Obodugwafield commenced oil production operations, although full productionfrom the field is pending the completion of a pipeline that will enabletransportation of the oil produced from the field directly to the gatheringfacility. Currently, the oil produced in the field is carried to the gatheringfacility by trucks. The pipeline is in construction and is expected to becommissioned by the end of the first half of 2010.

Akepo Field (OML 90)Akepo Field (OML 90)Akepo Field (OML 90)Akepo Field (OML 90)Akepo Field (OML 90)Oando Akepo entered into a farm in agreement with Exile, pursuant towhich the Group acquired a 30% working interest in a Marginal FieldsFarm Out Agreement with respect to the Akepo field among the NNPC,Chevron and Sogenal Under a JOA between Sogenal, Exile and OandoExploration & Production, Sonegal is the operator of the field.

The Akepo field is located in shallow water in the Niger Delta, on anarea of 25.7 km2 within OML 90. The field is currently in the developmentstage.

OPL 278OPL 278OPL 278OPL 278OPL 278In January 2006, OEPL acquired a 60% working interest pursuant to aPSC among the Group, CAMAC, Allied Energy and First Axis and theNNPC, in respect of OPL 278. OPL 278 is operated by OEPL under aJOA made between OEPL, CAMAC, Allied Energy and First Axis.

OPL 278 is located offshore of Rivers State in a transition zone (swampto shallow marine) on an area of 91.9 km2. Three prospects have beenidentified in OPL 278, which are Ke, Prospect A and Prospect B.

OPL 236OPL 236OPL 236OPL 236OPL 236OEPL was awarded this block in May 2007 and the Production SharingContract was signed with NNPC in February, 2008. This conferredOEPL with a 95% working interest and Operator of the block. RFOVentures is the local content vehicle (LCV) with a 5% participatoryinterest. The block is located onshore Akwa-Ibom State with a totalacreage of 1,650SqKm.

A Global Memorandum of Understanding (GMOU) was signed withthe Ukana community in August 2008.

OPL 282OPL 282OPL 282OPL 282OPL 282On 8 August 2006, OEPL acquired a 4% working interest in the PSCbetween NAOC, Alliance Oil Producing Nigeria Limited and NNPC, inrespect of OPL 282 (the “OPL 282 PSCOPL 282 PSCOPL 282 PSCOPL 282 PSCOPL 282 PSC”). NAOC holds a 90% workinginterest in the OPL 282 PSC, while AOPN, which represents the localcontent vehicle in OPL 282, holds the remaining 10% working interest.The Group holds 40% of the shares in AOPN, while ARC Oil and GasNigeria Limited holds the remaining 60%. OPL 282 is operated byNAOC under a JOA made between NAOC and AOPN.OPL 282 is located in a transition zone (onshore to shallow marine) inBayelsa State, on an area of 695 km2. This block is currently in theexploration and appraisal phase.

Review of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceReview of Financial PerformanceOando Exploration and Production delivered a turnover for the yearended December 31st 2009 of N12.22billion (22.1% above 2008performance) and a PAT of N1.08billion (9.3% above 2008performance).

Looking Forward to 2010Looking Forward to 2010Looking Forward to 2010Looking Forward to 2010Looking Forward to 2010

Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010We are very optimistic about 2010 especially as the industry expectsto be repositioned by the much anticipated passage of the PetroleumIndustry Bill (PIB) and Nigerian Content Bill by the National Assembly.Both bills are expected to increase our footprint in the industry as itwould present more opportunities for us to acquire more acreage fromthe International Oil Companies (IOC’s) and farm-into under-performingassets that have near-term production profiles.

Furthermore, we shall continue to position ourselves as the preferredpartner of choice to companies seeking to gain entry into the Nigeriaoil industry and the Gulf of Guinea.

Our focus is to increase current daily production to 10,000bopd/dailyand grow our reserves accordingly to deliver increased shareholdervalue to our stakeholders both locally and offshore.

Oando Energy Services DivisionOando Energy Services DivisionOando Energy Services DivisionOando Energy Services DivisionOando Energy Services DivisionThe company continued with consolidation of its existing product servicelines and expanded its swamp rigs fleet with the purchase of twoadditional rigs bringing the swamp rig fleet up to five. We won additionalcontracts in our drilling fluids and drill bits businesses.

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However, the continued global economic downturn, slow recoveryand specifically the financial crises in Nigeria coupled with thecontinued attacks in the Niger Delta had an adverse effect on thecompany’s activities and results in 2009.

In spite of the global challenges and the militants attack on oilinstallations in the Niger Delta Region, we recorded some landmarkachievements. The company was announced winner of the $150 millionAGIP/NNPC JV competitive tender for two swamp rigs. This tenderrepresented the company’s first participation in a rigs competitivetender.

The contract with AGIP was signed in May 2009, whilst our HighTemperature, High pressure rig named OES Integrity, procured for thepurpose of this contract, was delivered into Nigeria by Dock wise, theworld’s largest heavy lift carrier, in March 2009. A contractual upgraderequirement on the OES Integrity rig which commenced at the rigshipyard in Indonesia in 2008 was completed in Nigeria, resulting inadditional income of $35million accruing to the company over the periodof the contract.

In June of 2009, we completed the procurement of two swamp rigsfrom Shell. One is a conventional rig named OES Professionalism,while the other has a special feature known as the cantilever and namedOES Passion.

OES Passion, with its cantilever functionality, has a static hook loadrating of 1.5M lbs and is capable of drilling up to 30,000ft. The drawwork is an Oilwell E3000 system. Other equipment installed on the riginclude: three 16-645/EMD engines, three Oilwell A1700PT mud pumpsand a TDS-3 top drive. The Cantilever functionality of this rig enablesthe rig drill multiple well slots while remaining at the same client location.The rig is currently in a Shell tender and we are confident of a positiveoutcome.

OES Professionalism is a 3000HP rig equipped with a 10,000 psi BOPSystem. It is also equipped with a Pyramid mast and substructurewith static hookload rating of 2.0M lbs, it is capable of drilling up to25,000ft. The rig has an Ideco E3000 drawwork system, three 16-645-E8/EMD engines, three Oil wells A1700PT mud pumps and a TDS-3H top drive. The rig is currently stacked whilst the company preparesfor its refurbishment work expected to commence in the fourth quarterof 2010.

On 14th of August 2009, the OES Integrity rig commenced operationswith Agip at its oil fields in Bayelsa state. The rig worked for a total of145 days in 2009 with a record 96% utilization rate. As a result of thisnew business line, revenue growth of 30 % was recorded over thesame period in 2008.

Drill BitsDrill BitsDrill BitsDrill BitsDrill BitsIn the midst of the low drilling activity from the operators in the NigerDelta the drill bits business was able to grow her market share from

the previous year’s 19% position to 22% in 2009. This achievementwas hinged on four key areas: Better customer service delivery, closerties with Directional Drilling companies, strategic collaboration withcompetitors, and strengthening the business key assets- her talentpool. These four pedestals have led to a re-definition of the businessofferings from the traditional commodity mindset to a service orientation.This solid foundation will herald a new era of increased revenue asdrilling activity goes on the increase.

Drilling FluidsDrilling FluidsDrilling FluidsDrilling FluidsDrilling FluidsThe business continued to provide services to its existing customersduring the year and moved up the value chain by providing other servicesthat were previously provided by our technical partners. We addednew contract to the existing contracts from the International OilCompanies. Activity dropped during the year with an 80% reductionin revenue over the same period last year. This was primarily due tothe drop in drilling activity as a result of the disturbances in the NigerDelta region. Chevron released one of the Joint Venture rigs wherewe provided drilling fluids, while activity also dropped on SNEPCO’sBonga field, where we currently participate in drilling fluids and mudengineering services.

We developed capacity during the year via training of people and gainedmore knowledge of the business. We also signed an MOU with a leadingChemicals Specialty Company in Australia to provide us with the variouscomponents of chemicals required for the services we provide.Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010We expect that with the Federal Government’s amnesty program forNiger Delta militants would lead to a sharp reduction in the NigerDelta unrest. Based on this assumption, the International OilCompanies have set aggressive drilling targets for 2010 and as aservice company we expect to benefit from this through increase indemand for our products and services.

We also plan to spend the first half of the year refurbishing two of ourthree rig fleets not yet in contract, in readiness for swamp drillingoperations in 2010..The Drill Bit business will continue to consolidate her position and winmore contracts with the major IOC’s whose activities constitute 80%of the total drilling activity in Nigeria. There will also be a strongfocus on the marginal operators with emphasis on providing a fit forpurpose bit solutions to enable the drilling of wells at the cheapestpossible cost.

We are confident that with the government policies and the aggressivelocal content drive of the Federal Government, service companieslike ours with world class standards will grow and increase value toshareholders in 2010 and beyond.

DividendDividendDividendDividendDividendThe directors are pleased to recommend the payment of a dividend ofN 3.00 per ordinary share of fifty kobo each held. The recommended

36

dividend is subject to the deduction of appropriate withholding taxes.If the dividend recommended is approved and declared, thoseshareholders whose names appear in the Company’s Register ofMembers kept in Nigeria as at the close of business on 20th of April,2010, shall have dividend warrants posted to them or have theirdesignated bank accounts credited directly on the 31st day of August2010. Dividends due to Shareholders whose names appear on theSouth African Register of Members at the close of business on the20th of April 2010 (certificated or dematerialized), will, on the 31st ofAugust 2010, either be electronically transferred to shareholders’ bankaccounts or, in the absence of suitable mandates have dividendcheques posted to them, or will have their accounts, at their CSDP orbroker credited.

Any dividend payable on or in respect of an Oando share which isunclaimed may be invested or otherwise made use of by Oando, at thediscretion of the directors, until claimed. Any dividends which remainunclaimed for a period of 12 years from the date when such dividendsbecame due for payment shall, if the directors so resolve, be forfeitedto the Company. No unpaid dividend shall bear interest as against theCompany.

Oando has maintained an informal dividend policy as a result ofextensive growth in its businesses. As the Company transits from itsaggressive growth phase to a consolidation phase, the directors willmove to adopt a more formal dividend policy which will balance steadydividend payments with adequate equity retention for future growth. Inthe interim, the Company has not entered into any arrangements forwhich future dividends have been or will be waived.

DirectorsDirectorsDirectorsDirectorsDirectors

The BoardThe BoardThe BoardThe BoardThe BoardIn compliance with Corporate Governance and best practices, AlhajiHamidu Mahmud, an Independent Non-Executive Director, who hasserved on the Board for nine years, is not presenting himself for re-election this year. Alhaji Mahmud was the Chairman of the AuditCommittee and a member of the Governance and NominationsCommittee. Mr. Ademola Akinrele SAN, a Non-Executive Directorwho has also served on the board for nine years, will not be presentinghimself for re-election. Mr. Akinrele SAN was the Chairman ofGovernance and Nominations Committee.

The composition of the Board of Directors was strengthened with theappointment of two independent Non-Executive Directors, Chief SenaAnthony, and Ms. Amal Pepple, CFR and a non Executive Director,Ms. Genevieve Sangudi effective, January 31, 2010 pursuant to Article88 of the Articles of Association of the Company. In accordance withthe said Article 88, their terms expire but being eligible, offer themselvesfor election at the general meeting.

Brief Curriculum Vitae of directors standing for election:Brief Curriculum Vitae of directors standing for election:Brief Curriculum Vitae of directors standing for election:Brief Curriculum Vitae of directors standing for election:Brief Curriculum Vitae of directors standing for election:

1.1.1.1.1. Chief Sena Anthony ‡Chief Sena Anthony ‡Chief Sena Anthony ‡Chief Sena Anthony ‡Chief Sena Anthony ‡Chief Anthony was appointed as an Independent Non-Executive

Director of the Company in January 2010. Prior to herappointment, Chief Anthony worked with the Federal Ministry ofJustice before joining the Nigerian National Petroleum Corporation(the “NNPCNNPCNNPCNNPCNNPC”) in 1978. She was appointed Group GeneralManager, Corporate Secretariat and Legal Division, as well asthe Secretary to the NNPC in July 1999 and was promoted to thelevel of Group Executive Director on 6 May 2007. Chief Anthonywas the first female to be appointed to such a position in theNNPC. She retired in January 2009 as the Coordinator (GroupExecutive Director Level) Corporate Secretariat and Legal Divisionas well as the Secretary to the Corporation and Board of the NNPCafter working for the NNPC for 31 continuous years. Chief Anthonywas also a director of Napoil Limited a crude oil and petroleumproducts trading company owned by NNPC, a director of BrassLNG Company and General Manager Legal and secretary to theboard of Nigeria LNG Limited. Chief Anthony obtained a Bachelorsdegree in Law from the University of Lagos in 1973 and was calledto the Nigerian Bar in 1974.

2.2.2.2.2. Ms. Amal Inyingiala Pepple CFR ‡Ms. Amal Inyingiala Pepple CFR ‡Ms. Amal Inyingiala Pepple CFR ‡Ms. Amal Inyingiala Pepple CFR ‡Ms. Amal Inyingiala Pepple CFR ‡Ms. Pepple was appointed as an Independent Non-ExecutiveDirector of the Company in January 2010. Prior to herappointment, Ms. Pepple served as a civil servant for theGovernment for 32 years. She has served as Deputy Secretary,Constituent Assembly Federal Republic of Nigeria, Secretary ofNational Assembly Provisional Office of Abuja, Clerk Designateof Senate National Assembly, and Clerk of Senate NationalAssembly. Ms. Pepple has also served as AdministrativeSecretary of the Social Democratic Party, Rivers State and SoleAdministrator of the United Nigeria Congress Party. She hasalso been Director of the Federal Civil Service and Director of theEconomic Affairs Office, Presidency. Ms. Pepple has served asPermanent Secretary in the following Ministries: Federal CivilService Commission, Federal Ministry of Transport, FederalMinistry of Information and National Orientation, Federal Ministryof Petroleum Resources, Federal Ministry of Commerce, FederalMinistry of Agriculture and Water Resources and Federal Ministryof Finance. On 16 June 2008, she was appointed as Head of theCivil Service of the Federation. Prior to joining the Government,Ms. Pepple started her career as a Lecturer in Political Scienceat Rivers State College of Education, Port Harcourt Rivers State.Ms. Pepple obtained a Bachelors degree in Political Science fromthe University of Ife, Ile-Ife, Nigeria, in 1975 and a Masters degreefrom the School of Oriental & African Studies, University ofLondon, United Kingdom, in 1981.

33333. Ms. Genevieve SangudiMs. Genevieve SangudiMs. Genevieve SangudiMs. Genevieve SangudiMs. Genevieve SangudiMs. Sangudi was appointed as a Non-Executive Director of theCompany in January 2010. Ms. Sangudi is also a director ofOOIM, OOIN and Notore Chemical Industries, respectively, andis a Managing Director and the Nigerian Country Manager ofEmerging Capital Partners, a leading private equity fund managerfocused on Africa with over $1.6 billion in capital under

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management. Ms. Sangudi had previously served as a directorin Blue Financial Services Limited and Continental Reinsurance.Prior to her current appointment, Ms. Sangudi served as aManaging Director of Emerging Capital Partners in WashingtonDC, USA, where she was responsible for originating, structuringand executing transactions in numerous sectors including oil &gas, financial services and industrials. Before joining EmergingCapital Partners in 2004, Ms. Sangudi worked in marketing andbusiness development at Procter & Gamble where she was partof a cross-functional team that oversaw several multi-billion dollarbrands. Ms. Sangudi obtained a Bachelors degree in ComparativeLiterature from Macalester College in 1997, an MBA in Finance &Strategy from Columbia Business School and a Masters inInternational Affairs from the School of International and PublicAffairs at Columbia University.

In accordance with Section 259(1) and (2) of the Companies &Allied Matters Act (CAMA), 2004 and Articles 92 & 93 of theCompany’s articles of association, the following Directors, whoare longest in office are retiring by rotation and will presentthemselves for re-election at this meeting:

• Major General Mohammed Magoro (Rtd), OFR, PSC,USAWC, Galadiman Zuru

• Mr. Omamofe Boyo• Mr. Mobolaji Osunsanya• Mr. Navaid BurneyThe names of Directors who held office during the year and at thedate of this report are as follows:

Non-Executive directorsNon-Executive directorsNon-Executive directorsNon-Executive directorsNon-Executive directors1. Major-General Mohammed Magoro (Rtd.), PSC, OFR, USAWC,

Galadiman Zuru2. Ademola Akinrele SAN3. Chief Sena Anthony ‡4. Navaid Burney5. HRM Michael Adedotun Gbadebo, CFR The Alake of Egbaland6. Valentine Oboden Ibru7. Alhaji Hamidu Mahmud ‡8. Onajite Paul Okoloko9. Ms. Amal Pepple CFR ‡10. Ms. Genevieve Sangudi

· ‡ - Independent Non-Executive - Independent Non-Executive - Independent Non-Executive - Independent Non-Executive - Independent Non-Executive

Executive directorsExecutive directorsExecutive directorsExecutive directorsExecutive directors11. Jubril Adewale Tinubu12. Omamofe Boyo13. Mobolaji Osunsanya14. Olufemi Adeyemo

Brief Curriculum VitaeBrief Curriculum VitaeBrief Curriculum VitaeBrief Curriculum VitaeBrief Curriculum Vitae

Non Executive directorsNon Executive directorsNon Executive directorsNon Executive directorsNon Executive directors1.1.1.1.1. Major General Mohammed MaMajor General Mohammed MaMajor General Mohammed MaMajor General Mohammed MaMajor General Mohammed Magorgorgorgorgorooooo (Rtd.) OFR. He is the

Chairman of the Board and a Non-Executive Director of theCompany. Major General Magoro (Rtd) was appointed to theBoard on 17 July 2000 and has held the position of Chairmansince 2000. From 1984 to 1985, Major General Magoro (Rtd)served as the Federal Commissioner of Transport and from 1987to 1991 as the Minister of Internal Affairs. In addition, he servedon the board of the National Maritime Authority from 1987 to 1991.Major General Magoro (Rtd) is a retired General of the NigerianArmy. He currently sits on the board of Fidelity Pension ManagersLimited as well as the Board of Trustees of the Peoples DemocraticParty.

2.2.2.2.2. Ademola Akinrele SANAdemola Akinrele SANAdemola Akinrele SANAdemola Akinrele SANAdemola Akinrele SANMr. Akinrele (SAN) was appointed as a Non-Executive Directorof the Company on 21 July 2001. He was called to the NigerianBar in 1983 and has served as a partner in the law firm F. O.Akinrele & Co. since 1987. Since 2008, Mr. Akinrele has alsoserved as a Director of Danos & Curole Marine Contractors NigeriaLtd. He is a member of the Nigerian Bar Association, a SeniorAdvocate of Nigeria and a fellow of the Chartered Institute ofArbitrators in the United Kingdom. Mr. Akinrele obtained aBachelor of Laws degree from University College London, UK, in1982 and a Master of Laws degree from the University ofCambridge, UK, in 1984.

33333. Mr. Navaid BurneyMr. Navaid BurneyMr. Navaid BurneyMr. Navaid BurneyMr. Navaid BurneyMr. Navaid Burney was appointed as a Non-Executive Directorof the Company on 27 May 2008. Mr. Burney is a Director andHead of African Private Equity in Standard Bank. Prior to hiscurrent role, Mr. Burney was a managing director and foundingpartner of Emerging Capital Partners (“ECPECPECPECPECP”), a leading Africafocused private equity fund manager from 2005 to 2009.Mr. Burney was responsible for ECP’s Johannesburg officesourcing, transacting and monitoring investments in a numberof high growth sectors. Mr. Burney was also a Non-ExecutiveDirector representing ECP on the boards of directors of NotoreChemical Industries and Ocean and Oil Investments Limitedfrom 2006 to 2009 and from 2007 to 2009, respectively. Prior tojoining ECP, Mr. Burney worked as a General Manager ofInvestment Banking of First Merchant Bank of Zimbabwe from1997 to 2000. From 1993 to 1997, Mr. Burney was a SeniorInvestment Officer with the International Finance Corporation(“IFCIFCIFCIFCIFC”), where he focused on mining finance and provided advisoryservices in Chile, Venezuela, Peru, Sierra Leone, Zimbabweand Gabon. Prior to joining the IFC, Mr. Burney was an AssociateManager with Union Carbide Corporation’s treasury and gainedinternational banking experience from assignments in New York,Paris and Abu Dhabi. Mr. Burney has served on the boards of

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directors of several companies. He currently serves on theboards of directors of Central African Gold plc, De RusticaEstates, Tourism Services Zimbabwe and Touch the Wild PtyLtd as a Non Executive director. Mr. Burney obtained a Bachelorsdegree in Economics from Georgetown University, USA, in 1983and an MBA in Finance and Accounting from the University ofCalifornia, Berkeley, USA, in 1990.

44444. HRM Michael Adedotun Gbadebo, CFR, The Alake ofHRM Michael Adedotun Gbadebo, CFR, The Alake ofHRM Michael Adedotun Gbadebo, CFR, The Alake ofHRM Michael Adedotun Gbadebo, CFR, The Alake ofHRM Michael Adedotun Gbadebo, CFR, The Alake ofEgbalandEgbalandEgbalandEgbalandEgbaland

HRM Gbadebo is the Alake (King) of Egbaland in Nigeria andwas appointed as a Non-Executive Director of the Company on10 April 2006. Prior to his coronation as the Alake of Egbaland in2005, HRM had a successful career in the Nigerian Armyculminating in his appointment as the Principal Staff Officer tothe Chief of Staff, Supreme Headquarters from January 1984 toSeptember 1985. He was also awarded military honours such asthe Forces Service Star and the Defence Service Medal. HRMGbadebo obtained a Bachelor of Arts degree from the Universityof Ibadan, Nigeria, in 1969. He graduated from the Staff Collegeof the Nigerian Armed Forces in 1979 and has served on theboards of several companies including Ocean and Oil ServicesLimited. HRM Gbadebo currently serves on the boards of GlobalHaulage Resources Limited and Dolphin Travels Limited.

55555. Valentine Oboden IbruValentine Oboden IbruValentine Oboden IbruValentine Oboden IbruValentine Oboden IbruMr. Ibru was appointed as a Non-Executive Director of theCompany in June 2004. Mr. Ibru currently serves on the board ofdirectors of OOH. He is also currently the Managing Directorand Chief Executive Officer of Oceanic Capital Co. Limited, asubsidiary of Oceanic International Bank Plc in which he alsoserves on the board of directors, where he has been working forover 15 years in various capacities. Additionally, Mr. Ibru serveson the boards of directors of Aero Contractors Nigeria Limitedand Midwestern Oil & Gas, respectively. Mr. Ibru obtained aBachelor of Science degree in Finance and Decision Sciencefrom the University of San Francisco, California, USA, in 1989and a Masters degree in Business Administration from theInternational Graduate School of Management (IESE), Navarra,Spain, in 1997.

6.6.6.6.6. Alhaji Hamidu Mahmud‡Alhaji Hamidu Mahmud‡Alhaji Hamidu Mahmud‡Alhaji Hamidu Mahmud‡Alhaji Hamidu Mahmud‡Alhaji Mahmud was appointed as a Non-Executive Director ofthe Company on 21 July 2001. He is the principal partner in thelaw firm of Hamid Mahmud & Co. Mr. Mahmud was appointed tothe Gongola State Transport Service in 1994 and served on theboard of the Gongola State Broadcasting Corporation from 1990to 1992. He served as a Senator of the Federal Governmentfrom January 1998 to December 1998. Alhaji Mahmud’s mostrecent term was on the Securities and Exchange Commission.Alhaji Mahmud is a member of the Institute of Directors of Nigeria.He obtained a Bachelor of Laws degree from the Ahmadu Bello

University, Zaria, Nigeria, in 1980 and is a member of the NigerianBar Association.

7.7.7.7.7. Onajite Paul OkolokoOnajite Paul OkolokoOnajite Paul OkolokoOnajite Paul OkolokoOnajite Paul OkolokoMr. Okoloko was appointed as a Non-Executive Director of theCompany in 17 July 2000. He was the Managing Director andChief Executive Officer of Oando Energy Services Limited from2001 to 2006. Mr. Okoloko was one of the founding members ofthe Ocean and Oil Group and focused on the trading and energyservices business lines. He currently serves on the boards ofdirectors of OOH, OOIM, OOIN and OOHN. Mr. Okoloko iscurrently the Chief Executive Officer/Managing Director of NotoreChemical Industries Limited. Mr. Okoloko currently serves onthe boards of directors of Delta Environmental Logistics Limited,Midwestern Oil & Gas, Notore Chemical Industries and UnionBank of Nigeria Plc. Mr. Okoloko obtained a Bachelor of ScienceDegree in Economics from the University of Benin, Nigeria, in1986 and an Executive MBA from Harvard Business School, USA,in 2008.

‡ - ‡ - ‡ - ‡ - ‡ - Independent Non Executive

Group Executive DirectorsGroup Executive DirectorsGroup Executive DirectorsGroup Executive DirectorsGroup Executive Directors

8.8.8.8.8. Adewale TinubuAdewale TinubuAdewale TinubuAdewale TinubuAdewale TinubuMr. Tinubu is the Group Chief Executive of the Company, havingbeen appointed to this position in June 2001. Prior to this, hewas Executive Director, Finance and Administration of theCompany from July 2000 to June 2001. Mr. Tinubu was appointedas an Executive Director of the Company in July 2000 and hasserved as a Director of the Company since 2000. Mr. Tinubucurrently serves on the boards of several of the Group’ssubsidiaries, including Gaslink Nigeria Limited, Oando Supply &Trading, Oando Energy Services Limited and Oando Explorationand Production Limited. Mr. Tinubu also serves on the boards ofdirectors of several other companies, including OOH, OOIM,Ocean and Oil Investments (Nigeria) Limited (“OOINOOINOOINOOINOOIN”), Oceanand Oil (Nigeria) Limited (“OOHNOOHNOOHNOOHNOOHN”), Tilca Nigeria Limited, BrollProperties Services Limited (Broll Nigeria), Trojan Estates Ltd,Avante Capital Partners Limited and Avante Property AssetManagement Services. He is also the Chairman of the Major OilMarketers’ Association of Nigeria and a member of the Instituteof Directors of Nigeria. Mr. Tinubu is a shareholder of OOH,Oando’s parent company. Mr. Tinubu commenced his career withthe law firm K. O. Tinubu & Co in 1992. Mr. Tinubu obtained aBachelor of Laws degree from the University of Liverpool, UK, in1988 and a Master of Laws degree from the London School ofEconomics, UK, in 1989.

8.8.8.8.8. Omamofe BoyoOmamofe BoyoOmamofe BoyoOmamofe BoyoOmamofe BoyoMr. Boyo is the Deputy Group Chief Executive of the Company,having been appointed to this position in 2006. Prior to hisappointment, Mr. Boyo was Executive Director, Marketing, of the

39

Group from 2000 to 2002 and the Deputy Managing Director/Chief Operating Officer from 2002 to 2006. Mr. Boyo serves onthe boards of several companies in the Group, including Gaslink,Oando Exploration and Production Limited, Oando MarketingLimited and Oando Supply & Trading. Mr. Boyo is currently adirector of OOH, OOIM, OOIN, OOHN, Avante Property AssetManagement Services, Indumines Ltd, Quantum Voice SystemsLtd, I2I Nigeria Ltd and Lagos Prepatory School Ltd. Prior to hisappointment as Executive Director of the Company in 1999,Mr. Boyo was an Executive Director of Ocean and Oil ServicesLimited from 1994 to 1999. Mr. Boyo started his career with FRAWilliams’ Chambers, a Nigerian law firm, where he specialised inshipping and oil services and worked on several joint venturetransactions between the Nigerian National Petroleum Corporationand major international oil companies. Mr. Boyo obtained aBachelor of Laws degree from Kings College, University ofLondon, in 1989.

10.10.10.10.10. Mobolaji Olatunbosun OsunsanyaMobolaji Olatunbosun OsunsanyaMobolaji Olatunbosun OsunsanyaMobolaji Olatunbosun OsunsanyaMobolaji Olatunbosun OsunsanyaMr. Osunsanya was appointed as an Executive Director of theCompany on 27 June 2007. Mr. Osunsanya has been the ChiefExecutive Officer of Oando Gas and Power Limited since10 September 2007 and Gaslink Nigeria Limited since January2004. Prior to his appointment as the Chief Executive Officer ofGaslink Nigeria, he was the Chief Marketing Officer – Commercialof Oando Marketing Limited. Prior to joining the Company inAugust 2001, Mr. Osunsanya was an executive director at AccessBank Plc from November 1998 to March 2001 and an assistantgeneral manager at Guaranty Trust Bank Plc from 1992 to 1998.From 1988 to 1992, Mr. Osunsanya worked as a consultant withArthur Andersen, Nigeria (now KPMG professional services)gaining experience in the banking, oil and gas and manufacturingindustries. Mr. Osunsanya obtained a Bachelors degree inEconomics from the University of Ife, Nigeria, in 1985 and aMasters degree in Economics from the University of Lagos,Nigeria, in 1987.

11.11.11.11.11. Mr. Olufemi AdeyemoMr. Olufemi AdeyemoMr. Olufemi AdeyemoMr. Olufemi AdeyemoMr. Olufemi AdeyemoMr. Adeyemo was appointed as Group Executive Director on30 July 2009 and as the Chief Financial Officer of the Companyin October 2005. Mr. Adeyemo is currently also an IndependentDirector of Easy Fuel Limited. Prior to joining the Company,Mr. Adeyemo was a Management Consultant at McKinsey & Co.from 1998 to 2005 and has extensive experience in strategicconsulting, especially in the areas of mergers and acquisitions,operations reviews, strategy development and implementation aswell as organisation redesign and financial management. Beforejoining McKinsey & Co., Mr. Adeyemo was the Financial Controllerand Head of Operations from 1994 to 1997 at First SecuritiesDiscount House Limited, a leading investment house in Nigeria.Mr. Adeyemo worked as an auditor with PwC from 1988 to 1992.He has been a member of the Institute of Chartered Accountants

of Nigeria for 13 years. He obtained a Master of Science degreein Finance from the London Business School, UK, in 1998, aMaster of Science degree in Mechanical Engineering from theUniversity of Lagos, Nigeria, in 1988 and a Bachelor of Sciencein Mechanical Engineering from the University of Ibadan, Nigeria,in 1987.

Corporate Governance & Statement of ComplianceCorporate Governance & Statement of ComplianceCorporate Governance & Statement of ComplianceCorporate Governance & Statement of ComplianceCorporate Governance & Statement of ComplianceThe Company is dedicated to the protection and promotion ofshareholders’ interests. The Company recognises the importance ofthe adoption of superior management principles, its valuablecontribution to long term business prosperity and accountability to itsshareholders.

The Company complies with the requirements of the Nigerian corporategovernance standards through its compliance with the principles underthe Code. The Code prescribes guidelines for best practices to befollowed by publicly quoted companies and for all other companieswith multiple stakeholders registered in Nigeria. Although it is not anenforceable statute, public companies and other companies withmultiple stakeholders are encouraged to comply with its principles witha view to aligning their operations with international best practices.The Company meets the requirements of the Nigerian corporategovernance standards by complying with the principles under the Code.For example, according to the Code, the composition of the Board ofDirectors should ensure diversity of experience without compromisingcompatibility, integrity, availability and independence, and it shouldconsist of a mix of not more than 15 Executive and Non-Executivedirectors headed by a Chairman. In addition, the positions of theChairman and the Chief Executive Officer should be held by differentpersons, in order to avoid undue concentration of power. The Companycomplies with all these principles.

The Company has adopted a Code of Business Conduct & Ethicswhich defines the Company’s mission within a corporate governanceframework. The Code was approved by the Board in December 2007and is applicable to all employees (including contract staff and thirdparty personnel seconded to the Company), managers as well asDirectors and business partners of the Company. It also requires allDirectors and employees to be trained and annually certified on thesalient provisions of the Company’s Code of Business Conduct &Ethics. The training is conducted using a web based training facilityand is part of the induction on boarding process for new staff members.

Compliance Office initiativesCompliance Office initiativesCompliance Office initiativesCompliance Office initiativesCompliance Office initiativesIn the year 2009, the Compliance Office conducted the first onlinerecertification exercise on the Code of Business Conduct and Ethicsfor all staff and directors in the Company. All staff and directors ofOando across West Africa were trained, certified and re-certified usinga web based training. Oando maintains its fervent commitment to bestbusiness practice culture in line with the highest international standard,even where Oando is not obligated to do so.

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The Compliance Office also complemented the Whistle Blowing Policyapproved by the board for use by the Company in 2008, with theimplementation of a whistle blowing hotline. The hotline is hosted byKPMG Forensics Services. The Compliance Office subsequentlyembarked on a Companywide training of all staff and directors on theuse of the hotline facilitated by KPMG professional services. TheCompany’s Business Partners across West Africa were also trainedon the whistle blowing Policy and the use of the KPMG hotline services.

In the Company’s bid to meet the highest standards of service andproductivity, the Compliance Office embarked on conducting trainingson the Code of Business Conduct for business partners of OandoMarketing Limited (dealers, transporters and suppliers). Oando takesinto account the continuous need to enlighten and train its BusinessPartners on the importance of the implementation of the Company’spolicies and standards.

Also in the year under review the Compliance Office commenced themonthly publication of the Ethics Watch, a newsletter created with theintent of creating awareness about ethics, and also the publication ofethical tips on the intranet.

In line with corporate objectives, the Compliance Office alsoconducted 2 surveys in the year to receive feedback from staff on itsactivities. The survey covered questions on how the ComplianceOffice improved on ethical awareness in entities, awareness of theCompany core values, effectiveness of the whistle blowing hotlinefacility, responses to misconduct and unethical practices by theCompliance Office, sanctions meted out for violation of companypolicies among other questions. Oando confirmed its desire to demonstrably promote good ethicalbehaviour and maintain the highest standard of its corporate reputation,by also becoming signatory to the United Nations Global Compact andConvention on Business Integrity on 10 June, 2009 and 16th November,2009 respectively. Also, the Office conducted the first Companywidesensitization celebration of the World Anti- Corruption Day on 9thDecember 2009. The World Anti-Corruption day was initiated by theUnited Nations Global Compact Working Group and is celebratedworldwide

In the fulfilment of its visions and values, Oando continues to strivetowards global excellence. The Compliance Office commenced theimplementation of the Oando PLC Records Management Policy todeliver a degree of consistency in the management of records acrossthe organization while also ensuring authentic, reliable and usablerecords are created, capable of supporting the Company’s businessfunctions and activities.

In its pursuit of excellence, the Governance Office, comprising theGroup Corporate Secretariat and the Compliance Office is leveragingon Information Technology and is implementing ICSA BlueprintOneWorld, a multi jurisdictional web based software application thatenables users on an enterprise wide basis to store and protect

information for the organisation. The application includes, among otherthings, an extensive compliance diary, which lists an overview of alltasks due to be completed for any given day, week or month, identifieskey compliance dates and ensures compliance rules are automaticallyapplied based on the jurisdiction of the company and ensures thatrecorded data complies with the local regulations.

Board of Directors’ Governance StructureBoard of Directors’ Governance StructureBoard of Directors’ Governance StructureBoard of Directors’ Governance StructureBoard of Directors’ Governance StructureThe Board of Directors of the Company is responsible for setting thestrategic direction of the company and for overseeing and monitoringits business affairs. The Board ensures that the company is fully awareof its responsibility to all relevant stakeholders in the conduct of itsoperations. The Board is responsible for the development andimplementation of a sustainable policies, which reflect the company’srecognition of its responsibility to all stakeholders who are affected bythe company in the performance of its operations which include,customers, employees, shareholders, communities and theenvironment.

The Board of Directors of Oando recognises the importance of bestcorporate governance principles, its valuable contribution to long termbusiness prosperity and accountability to its shareholders.

Board Performance EvaluationBoard Performance EvaluationBoard Performance EvaluationBoard Performance EvaluationBoard Performance EvaluationThe results of the formal and rigorous evaluation of its performanceand that of individual Directors which it undertook in 2008 - 2009 werepresented to the whole Board by the evaluators, KPMG ProfessionalServices for consideration and adoption. The recommendations arebeing implemented. The Board believes that a Performance Evaluationserves to continuously stimulate a high level of performance, identifythe strengths and weaknesses of individual Directors and articulateways to bridge identified gaps thereby leading to further strengtheningof the Board. The next Performance Evaluation is scheduled forDecember 2010 to January 2011.

The Board’s AuthorityThe Board’s AuthorityThe Board’s AuthorityThe Board’s AuthorityThe Board’s AuthorityThe Board of Directors scope of authority are set forth in the Company’sDelegation of Authority in conformity with relevant legislation and bestpractice recommendations.

There is a formal schedule of matters reserved for the decision of theBoard, which is reviewed regularly. This includes (inter alia):• strategy and objectives;• business plans and budgets;• changes in capital and corporate structure;• accounting policies and financial reporting;• internal controls;• major contracts;• capital projects;• acquisitions and disposals;• communications with shareholders; and• Board membership.

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Board’s Composition and IndependenceBoard’s Composition and IndependenceBoard’s Composition and IndependenceBoard’s Composition and IndependenceBoard’s Composition and IndependenceThe Board of Directors has a broad range of expertise that covers theoil sector, the Company’s main business and the geographical areas.Each individual Director has experience, knowledge, qualifications,expertise and integrity necessary to effectively discharge the duties ofthe Board of Directors.

The Company believes that experienced Directors with diverse industrybackground are essential for the provision of a successful strategicdirection for the Company. The composition, competencies and mix-of -skills are adequate for its oversight duties and the development ofthe corporate vision and strategy.

The Board of Directors through its Governance & NominationsCommittee establishes which members are independent and it alsorecommends the appropriate size of the board. The size of the Boardis predetermined by the Article 78 of the Company’s Articles ofAssociation.

Re-election of DirectorsRe-election of DirectorsRe-election of DirectorsRe-election of DirectorsRe-election of DirectorsA maximum of one third of the Directors, who are the longest in officesince their last appointment are required to retire by rotation and areeligible for re-election.

Board’s Duties & ResponsibilityBoard’s Duties & ResponsibilityBoard’s Duties & ResponsibilityBoard’s Duties & ResponsibilityBoard’s Duties & ResponsibilityDirectors act in good faith, with due care and in the best interests ofthe Company and all its shareholders – and not in the interests of anyparticular shareholder – on the basis of relevant information. EachDirector is expected to attend all Board of Directors meetings andapplicable committee meetings.

The Company does not prohibit its Directors from serving on otherBoards of Directors. Directors are however, expected to ensure thatother commitments do not interfere with the discharge of their duties.Directors shall not divulge or use confidential or insider informationabout the Company.

The Board in discharging its duties adopts the best practice principles,some of which are highlighted thus:

• The Company believes that the Chairman of the Board should bea Non-Executive director.

• To maintain balance of interest and ensure transparency andimpartiality, a number of the Directors are independent. Theindependent Directors are those who have no material relationshipwith the Company beyond their Directorship.

• Directors abstain from actions that may lead to conflict of interestand are to ensure they shall comply with the Company’s Policyon Related Party Transactions.

Training and access to AdvisersTraining and access to AdvisersTraining and access to AdvisersTraining and access to AdvisersTraining and access to AdvisersThe Company has a set induction programme for new directors onthe Company’s business and other information that will assist themin discharging their duties effectively. The Company believes in andprovides continuous training and professional education to its Directors.The Board of Directors and Board Committees have the ability to retainexternal counsel to advice on matters, as they deem necessary.

Working ProceduresWorking ProceduresWorking ProceduresWorking ProceduresWorking ProceduresThe Board of Directors meets according to a fixed schedule, set at thebeginning of each year, which enables it to properly discharge its duties.As a rule, the Board of Directors meets at least five (5) times a year.Non-Executive Directors are required to meet separately fromexecutive members at least once a year.

All Directors are expected to be provided with a concise butcomprehensive set of information by the Company Secretary in a timelymanner, concurrently with the notice of the Board meeting, no lessthan fourteen (14) days before each meeting. This set of documents isto include:• an agenda;• minutes of the prior Board meeting;• key performance indicators, including relevant financial

information prepared by management, and clear recommendationsfor action.

The Board of Directors through the Company Secretary keeps detailedminutes of its meetings that adequately reflect Board discussions,signed by the Chairman and includes voting results on an individualbasis where decisions are not unanimous. The Company keepsrecordings of important Board decisions, such as the approval ofextraordinary transactions.

RemunerationRemunerationRemunerationRemunerationRemunerationThe remuneration of Non-Executive Directors is competitive and iscomprised of an annual fee and a meeting attendance allowance. Theremuneration package shall, however, not jeopardize a Director’sindependence. Executive Directors are not paid fees beyond theirexecutive remuneration package. The Board of Directors shall, throughits remuneration committee, periodically review the remuneration paidto Directors. The Company publicly discloses the remuneration of eachDirector on an individual basis. The Company will not provide personalloans or credits to its Non-Executive Directors. Further, the Companyshall not provide stock options to its Non-Executive Directors unlessapproved by shareholders in general meeting.

The Company Secretary is responsible to the Board, and is alsoavailable to individual Directors for advice and services.

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DirectorDirectorDirectorDirectorDirector AuditAuditAuditAuditAudit Governance & NominationsGovernance & NominationsGovernance & NominationsGovernance & NominationsGovernance & Nominations Strategic Planning & FinanceStrategic Planning & FinanceStrategic Planning & FinanceStrategic Planning & FinanceStrategic Planning & Finance Risk, Environment,Risk, Environment,Risk, Environment,Risk, Environment,Risk, Environment,Health & SafetyHealth & SafetyHealth & SafetyHealth & SafetyHealth & Safety

M. Magoro OFRJ. A. TinubuO. Boyo !M. Osunsanya !O. AdeyemoA. Akinrele SAN !Chief Sena Anthony ! !N. Burney !HRM M.A. Gbadebo CFR !V. O. Ibru ! !H. Mahmud ! !O. P. Okoloko ! !A. Pepple CFR ! !G. Sangudi !

Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31ststststst December 2009 December 2009 December 2009 December 2009 December 2009DirectorDirectorDirectorDirectorDirector 04-06-09(114th )04-06-09(114th )04-06-09(114th )04-06-09(114th )04-06-09(114th ) 29-07-09(115th )29-07-09(115th )29-07-09(115th )29-07-09(115th )29-07-09(115th ) 16-11-09(116th )16-11-09(116th )16-11-09(116th )16-11-09(116th )16-11-09(116th ) 17-12-09(117th )17-12-09(117th )17-12-09(117th )17-12-09(117th )17-12-09(117th )M. Magoro OFR ! ! ! !J. A. Tinubu ! ! ! !O. Boyo ! ! ! !M. Osunsanya ! ! ! !O. Adeyemo1 - - ! !A. Akinrele SAN ! ! ! !Chief Sena Anthony 2 - - - -N. Burney ! ! ! -HRM M.A. Gbadebo CFR ! ! ! !V. O. Ibru ! ! ! !H. Mahmud ! ! ! !O. P. Okoloko ! ! ! !A. Pepple CFR2 - - - -G. Sangudi2 - - - -1 elected 30 July 2009.2 appointed January 31, 2010

Board CommitteeBoard CommitteeBoard CommitteeBoard CommitteeBoard CommitteeUnder the Articles, the Directors may appoint Committees consistingof members of the Board and such other persons as they think fit andmay delegate [any of their powers] to such Committees. TheCommittees are required to use their delegated powers to conform tothe regulations laid down by the Board. Committee members areexpected to attend each Committee meeting, unless exceptionalcircumstances prevent them from doing so. All the Committeeshave terms of reference which guides them in the execution of theirduties. Each Committee reports to the Board of Directors. EachCommittee provides draft recommendations to the Board on mattersthat fall within the Board’s ambit. The following Committees arecurrently operating at the Board level:• Audit Committee (a Statutory Committee with shareholder

members);• Strategic Planning and Finance Committee;

• Governance and Nominations Committee; and• Risk, Environmental Health and Safety Committee.The Company’s Board Committee structure is as follows:

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Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31ststststst December 2009 December 2009 December 2009 December 2009 December 2009

DirectorDirectorDirectorDirectorDirector 27-01-09&27-01-09&27-01-09&27-01-09&27-01-09& 02-06-0902-06-0902-06-0902-06-0902-06-09 27-07-0927-07-0927-07-0927-07-0927-07-09 29-09-0929-09-0929-09-0929-09-0929-09-09 09-11-0909-11-0909-11-0909-11-0909-11-09 09-12-09&09-12-09&09-12-09&09-12-09&09-12-09& 14-12-200914-12-200914-12-200914-12-200914-12-200928-01-0928-01-0928-01-0928-01-0928-01-09 10-12-0910-12-0910-12-0910-12-0910-12-09

F. Atako ! ! ! - - - -N. Burney ! ! ! ! - ! !V. O. Ibru ! - - ! ! ! !O. P. Okoloko ! ! - ! ! ! -Ike Osakwe ! ! ! - - - -A. Pepple CFR1 - - - - - - -G. Sangudi1 - - - - - - -1 appointed 31 January 2010

Governance and Nominations CommitteeGovernance and Nominations CommitteeGovernance and Nominations CommitteeGovernance and Nominations CommitteeGovernance and Nominations CommitteeFollowing the recommendation of an external consultant, KPMGProfessional Services upon completion of the 2008-2009 BoardPerformance Evaluation for the 2008 financial year, the CorporateGovernance Committee, Nominations Committee and the RemunerationCommittee was consolidated into one Committee known as theGovernance and Nominations Committee

The Governance and Nominations Committee is responsible for thedevelopment of, compliance with and periodic review of the Company’scorporate governance policies and practices, the review and monitoringof policies concerning shareholder rights, conflict resolution, ethics,disclosure and transparency, evaluation and the Company’s internaldocuments (organisation and process), the review and setting of theBy laws of all of the Board Committees, identifying qualified Directorsand senior executives and ensuring that the Company’s policies supportthe successful recruitment, development and retention of directorsand managers.

The Governance and Nominations Committee is chaired byMr. Ademola Akinrele (SAN) and comprises four Non-ExecutiveDirectors, two of whom are independent Directors. The Governanceand Nominations Committee held three meetings in 2009.

The members of the Governance & Nominations Committee are asfollows:Mr. A. Akinrele SAN (Chairman)Chief Sena AnthonyMr. O. IbruAlhaji H. Mahmud

DirectorDirectorDirectorDirectorDirector 29-07-0929-07-0929-07-0929-07-0929-07-09 16-09-0916-09-0916-09-0916-09-0916-09-09 28-10-0928-10-0928-10-0928-10-0928-10-09A. Akinrele SAN ! ! !S. Anthony1 - - -V. O. Ibru ! ! !H. Mahmud ! ! !1 appointed January 31, 2010

Risk, Environmental Health and Safety CommitteeRisk, Environmental Health and Safety CommitteeRisk, Environmental Health and Safety CommitteeRisk, Environmental Health and Safety CommitteeRisk, Environmental Health and Safety CommitteeThe Risk, Environmental Health and Safety Committee is responsiblefor reviewing the policies and processes established by managementwhich are designed to implement the risk, environmental, health andsafety quality policy of the Company and ensuring the Company’scompliance with international standards of risk, environmental, healthand safety quality.

Each of the Committees has terms of reference which guide theCommittee in the execution of its duties. Each Committee reports tothe Board of Directors and makes recommendations to the Board onmatters referred to the Committee by the Board.

Strategic Planning and Finance CommitteeStrategic Planning and Finance CommitteeStrategic Planning and Finance CommitteeStrategic Planning and Finance CommitteeStrategic Planning and Finance CommitteeThe Strategic Planning and Finance Committee assists the Board ofDirectors in performing its guidance and oversight functions effectivelyand efficiently, by specifically defining the Company’s strategicobjectives, determining its financial and operational priorities, makingrecommendations regarding the Company’s dividend policy andevaluating the long term productivity of the Company’s operations. In

2009, the Strategic Planning and Finance Committee met seven times.The Strategic Planning and Finance Committee of the Company ischaired by Mr. Onajite Paul Okoloko.

The members of the Strategic Planning and Finance Committee areas followsMr. Onajite OkolokoMr. O. IbruMs. A. Pepple CFRMs. Genevieve Sangudi

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The members of the Risk, Environmental Health and Safety Committeeare as follows:Ms. A. Pepple CFRMr. N. BurneyMr. O. BoyoMr. M. OsunsanyaMr. O. Okoloko

Statutory CommitteeStatutory CommitteeStatutory CommitteeStatutory CommitteeStatutory Committee

Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeThe Audit Committee was established in compliance withSection 359(3) of the CAMA, which requires every listed company tohave an audit committee. In accordance with Sections 359(3) and(4) of the CAMA, the Audit Committee is made up of six members,three Non Executive Directors and three shareholders of the Company,who are elected at the Annual General Meeting. The members of theAudit Committee are not required to be independent. The AuditCommittee members meet at least three times a year, and the meetingsare attended by the appropriate executives of the Company, includingthe Group Chief Financial Officer and the internal control and auditmanager.

The Audit Committee’s duties include keeping under review the scopeand results of the external audit, as well as the independence andobjectivity of the auditors. The Committee also keeps under reviewinternal financial controls, compliance with laws and regulations andthe safeguarding of assets and the adequacy of the plan of the internalaudit, and reviews its audit reports. The Committee held three meetingsin 2009.

Audit Committee members:Audit Committee members:Audit Committee members:Audit Committee members:Audit Committee members:The members of the Audit Committee are as follows:HRM A. Gbadebo CFR - Non-Executive DirectorAlh. H. Mahmud - Non-Executive DirectorChief Sena Anthony - Non-Executive DirectorElder A. Ekpenyong - ShareholderMr. J. Onwughara - ShareholderMr. P. Eyanuku - Shareholder

Alhaji Hamidu Mahmud Alhaji Hamidu Mahmud Alhaji Hamidu Mahmud Alhaji Hamidu Mahmud Alhaji Hamidu Mahmud (Chairman)Alhaji Mahmud was appointed as a Non Executive Director of theCompany on 21 July 2001. He is the principal partner in the law firmof Hamid Mahmud & Co. Mr. Mahmud was appointed to the GongolaState Transport Service in 1994 and served on the board of the GongolaState Broadcasting Corporation from 1990 to 1992. He served as a

Senator of the Federal Government from January 1998 to December1998. Alhaji Mahmud’s most recent term was on the Securities andExchange Commission. Alhaji Mahmud is a member of the Institute ofDirectors of Nigeria. He obtained a Bachelor of Laws degree from theAhmadu Bello University, Zaria, Nigeria, in 1980 and is a member ofthe Nigerian Bar Association.

HRM Michael Adedotun Gbadebo, CFR, The Alake of EgbalandHRM Michael Adedotun Gbadebo, CFR, The Alake of EgbalandHRM Michael Adedotun Gbadebo, CFR, The Alake of EgbalandHRM Michael Adedotun Gbadebo, CFR, The Alake of EgbalandHRM Michael Adedotun Gbadebo, CFR, The Alake of EgbalandHRM Gbadebo is the Alake (King) of Egbaland in Nigeria and wasappointed as a Non-Executive Director of the Company on 10 April2006. Prior to his coronation as the Alake of Egbaland in 2005, HRMhad a successful career in the Nigerian Army culminating in hisappointment as the Principal Staff Officer to the Chief of Staff, SupremeHeadquarters from January 1984 to September 1985. He was alsoawarded military honours such as the Forces Service Star and theDefence Service Medal. HRM Gbadebo obtained a Bachelor of Artsdegree from the University of Ibadan, Nigeria, in 1969. He graduatedfrom the Staff College of the Nigerian Armed Forces in 1979 and hasserved on the boards of several companies including Ocean and OilServices Limited. HRM Gbadebo currently serves on the boards ofGlobal Haulage Resources Limited and Dolphin Travels Limited.

Elder Akpan Okorie EkpenyongElder Akpan Okorie EkpenyongElder Akpan Okorie EkpenyongElder Akpan Okorie EkpenyongElder Akpan Okorie Ekpenyong 1 1 1 1 1

Elder Akpan Okorie Ekpenyong attended the Federal EmergencyScience School, Onikan, Lagos, and has served in variousorganisations in different capacities. He served as the Audit CommitteeChairman of Co-operative Development Bank Plc from 2004 to 2005,and as a member of the Audit Committee and a Non-Executive Directorwith Okomu Oil Palm Company Plc from 1992 to 2004. He is currentlythe Chief Executive Officer of Dimac Nigeria Limited.

Mr. Job OnwugharaMr. Job OnwugharaMr. Job OnwugharaMr. Job OnwugharaMr. Job Onwughara 1 1 1 1 1

Mr. Onwughara holds a Master of Science degree in Banking andFinance from the University of Ibadan, Nigeria. He is a fellow of theChartered Institute of Bankers, London/Nigeria, an Associate of theInstitute of Credit Management, London and Member of the BritishInstitute of Management. He has served at various Managerial levelsat Savannah Bank and Crown Flour Mill Limited.

Mr. Peter EyanukuMr. Peter EyanukuMr. Peter EyanukuMr. Peter EyanukuMr. Peter Eyanuku11111

Mr. Peter Eyanuku studied Mechanical Engineering and has served invarious organizations in different capacities and has also served withthe National Directorate of Employment, Lagos as well as the LagosState Health Management Board. He was a Member of the AuditCommittee of the United Bank for Africa PLC and is presently also aMember of the Audit Committee of Airline Services & Logistics PLC.

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ShareholdingShareholdingShareholdingShareholdingShareholding PercentPercentPercentPercentPercentOwnershipOwnershipOwnershipOwnershipOwnership

(Number of Shares) (%Shareholding)

Gen. M. Magoro, (Rtd) OFR Nil NilMr. Adewale Tinubu 731,739 0.08%Mr. Omamofe Boyo 539,717 0.06%Mr. Mobolaji Osunsanya 287,344 0.03%Mr. Olufemi Adeyemo 312,242 0.03%Mr. A. Akinrele (SAN) 40,000 0.004%Chief Sena Anthony 565 0.00006%Mr. Navaid Burney Nil NilHRM Oba Michael Adedotun Gbadebo 15,000 0.002%Mr. V.O. Ibru 5,294 0.0006%Alhaji H. Mahmud 8,347 0.0009%Mr. O. P. Okoloko Nil NilMs. Amal Pepple CFR Nil NilMs. Genevieve Sangudi Nil Nil

Interests of Oando’s directors in terms of the equity incentiveInterests of Oando’s directors in terms of the equity incentiveInterests of Oando’s directors in terms of the equity incentiveInterests of Oando’s directors in terms of the equity incentiveInterests of Oando’s directors in terms of the equity incentiveschemeschemeschemeschemeschemeThe executive directors stand to benefit from the employee equityincentive scheme. See paragraph titled Staff equity parStaff equity parStaff equity parStaff equity parStaff equity participationticipationticipationticipationticipationscscscscscheme heme heme heme heme below for details of the scheme.

Directors’ interests in transactionsDirectors’ interests in transactionsDirectors’ interests in transactionsDirectors’ interests in transactionsDirectors’ interests in transactionsNone of the directors had a direct material interest in any transactionsthat were effected by Oando during:• the current or immediately preceding financial year; or• any preceding financial year and remain in any respect outstanding

or unperformed.

However, some of the directors hold directorships in other companiesor are partners in firms with which Oando had material transactionsduring the current financial year, as summarised below:

1.1.1.1.1. F. O. Akinrele & Co.F. O. Akinrele & Co.F. O. Akinrele & Co.F. O. Akinrele & Co.F. O. Akinrele & Co.F. O. Akinrele & Co. is a law firm based in Lagos, Nigeria, whoseservices are employed by the company. Mr. Ademola Akinrele SANis a partner at F. O. Akinrele & Co and a director of Oando.

2.2.2.2.2. Oceanic Bank International Plc (“Oceanic Bank”)Oceanic Bank International Plc (“Oceanic Bank”)Oceanic Bank International Plc (“Oceanic Bank”)Oceanic Bank International Plc (“Oceanic Bank”)Oceanic Bank International Plc (“Oceanic Bank”)Oceanic Bank is one of Nigeria’s leading financial institutions,whose financial services are employed by the company. Mr.Oboden Ibru is a director of Oceanic Bank Plc as well as a directorof Oando.

Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31Attendance at meetings during the year ended 31ststststst December December December December December20092009200920092009

DirectorDirectorDirectorDirectorDirector 02-06-0902-06-0902-06-0902-06-0902-06-09 27-07-0927-07-0927-07-0927-07-0927-07-09 09-11-0909-11-0909-11-0909-11-0909-11-09H. Mahmud5 - - !F. Atako2 ! ! -S. Anthony3 - - -N. Burney4 - - -P. Eyanuku1 ! ! !A. Ekpenyong1,5 - - !E. Fadayomi1,2 ! - -A. Gbadebo3 - - -O. P. Okoloko4 ! - !Ike Osakwe2 ! ! -J. Onwughara1 ! ! !

1 1 1 1 1 Shareholder member2 ceased being a member on July 30, 20093 appointed member on December 17, 20094 ceased being a member on December 17, 20095 appointed member on July 30, 2009

The committee held three meetings in the financial year endedDecember 31, 2009.The Companies and Allied Matters Act, 2004 requires that every publiccompany have an audit committee and stipulates that a number ofshareholders equal to the director members of this committee mustbe members of the audit committee.

Directors declarationsDirectors declarationsDirectors declarationsDirectors declarationsDirectors declarationsNone of the directors have:• ever been convicted of an offence resulting from dishonesty, fraud

or embezzlement;• ever been declared bankrupt or sequestrated in any jurisdiction;• at any time been a party to a scheme of arrangement or made any

other form of compromise with their creditors;• ever been found guilty in disciplinary proceedings by an employer

or regulatory body, due to dishonest activities;• ever been involved in any receiverships, compulsory liquidations

or creditors voluntary liquidations;• ever been barred from entry into a profession or occupation; or• ever been convicted in any jurisdiction of any criminal offence or

an offence under any Nigerian or South African legislation.

Directors’ shareholdingsDirectors’ shareholdingsDirectors’ shareholdingsDirectors’ shareholdingsDirectors’ shareholdingsThe holdings of ordinary shares by the directors of Oando as at 31December 2009 being the end of Oando’s immediately precedingfinancial year, are set out in the table below:

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3.3.3.3.3. Ocean and Oil Holdings (Nigeria) Limited (“OOH”)Ocean and Oil Holdings (Nigeria) Limited (“OOH”)Ocean and Oil Holdings (Nigeria) Limited (“OOH”)Ocean and Oil Holdings (Nigeria) Limited (“OOH”)Ocean and Oil Holdings (Nigeria) Limited (“OOH”)OOH is a diversified principal investment holding company withan indirect controlling stake in Oando held through Ocean andOil Investments Limited. Oando’s directors who are also directorsof OOH are Mr. Adewale Tinubu, Mr. Omamofe Boyo and Mr.Onajite Okoloko.

The day-to-day operational management of the Group’s activities isdelegated to the Group Chief Executive, who has direct responsibilityfor all operations and activities. He is supported in this by the DeputyGroup Chief Executive and the Group Leadership Council whichcomprises, in addition to them, the Chief Executive Officers of theoperating subsidiaries, plus the Chief Financial Officer, Chief HumanResources Officer, the Chief Compliance Officer & Company Secretary,the Chief Legal Officer, Chief Engineering and Technology Officer, ChiefEnvironment, Health, Safety, Security, Quality, State and CommunityAffairs Officer and the Chief, Corporate Services Officer.

Internal control and riskInternal control and riskInternal control and riskInternal control and riskInternal control and riskThe Directors have overall responsibility for ensuring that the Groupmaintains a sound system of internal controls to provide them withreasonable assurance that all information used within the businessand for external publication is adequate, including financial, operationaland compliance control and risk management, and for ensuring thatassets are safeguarded and therefore that shareholders’ investment isprotected. There are limitations in any system of internal control and,accordingly, even the most effective system can provide onlyreasonable, and not absolute, assurance against material misstatementor loss.In line with good practice, the Company has an Internal Audit unit thatcarries out routine and random checks on the company’s operations,including fixed assets and stocks. The unit is also responsible forinvestigating frauds and misuse or misappropriation of the company’sassets.

The company also has an Internal Control Unit, which lays down andtests the controls and processes to ensure that the assets of thecompany are safeguarded. The Unit is currently headed by a managerwith vast control and processes experience.

The key procedures that the Board has established and which aredesigned to provide effective internal control for the Group are:• The Board sets out the Group authority procedures which are

adopted by all the subsidiary companies.• The issue of a Group accounting and procedures manual which

sets out the Group’s accounting practices, revenue recognitionrules, accounting under NASB and IFRS and bid approvalprocesses.

• The application of a rigorous annual budgeting process followinga detailed entity and Group strategy review. All budgets are subjectto approval at Board level.

• The Group Leadership Council is responsible for reviewing theoperational results, communicating and application of Group-wide

Policies and procedures and strategy on operational matters whichare communicated both to the Board and down to the operatingunits.

• The formal monthly operational review by the Executive Directorstogether with the divisional management teams to assess thefinancial and operating performance and discuss the ongoingdevelopment of each business unit and the comparison of detailedmonthly management reports against budgets, forecasts and prioryears. In addition the Group Chief Executive and Chief FinancialOfficer prepare a quarterly report for the Board on keydevelopments, performance and issues in the business.

• The identification and mitigation of major business risks is theresponsibility of operating company management. Each operatingcompany maintains internal controls and procedures appropriateto its structure and business environment, whilst complying withGroup policies, standards and guidelines.

• Insurance cover is maintained to insure all the major risk areas ofthe Group based on the scale of the risk and the availability ofcover in the external market.

• The use of external professional advisers to carry out due diligencereviews of potential acquisitions.

Enterprise Risk ManagementEnterprise Risk ManagementEnterprise Risk ManagementEnterprise Risk ManagementEnterprise Risk ManagementIn recognition of the significant growth in operations and businesscomplexity, and of the need to strengthen its risk managementcapabilities to be proactive and less reactionary, Oando engaged KPMGProfessional Services to facilitate the identification and prioritisation ofthe business risks facing Oando and assist in designing an enterpriserisk management (ERM) framework for the Group. Formal RiskAssessment Workshop sessions were conducted for the businessdivisions and the Group (as part of a wider risk managementtransformation project), in order to identify the risks facing them;dimension and prioritise the risks based on criticality; assess theeffectiveness of controls in place to mitigate identified risks and developthe Group’s risk universe and risk map.

Relations with shareholdersRelations with shareholdersRelations with shareholdersRelations with shareholdersRelations with shareholders

CommunicationsCommunicationsCommunicationsCommunicationsCommunicationsThe Board considers effective communication with its investors,whether institutional, private or employee shareholders, to be ofuttermost importance.

The Company reports formally to shareholders four times a year, withthe quarterly results announcement and the preliminary announcementof the full-year results. Shareholders are issued with the full-year Reportand Accounts. These reports are posted on the website.

The Company also makes other announcements from time to time,which can be found on the website.

Members of the Group Leadership Council meet institutional investorson a regular basis, providing an opportunity to discuss, in the context

47

shareholders at the AGM, and are available, both formally during themeeting and informally afterwards, for questions. The Chairmen of theAudit and Governance and Nomination Committees are all available toanswer questions at the AGM.

Compliance statementCompliance statementCompliance statementCompliance statementCompliance statementThe Company has complied with the Code of Best Practice throughoutthe financial year ended 31 December 2009.

Shareholder Range Analysis as at December 31, 2009Shareholder Range Analysis as at December 31, 2009Shareholder Range Analysis as at December 31, 2009Shareholder Range Analysis as at December 31, 2009Shareholder Range Analysis as at December 31, 2009

SHAREHOLDER SPREAD No of Holders % of Holders UNIT % Holding CUM TOTAL1 - 1000 207,795 80.57 60,626,791 6.7 60,626,7911,001 - 5,000 40,042 15.53 78,748,476 8.7 139,375,2675,001 - 10,000 5,155 2 34,383,864 3.8 173,759,13110,001 - 50,000 4,164 1.61 76,440,458 8.45 250,199,58950,001 - 100,000 402 0.16 26,785,103 2.96 276,984,692100,001 - 500,000 252 0.1 51,107,848 5.65 328,092,540500,001 - 1,000,000 43 0.02 31,539,381 3.48 359,631,9211,000,001 - 5,000,000 41 0.02 89,343,469 9.87 448,975,3905,000,001 - 10,000,000 9 0 65,443,916 7.23 514,419,30610,000,001 - 50,000,000 10 0 167,395,601 18.5 681,814,907100,000,001 - 905,084,628 1 0 223,269,721 24.67 905,084,628 257,914 100 905,084,628 100

DISTRIBUTION OF SHAREHOLDERS No of Holders % of Holders UNIT % Holding CUM TOTALBanks/Insurance 229 0.09 20,417,043 2.26 20,417,043Brokers 362 0.14 11,972,045 1.32 32,389,088Endowment Funds 230 0.09 1,935,355 0.21 34,324,443Individuals 252485 97.90 270,847,094 29.93 305,171,537Investment Companies 636 0.25 54,376,048 6.01 359,547,585Medical Aid Schemes 8 0.00 17,375 0.00 359,564,960Mutual Funds 77 0.03 30,505,674 3.37 390,070,634Nominees/Trust Companies 1556 0.60 129,451,660 14.30 519,522,294Other Corporations 458 0.18 18,954,758 2.09 538,477,052Pension Funds 170 0.07 70,240,299 7.76 608,717,351Private Companies 1689 0.65 295,976,844 32.70 904,694,195Public Companies 14 0.01 390,433 0.04 905,084,628Total 257,914 100 905,084,628 100.00 905,084,628

of publicly available information, the progress of the business.Institutional investors and analysts are also invited to attend briefingsby the Company following the announcements of the full-year andquarterly results. Copies of the presentations given at these briefingsare posted on the website.

Constructive use of the Annual General MeetingConstructive use of the Annual General MeetingConstructive use of the Annual General MeetingConstructive use of the Annual General MeetingConstructive use of the Annual General MeetingThe notice of meeting is sent to shareholders at least 21 working daysbefore the AGM. The Directors encourage the participation of

2009 Corporate Social Responsibility Report (CSR)2009 Corporate Social Responsibility Report (CSR)2009 Corporate Social Responsibility Report (CSR)2009 Corporate Social Responsibility Report (CSR)2009 Corporate Social Responsibility Report (CSR)

In 2009, the Oando Group’s corporate social investment commitmentssoared; we continually supported the implementation of projects mostrelevant to our stakeholders and communities in our areas of operation.

EducationEducationEducationEducationEducationThe Group is actively involved in contributing to the achievement ofthe Millennium Development Goals (MDGs) targeted at access touniversal primary education by 2015. The Group’s education projectsare therefore geared towards empowering host communities through

basic education.

The Oando Education projects include:

Adopt-A-School ProgrammeAdopt-A-School ProgrammeAdopt-A-School ProgrammeAdopt-A-School ProgrammeAdopt-A-School ProgrammeIn a bid to further Oando’s commitment of improving access to basiceducation in our host communities, the Adopt–A–School programmewas formally initiated in April, 2007 in partnership with the Ministry ofEducation.

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The project aims at supporting the development of selected schoolsover a three year period, by renovating facilities; integration of teacherand student learning, provision of learning aids and supporting libraries.By December 2009, Twenty-five government-owned primary schools(below) were adopted in our host communities. The schools located inAkwa Ibom, Bauchi, Cross River, Delta, Katsina, Lagos, Ogun, andRivers State are either along the right of way of our pipelines or in thesurrounding depots or service stations.

Seven of these schools have been renovated, some of which werealso provided with water and sanitation facilities. Oando sponsoredsome key school events, such as the sports days, prize-giving daysand end of year parties.

The Group’s intention is to support 100 primary schools across WestAfrica by 2015.The twenty five adopted schools are:1. Community Primary School, Lagos2. Metropolitan Primary School, Lagos3. Gidado Primary School, Katsina4. Daura primary School, Katsina5. Central Primary School, Udubo, Bauchi6. Ekara Primary School, Onne, Rivers7. Otuole Primary School, Ebendo, Kwale, Delta8. Ogbogwe Primary School, Obodougwa, Kwale, Delta9. Torubobou Primary School, Obotoboi 1, Ogulagha, Burutu, Delta10. Government Primary School, Ekorinim, Cross River11. St. Patrick’s Primary School, Odukpani, Cross River12. QIC Primary School, Calabar, Cross River13. Nomadic Primary School, Nasarawa, Cross Rivers14. Government Primary School, Asabanka, Cross River15. Government Primary School, Mfamosing, Akamkpa, Cross River16. Government Primary School, Etim Ekpo, Akwa Ibom17. Government Primary School, Ukanafun, Akwa Ibom18. Government Primary School, Ikot Okoro, Akwa Ibom19. Government Primary School, Itung, Abak, Akwa Ibom20. SWED Town Primary School, Oruk Anam, Akwa Ibom21. St Patrick’s Primary School, Etinan, Akwa Ibom22. Oboetim (QIC) Town School, Ikot Ekong, Nsit Ibom, Akwa Ibom23. St Gabriel’s (RCM) Primary School, Nung Oku, Uruan, Akwa Ibom24. Lutheran Primary School, Ibesikpo – Asutan, Akwa Ibom25. ZI (I) Primary School, Akute, Ogun State

ScholarshipsScholarshipsScholarshipsScholarshipsScholarshipsOando has been actively involved in various annual scholarship awardswith a view to promoting education for youths in Nigeria. The grantsare designed to support the financial burden of less privileged childrenwho have either dropped out of school or who have never had theopportunity of formal basic education. Scholarships in 2009 included:• Scholarships for 12 secondary/primary school children in the

Bundu and Onne communities in Rivers state.

• Sponsorship of 100 out-of-school children from communitieswhere Gaslink operates in Lagos.

• Sponsorship of 40 members of the Xplicit Dance Group, anentertainment enterprise made up of mostly orphans. 20 membersare undergraduates at Lead City University, Ibadan, 17 insecondary school and 4 are primary school students.

Economic Empowerment/EmploymentEconomic Empowerment/EmploymentEconomic Empowerment/EmploymentEconomic Empowerment/EmploymentEconomic Empowerment/EmploymentOando’s host communities are each unique with varied multi-tieredsocio-economic intricacies. What goes across board however, is theneed to empower individuals within the communities to be financiallystable and gainfully employed. To this end, Oando has made it a partof the staffing policy to recruit skilled, semi skilled and unskilled labourfrom host communities to fill suitable positions.The group alsoencourages our joint venture partners and contractors to fill suitablepositions from host communities as a form of empowerment.

Social DevelopmentSocial DevelopmentSocial DevelopmentSocial DevelopmentSocial DevelopmentOando is actively involved in the provision of social amenities andimproving the quality of life in our host communities. We are adaptableto the diversity of each community’s needs and are actively involved inthe provision of basic social infrastructure which we see as basicnecessity of modern life, not luxury, thereby improving the quality oflife in our host communities.We believe in driving development using a ‘bottom-up’ approach,projects implemented are selected through consultations with thecommunity identifying and prioritizing community needs as against thepractice of instituting projects based on the perceived needs ofcommunities. To this end Oando has embarked on a number of projectsbased on the social needs of the communities:• Construction of a Community Town Hall in Ama, Rivers State.• Provision of desks for Primary and Kindergarten Schools in

Ogulagha Kingdom, Delta State• Construction of a Computer Hall and provision of computers and

accessories for Odimodi Federated Communities, Delta State

SponsorshipsSponsorshipsSponsorshipsSponsorshipsSponsorshipsIn addition to sponsoring various youth, football, polo, tennis, golfcompetitions and tournaments, Oando has also been actively involvedwith the sponsorship of Mohammed Muazu (an amateur golfer).

Mohamed MuazuMohamed MuazuMohamed MuazuMohamed MuazuMohamed MuazuMohammed Muazu was discovered at Ikoyi Club in 2005, where hewas nursing the dream of becoming a professional golfer on the worldcircuit. Oando has sponsored his general welfare and participation innumerous journeys on the amateur circuit in Africa. He has since beena force to be reckoned with in amateur golfing, through his numerousvictories.In 2009, we concluded plans to further Mohammed’s education byawarding him full scholarship for an 18 Month Associate Degree inGolf Management at the Golf Academy of America.

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DonationsDonationsDonationsDonationsDonationsOando has been involved in donating to various laudable causes and charities across Nigeria, as listed below:

S/NS/NS/NS/NS/N DescriptionDescriptionDescriptionDescriptionDescription AmountAmountAmountAmountAmount1 Back to School Scholarships, 100 children in Lagos (2008/9 session) 6,972,8602 Donations to Communities in Lagos State 1,647,0003 Nassarawa Children’s Home, Kano State 50,0004 Katsina Motherless Babies Home, Katsina State 50,0005 Holy Family Sisters of the Needy 50,0006 Red Cross Motherless Babies Home 50,0007 Motherless Babies Home Uwase, Calabar 50,0008 Ndipmo Uwem Orphanage, Secretariat Road, Uyo 50,0009 Edo Orphanage Home ,Benin City 50,00010 Orosanye Orphanage Home, Benin City 50,00011 Darul Hadith Orphanage Home, Ran Road, Bauchi 50,00012 Rafiki Orphanage Home, Miango Rd, Jos 50,00013 Heritage Homes Orphanage 325,00014 Heart of Gold Hospices 50,00015 Motherless Babies Home, Nigerian Red Cross, Makoko, Yaba 50,00016 Old People’s Home, Birrel Avenue, Near LAISEC 50,00017 Lagos State Rehabilitation Centre, Owutu, Ikorodu 50,00018 New Psychiatrist Hospital, Yaba 50,00019 Adonai Motherless Babies Home 50,00020 Jamiyar Mata Home 50,00021 Mama Abayol Children Orphanage Home, Makurdi 50,00022 Home of Hope Orphanage Home, Gboko Road 50,00023 Mercy Vincent Foundation 50,00024 Borno State Motherless Babies Home 50,00025 Kwara State School For the Handicapped 50,00026 Motherless Babies Home Gakambi, Ilorin 50,00027 Handef Foundation, Ondo State 50,00028 Compassion Centre for Physically Handicapped Children, Trans Amadi, Portharcourt 50,00029 Health For The Sick, Borokiri Remand Home, Portharcourt 50,00030 Social Welfare Orphanage Home, Lodge Road, Sokoto 50,00031 Social Welfare Orphanage Home, Kalambaina, Sokoto State 50,00032 St. Ann Orphanage Home, Effurun, Warri 50,00033 Buwa Davies Memorial Orphanage 50,00034 Day Care and Orphanage Center Karewa GRA Yola (C/o Ministry of Women and Social Development Yola, Adamawa State) 50,00035 Gombe children’s Home (C/o Gombe State Ministry of Women and Social Development Gombe) 50,00036 Stella Obasanjo Children Home, Ibara Housing Estate, Abeokuta 50,00037 Daniel Akintonde Model School (For the Handicapped), Adigbe, Abeokuta 50,00038 Mother Theresa Orphanage Home, Gwarinpa, Abuja 50,00039 Foundation for Promotion of Good Health, Tunde Idiagbon Way, Jabi District, Abuja 50,00040 Red Cross Motherless Babies Home, Main Market Road, Enugu 50,00041 Mother of Christ Motherless Babies Home, Ogbete Market Road 50,00042 School of the Handicap, Onireke, Ibadan 50,00043 Motherless Babies Home, Yemetu, Ibadan 50,00044 Scholarship for 12 Students for Onne & Bundu 1,920,00045 Ama Community Town Hall Building Project 1,000,00046 Phase 1 Renovation Works, Adopt a School Programme for Model Pry Sch, Ekara, Onne 4,791,25547 End of Year Gifts for 11 Communities in South East 1,716,00048 Trade Union Congress 2,500,000

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S/NS/NS/NS/NS/N DescriptionDescriptionDescriptionDescriptionDescription AmountAmountAmountAmountAmount49 Christmas Donations to all the Asset Communities in Rivers State 1,111,20050 Construction of Desks for Primary and Kindergarten Schools in Ogulagha Kingdom, Delta State 5,000,00051 Construction of a Computer Hall for Odimodi Federated Communities, Delta State 3,000,00052 Peace Award Donation to Ogulagha Kingdom for their Peaceful Disposition till the End of OML 90 Drilling Campaign 1,000,00053 Peace Award Donation to Odimodi Federated Communities for their Peaceful Disposition till the End of OML 90

Drilling Campaign. 500,00054 1,000 Books Donation to Kings College for 100th Anniversary 1,500,00055 Donation of AGO and PMS bi-monthly to Police Marine Base 9,796,50056 Mohammed Muazu, Amateur Golfer 1,105,45057 Phase 1 Installation of Sanitation and Water Systems, Adopt a School Programme for Central Pry Sch, Udubo, Bauchi 3,422,59558 Phase 1 Renovation Works, Adopt a School Programme for Gidado Pry Sch, Katsina 4,798,67359 Six Adopted Schools End of Year Parties 750,00060 First Aid Kits and Sports Event for Metropolitan Primary School, Orile, Lagos 204,47061 Scholarships for 30 Student Members of Xplicit Dance Group (Orphans) 3,075,00062 Maintenance of Kayode Road, Apapa, Lagos 149,547,07163 Little Saints Orphanage, Lagos 275,700

Total 207,958,774

Developments & Initiatives for Oando Human Capital ManagementDevelopments & Initiatives for Oando Human Capital ManagementDevelopments & Initiatives for Oando Human Capital ManagementDevelopments & Initiatives for Oando Human Capital ManagementDevelopments & Initiatives for Oando Human Capital ManagementDepartmentDepartmentDepartmentDepartmentDepartmentIn 2009, the HCM Department focused mainly on broadening,consolidating and institutionalising existing initiatives and processes.

The Oando Corporate UniversityThe Oando Corporate UniversityThe Oando Corporate UniversityThe Oando Corporate UniversityThe Oando Corporate UniversityThe framework for the deployment of the company’s corporate learningestablishment (named “Oando Corporate University”) was developedand has received approval for implementation.

The Oando Corporate University will be an educational entity within theGroup that will champion activities that foster individual andorganizational learning and development, which are critical aspects ofOando’s corporate goals and objectives.

The entity will be an integrated training, learning, and performancesupport organisation that will employ a variety of instructor-led, informaland technology-enabled strategies designed to help employees,customers, and partners acquire and demonstrate knowledge and skillsrequired for successful individual, team, and enterprise performance.The Oando Corporate University principle seeks to have Learning andDevelopment solutions and interventions strictly tailored to our businessand deployed utilising world class and purpose-developed curricula.

One major objective of the institution will be to link workforce learningto organizational strategy whilst developing job skills and core workplaceskills. This will also help us achieve a shift in focus from employee‘training’ to employee ‘learning and development’, in line with evolvingbusiness needs. Softer issues like the entrenchment of our core valuesand culture will also be critical in the execution of the Oando CorporateUniversity mandate. At its height, eighty to ninety percent (80%-90%)of all training and development activities will be deployed in-houseleading to considerable cost savings especially associated costs liketravel, logistics and board.

In the last quarter of 2009, the company engaged the services of aconsultancy outfit to articulate and refine the strategy, define the buildingblocks, design and deploy the relevant curricula of the CorporateUniversity in line with defined business objectives. Whilst fullimplementation of the institution will take a few years to achieve, theestablishment is expected to be operational by the third quarter of 2010with key focus areas being addressed by tailor-made learning anddevelopment solutions.

Talent Management and People DevelopmentTalent Management and People DevelopmentTalent Management and People DevelopmentTalent Management and People DevelopmentTalent Management and People DevelopmentIn 2009, we introduced an enriched New Employee Inductionprogramme which embeds specific soft-skills training classes withinteractive “Questions and Answers” sessions with the heads of thevarious entities across the Group. Newly promoted managers acrossthe Group were also taken through an intensive training programme toequip them with relevant skills to succeed on the job and make thetransition from supervisory roles into management as seamless aspossible. The new Managers’ training will become a regular featureand plans are underway to institute an advanced management trainingcourse for Mid-Level managers in 2010 and beyond.

Furthermore, the company took a major step forward in 2009 towardsimproving leadership skills as a 360-degree Leadership Assessmentexercise was introduced and integrated into the employee performancemanagement system.

Our ability to measure leadership maturity across the Group affordsus the advantage of being proactive in the development of current andfuture leaders. The primary goal of this program is to improve the qualityof leadership available across the Group by identifying skill gaps anddeploying specific solutions to address these gaps. By surveying up,down, and across (360 degrees by Supervisors, Peers and

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Subordinates), we provide Managers with information unobtainablefrom conventional assessment instruments

The Company continues to invest heavily in the development of heremployees. In the year 2009, in response to the global financialenvironment, a lot of creativity and innovation had to be employed inthe administration of resources available for Learning and development.With a definite focus on in-house and in-plant training programmestailored specifically to the business needs of the Group, execution ofthe training plan for 2009 was achieved within budget.

The Oando Mentoring ProgrammeThe Oando Mentoring ProgrammeThe Oando Mentoring ProgrammeThe Oando Mentoring ProgrammeThe Oando Mentoring ProgrammeThe process to revamp the Oando Mentoring programme commencedin 2009 with a view to offering a formal and structured setting in whichbeneficial one-to-one relationships between employees and selectedmentors are developed. Acting as friends, teachers and guides, mentorsare required to encourage and advise their mentees by sharing theirown experiences, information and knowledge that can help menteesmeet their professional and personal development goals.

The mentoring programme also seeks to help employees imbibe theOando core values as defined under TRIPP, create a sense of belongingand foster loyalty to the brand and ultimately improve retention ofemployees across the Group.

An executive sponsor has been appointed from within the GroupLeadership Council and is saddled with the responsibility of ensuringthe success of the Oando mentoring programme.

Remuneration, Benefits and Employee WelfareRemuneration, Benefits and Employee WelfareRemuneration, Benefits and Employee WelfareRemuneration, Benefits and Employee WelfareRemuneration, Benefits and Employee WelfareDuring the course of the year, a “Reward Framework” document wasdesigned and published for the organization. The document providesemployees with comprehensive details on Oando’s reward philosophiesand principles in addition to guidelines on the company’s rewardpractices. The guidelines are designed to reaffirm the company’s visionof “being the premier company driven by excellence”. This frameworkcovers all aspects of reward with emphasis on Oando’s pay forperformance culture that ensures that there is internal equity withinthe organization, and guarantee that reward at Oando is competitivewith the relevant sectors in which we operate. The company alsocontinues to participate in a number of salary surveys to determinemarket competitiveness.

In a bid to ensure that pay within each of the company’s businessentities remains competitive within the industry where the businessexists, six (6) new salary structures were created to reflect the differencein pay in each business entity. The salary bands within the structureswere widened to accommodate more jobs and to reflect pay differentialsdue to individual performances/merit.

Furthermore, In spite of the economic and global financial challengesof 2009, the company maintained her reputation as an employer of

choice as salary reviews were implemented with employees receivinga pay rise to help cushion the effects of inflation in the economy.Negotiations with the in-house trade union were also completedamicably with an agreement reached for the 2009/2010 year.

Finally, based on both individual and business performances, eligibleemployees received incentives in the form of both cash and sharesunder the Oando Management Performance Plan (OMPP), OandoProfit Sharing Plan (OPSP) and the GCE’s discretionary bonus. StockOptions were also granted under the Oando Employee Equity Incentivescheme (OEEIS).

Recruitment, Selection and Attrition ManagementRecruitment, Selection and Attrition ManagementRecruitment, Selection and Attrition ManagementRecruitment, Selection and Attrition ManagementRecruitment, Selection and Attrition ManagementIn 2009, the company partnered with SHL-UK, a world class HumanResources Management Solutions Company, to deploy CompetencyBased Selection (CBS) techniques and the SHL Ability andOccupational testing platform in the recruitment and selection processacross the Group.

Competency based (or behavioural) interviews are based on the premisethat past behaviour is the best predictor of future behaviour. Interviewersseek to obtain information about candidates’ past behaviour in certainsituations. Competency based interviews are structured, with questionsthat relate directly to the essential criteria/ competencies required forthe position.Research into recruitment and selection methodology suggests thatstructured, competency based interviews can be one of the mostreliable, objective and accurate forms of assessment for experiencedhire interviews.

In furtherance of our objective of institutionalising this very effectivetechnique, all managers across the Group were trained on CompetencyBased Interviewing techniques with practical sessions that helpedreinforce learning.

The SHL Ability and Occupational testing platform affords us a worldclass platform to effectively assess the suitability of fresh(inexperienced) graduates for defined entry level roles within theorganisation.

In 2009, a total of ninety seven (97) full term employees were employedinto the organisation. Of this number, twenty one (21) joined in theManagement Staff Cadre and seventy six (76) in the Non-ManagementStaff cadre.

With an overall normal attrition rate of 6% in 2009, the companycontinues to attract and retain required talent to effectively man itsoperations to achieve set objectives.

Graduate Trainee ProgrammeGraduate Trainee ProgrammeGraduate Trainee ProgrammeGraduate Trainee ProgrammeGraduate Trainee ProgrammeThe first ever Oando Graduate Trainee Programme, initiated in 2008,produced its first set of successful trainees to be integrated fully into

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Environmental Health Safety Security and QualityEnvironmental Health Safety Security and QualityEnvironmental Health Safety Security and QualityEnvironmental Health Safety Security and QualityEnvironmental Health Safety Security and QualityThis report highlights Environmental Health Safety Security and Quality(EHSSQ) activities for 2009; it gives an overview of key EnvironmentHealth Safety and Quality achievements in line with the companystrategic vision for 2009.

Oando through its Quality Management System (QMS) consistentlydelivered superior quality products and services throughout the yearunder review that enabled the company not only retain its old customers,but also attract new ones. In May, 2009 Oando Gas & Power wasawarded the ISO 9001:2000 Certificate for demonstrating a strong QMSand adhering to the requirements of the standard. The ManagementSystem has precipitated new initiatives leading to re-engineering ofour processes for optimum productivity and better service delivery.Oando staff have continually been put abreast of new environment,health, security and safety developments within the Oil and Gas Industrythrough various trainings to enhance their EHSS capability.

The EHSSQ department supported key projects such as the Well re-entry at Akepo (OML 90), the Liquefied Petroleum Gas (LPG) FEEDproject and successful deployment of OES Integrity Rig to Agip locationTebidaba 1 with no down time to security issues, despite the heightenedinsecurity in the Niger Delta. The department also standardized itsPermit to Work (PTW) Management System across the entities andconducted risk assessments for its facilities particularly in the upstreambusiness and OG&P gas pipeline network. We experienced an increasein the reporting of hazard identification reports (HIRs) amongst staffleading to containing near misses that would have resulted intoaccidents. Unfortunately, we had two fatalities as a result of an accidentrecorded in one of our retail outlets. An enquiry on the accident wassuccessfully conducted by DPR and action items closed out.

Amongst all, most of our key achievements are listed below:

· Successful EHSSQ Week· Conducted EHS cases for most of our facilities KLP 2, Aviation

Ikeja and Abuja.· Retention of the ISO 9001:2000 Certification for Oando Marketing· Completed ISO 9001: 2008 gap analysis for OEPL and OST· Completed the Integrity Assessment of Gaslink Polyethylene

Piping network complete with risk analysis.· EHS –MS Audits, Management facility Inspections and follow up

audits· Deployment of the HIV/AIDs, Smoking, Environmental

Assessment, Ionizing Radiation, Waste Management and Permitto Work policies.

· Trained staff/contractors: Trainings such as Stress Management,BOSEIT, First Aid, Survival Swimming, Advanced Fire Fightingfor Fire Marshals, ISO 14001 Environmental ManagementSystem, OHSAS 18001, EHS Level 1, 2 & 3 trainings wereconducted.

· Carried out Environmental Evaluation Reports (EERs) for mostof our service stations

the company as full term employees by the various entities acrossthe Group to fill established vacancies. This marks a successful firstattempt at achieving our objective of growing talent and creating apipeline of technically and morally competent individuals, who wouldbe the champions of the culture and core values of the organisationand cater for emerging human resource requirements of the companynow, and in the future.A first batch of eleven (11) trainees, out of the sixteen (16) remainingon the scheme at the final assessment stage were found to havedemonstrated technical competence and potential were confirmed asfull term employees.

Leadership Development and Succession PlanningLeadership Development and Succession PlanningLeadership Development and Succession PlanningLeadership Development and Succession PlanningLeadership Development and Succession PlanningThe succession planning process and accelerated development pool(High potential employees) identification process was furtherstrengthened with the compilation of succession plans and “Hi-Pot”employee nominations from the different entities and Group/ SharedServices functions.

This process has now been institutionalised and made a bi-annualexercise done after the completion of the two annual performanceappraisal cycles.

Oando People Council (OPEC)Oando People Council (OPEC)Oando People Council (OPEC)Oando People Council (OPEC)Oando People Council (OPEC)In late 2008, executive management decided that there was a need fora renewed and sustained focus on Human Capital Management issuesin the organization. This led to the formation of OPEC, a bodycomprising all the entity heads, the Human Capital and CorporateServices chiefs and headed by the Deputy Group Chief Executive.The body has the remit to approve all major Human Capital initiativeswith particular focus on Talent Management and Compensation andBenefits.

The body meets monthly and 2009 was a year of institutionalising thisinitiative. The impact of the body continues to be felt in the organizationand will be strengthened in the years to come.

Oando Staff Equity Participation SchemeOando Staff Equity Participation SchemeOando Staff Equity Participation SchemeOando Staff Equity Participation SchemeOando Staff Equity Participation SchemeThe year ended 31st December 2009 was year 2 of Cycle 2 of theOando Employee Equity Participation Scheme which spans January2008 to December 2010.Vesting of shares under the 2nd Cycle will bedone in January 2010. Eligible Employees will be entitled to take uptheir share options under the Scheme, after the shares are vested. Todate, a total of 200,000 were listed under the 1st Scheme Cycle.

ConclusionConclusionConclusionConclusionConclusionIn 2009, the gains of most of the initiatives of the last two years wereconsolidated upon and the initiatives became institutionalised. Benefitsof these initiatives have also become clearly visible to the organisationand aided more focused Career Development and Learning andDevelopment interventions.

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· Built up a good relationship with our regulatory bodies· Participated in national and international organized environmental

programme.

The figure below illustrates the Oando PLC EHS Performance for 2009

OANDO PLC EHS ’09 PERFORMANCE REVIEWOANDO PLC EHS ’09 PERFORMANCE REVIEWOANDO PLC EHS ’09 PERFORMANCE REVIEWOANDO PLC EHS ’09 PERFORMANCE REVIEWOANDO PLC EHS ’09 PERFORMANCE REVIEW

Acquisition of Own SharesAcquisition of Own SharesAcquisition of Own SharesAcquisition of Own SharesAcquisition of Own Shares

The Company did not acquire its own shares in year 2009.

AwardsAwardsAwardsAwardsAwards

Gaslink Nigeria Limited (a subsidiary of Oando PLC) won the best gasdistribution company in Nigeria award at the Financial StandardNewspaper Award.

Oando Marketing was honoured for Marketing Innovation, OutstandingBrand and Downstream Development Partner by Oil Trading andLogistic Africa (OTL Africa).

In 2010, Oando won the “Company of the year” award at the NigeriaOil & Gas (NOG) Conference organized by CWC Group.

Net Book Value of Fixed AssetsNet Book Value of Fixed AssetsNet Book Value of Fixed AssetsNet Book Value of Fixed AssetsNet Book Value of Fixed AssetsInformation regarding the Group’s asset value and notes thereon arecontained in Note 4 of the financial statements on page 68 of this Report.In the opinion of the Directors, the market value of the Company’sproperties is not lower than the value shown in the financial statements.

Substantial interest in sharesSubstantial interest in sharesSubstantial interest in sharesSubstantial interest in sharesSubstantial interest in sharesOcean & Oil Investments Limited is the highest single shareholder inthe Company, holding 223,269,721 units representing 24.67% of theissued shares. No other shareholder holds 5% and above of the issuedshare capital of the Company.

AuditorsAuditorsAuditorsAuditorsAuditorsPricewaterhouseCoopers, have indicated their willingness to continuein office as the Company’s auditors in accordance with Section 357(2)of the Companies and Allied Matters Act, 2004

By Order of the BoardBy Order of the BoardBy Order of the BoardBy Order of the BoardBy Order of the Board

Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Oredeji K. Delano (Mrs.)Company Secretary

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In compliance with section 359 (6) of the Companies andAllied Matters Act 2004, we the members of Oando Plc AuditCommittee have, on the documents and information madeavailable to us:

a. Reviewed the scope and planning of the auditrequirements

b. Reviewed the external Auditors’ Management ControlsReport for the year ended December 31, 2009 as wellas the Management response thereto,

And can ascertain that accounting and reporting policies ofthe company for the year ended December 31, 2009 are inaccordance with legal requirements and agreed ethicalpractices.

Dated this 18th day of March 2010

________________________Alhaji H. MahmudAlhaji H. MahmudAlhaji H. MahmudAlhaji H. MahmudAlhaji H. MahmudChairman, Audit CommitteeChairman, Audit CommitteeChairman, Audit CommitteeChairman, Audit CommitteeChairman, Audit Committee

Report of the Audit CommitteeReport of the Audit CommitteeReport of the Audit CommitteeReport of the Audit CommitteeReport of the Audit Committee

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Report of the Auditors 56

Statements of Directors Responsibilities 57

Balance Sheets 58

Profit and Loss Accounts 59

Statement of Cash Flows 60

Summary of Significant Accounting Policies 31 December 2009 61

Notes of the Financial Statement 66

Value Added Statement 86

Five Year Financial Summary 87

Statement of Unclaimed/Return Dividend Warrants/Share Capital History 89

Proxy Form 91

Admission Card 93

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REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF OANDO PLCREPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF OANDO PLCREPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF OANDO PLCREPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF OANDO PLCREPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF OANDO PLC

Report on the f inancial statementsReport on the f inancial statementsReport on the f inancial statementsReport on the f inancial statementsReport on the f inancial statements

We have audited the accompanying separate and consolidated financial statements of Oando Plc (the Company) and its subsidiaries (together “theGroup”) which comprise the balance sheets as of 31 December 2009 and the profit and loss accounts and statements of cash flows for the year thenended and a summary of significant accounting policies and other explanatory notes.

Directors’ responsibility for the financial statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with Nigerian Statements of AccountingStandards and with the requirements of the Companies and Allied Matters Act. This responsibility includes: designing, implementing and maintaininginternal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud orerror; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an independent opinion on the financial statements based on our audit. We conducted our audit in accordance withInternational Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonableassurance that the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selecteddepend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of thecompany’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion the accompanying financial statements give a true and fair view of the state of the financial affairs of the Group and of the Company at 31December 2009 and of the profit and cash flows of the Group and of the Company for the year then ended in accordance with Nigerian Statements ofAccounting Standards and the Companies and Allied Matters Act.

Report on other legal requirementsReport on other legal requirementsReport on other legal requirementsReport on other legal requirementsReport on other legal requirements

The Companies and Allied Matters Act requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii) in our opinion proper books of account have been kept by the Company, so far as appears from our examination of those books;

iii) the Company’s balance sheet and profit and loss account are in agreement with the books of account.

Chartered AccountantsLagos, Nigeria

PricewaterhouseCoopersChartered Accountants252E Muri Okunola StreetVictoria IslandP.O.Box 2419Lagos, Nigeria

12 April 2010

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i.i.i.i.i. Responsibilities in Respect of the Financial StatementsResponsibilities in Respect of the Financial StatementsResponsibilities in Respect of the Financial StatementsResponsibilities in Respect of the Financial StatementsResponsibilities in Respect of the Financial StatementsThe Companies and Allied Matters Act requires the directors toprepare financial statements for each financial year that give atrue and fair view of the state of financial affairs of the Companyat the end of the year and of its profit or loss. The responsibilitiesinclude ensuring that the Company:

(a) keeps proper accounting records that disclose, with reasonableaccuracy, the financial position of the Company and comply withthe requirements of the Companies and Allied Matters Act;

(b) establishes adequate internal controls to safeguard its assets andto prevent and detect fraud and other irregularities; and

(c) prepares its financial statements using suitable accountingpolicies supported by reasonable and prudent judgments andestimates, and are consistently applied.The directors accept responsibility for the annual financialstatements, which have been prepared using appropriateaccounting policies supported by reasonable and prudentjudgments and estimates, in conformity with Nigerian AccountingStandards and the requirements of the Companies and AlliedMatters Act.

The directors are of the opinion that the financial statements givea true and fair view of the state of the financial affairs of theCompany and of its profit or loss. The directors further acceptresponsibility for the maintenance of accounting records that maybe relied upon in the preparation of financial statements, as wellas adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate thatthe Company will not remain a going concern for at least twelvemonths from the date of this statement.

ii.ii.ii.ii.ii. Responsibilities in Respect of Corporate GovernanceResponsibilities in Respect of Corporate GovernanceResponsibilities in Respect of Corporate GovernanceResponsibilities in Respect of Corporate GovernanceResponsibilities in Respect of Corporate Governance

IntroductionIntroductionIntroductionIntroductionIntroductionOando Plc is committed to the principles and implementation ofgood corporate governance. The Company recognises thevaluable contribution that it makes to long-term business prosperityand to ensuring accountability to its shareholders. The Companyis managed in a way that maximises long term shareholder valueand takes into account the interests of all its stakeholders. OandoPlc believes that full disclosure and transparency in its operationsare in the interests of good governance. As indicated in thestatement of responsibilities of directors and notes to the financialstatements the business adopts standard accounting practicesand ensures sound internal controls to facilitate the reliability ofthe financial statements.

STATEMENT OF DIRECTORS’ RESPONSIBILITIESSTATEMENT OF DIRECTORS’ RESPONSIBILITIESSTATEMENT OF DIRECTORS’ RESPONSIBILITIESSTATEMENT OF DIRECTORS’ RESPONSIBILITIESSTATEMENT OF DIRECTORS’ RESPONSIBILITIESThe Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board is responsible for setting the Company’s strategicdirection, for leading and controlling the Company and formonitoring activities of the executive management. The Boardpresents a balanced and understandable assessment of theCompany’s progress and prospects. The Board consists of theChairman, nine non-executive directors and four executivedirectors. The non-executive directors are independent ofmanagement and free from any constraints, which could materiallyinterfere with the exercise of their independent judgment. Theyhave experience and knowledge of the industry, markets, financialand/or other business information to make a valuable contributionto the Company’s progress. The Chief Executive Officer is aseparate individual from the Chairman and he implements themanagement strategies and policies adopted by the Board. Theymeet at least four times a year.

The Audit CommitteeThe Audit CommitteeThe Audit CommitteeThe Audit CommitteeThe Audit CommitteeThe Audit Committee is made up of six members - three directors(all of whom are non-executive) and three shareholders. TheCommittee members meet at least thrice a year.

Its duties include keeping under review the scope and results ofthe external audit, as well as the independence and objectivity ofthe auditors. The Audit Committee also keeps under review internalfinancial controls, compliance with laws and regulations and thesafeguarding of assets. It also reviews the adequacy of the planof the internal audit and reviews its audit reports.

Systems of Internal ControlSystems of Internal ControlSystems of Internal ControlSystems of Internal ControlSystems of Internal ControlOando Plc has well-established internal control systems foridentifying, managing and monitoring risks. These are designedto provide reasonable assurance that the risks facing the businessare being controlled. The corporate internal audit function of theCompany plays a key role in providing an objective view andcontinuing assessment of the effectiveness of the internal controlsystems in the business. The systems of internal controls areimplemented and monitored by appropriately trained personneland their duties and reporting lines are clearly defined.

Code of Business EthicsCode of Business EthicsCode of Business EthicsCode of Business EthicsCode of Business EthicsManagement has communicated the principles in the Company’sCode of Conduct to its employees in the discharge of their duties.This code sets the professionalism and integrity required forbusiness operations which covers compliance with the law,conflicts of interest, environmental issues, reliability of financialreporting, bribery and strict adherence to the principles so as toeliminate the potential for illegal practices.

____________________ _____________________DirectorDirectorDirectorDirectorDirector DirectorDirectorDirectorDirectorDirector

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Balance Sheet as of 31 December 2009Balance Sheet as of 31 December 2009Balance Sheet as of 31 December 2009Balance Sheet as of 31 December 2009Balance Sheet as of 31 December 2009

December 2009December 2009December 2009December 2009December 2009 December 2008December 2008December 2008December 2008December 2008NOTENOTENOTENOTENOTE GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany

Non-current assetsNon-current assetsNon-current assetsNon-current assetsNon-current assets 4 131,713,072 8,910,979 89,903,189 1,539,035Intangible assets 5 23,969,748 448,000 22,350,513 597,334Long term Investments 6 1,000 39,471,680 2,000 32,131,055Deferred tax asset 13 1,943,849 198,917 1,044,162 -Long term receivable 7 18,783,390 7,380 14,544,777 44,368

Current assetsCurrent assetsCurrent assetsCurrent assetsCurrent assetsInventories 8 9,693,311 41,476 16,068,840 33,942Debtors and prepayments 9 96,743,166 342,880,157 93,702,949 121,366,073Deferred tax asset 13 6,922,655 - 1,179,580 -Bank and cash balances 25,760,410 13,459,918 48,981,689 26,776,003

139,119,542139,119,542139,119,542139,119,542139,119,542 356,381,551356,381,551356,381,551356,381,551356,381,551 159,933,058 159,933,058 159,933,058 159,933,058 159,933,058 148,176,018 148,176,018 148,176,018 148,176,018 148,176,018

Current liabilitiesCurrent liabilitiesCurrent liabilitiesCurrent liabilitiesCurrent liabilitiesCreditors and accruals 10 81,511,059 288,803,654 45,242,536 74,011,951Dividend payable 50,123 50,123 1,249 1,249Deferred tax liability 13 923,737 217,691 437,329 -Current income tax liabilities 26 3,313,947 586,360 3,355,327 613,514Borrowings 11 140,473,551 80,263,640 142,347,242 48,349,488

226,272,417226,272,417226,272,417226,272,417226,272,417 369,921,468369,921,468369,921,468369,921,468369,921,468 191,383,683 191,383,683 191,383,683 191,383,683 191,383,683 122,976,202 122,976,202 122,976,202 122,976,202 122,976,202Net current (liabilities)/assetsNet current (liabilities)/assetsNet current (liabilities)/assetsNet current (liabilities)/assetsNet current (liabilities)/assets (87,152,875) (13,539,917) (31,450,625) 25,199,816

Non-current liabilitiesNon-current liabilitiesNon-current liabilitiesNon-current liabilitiesNon-current liabilitiesBorrowings 11 21,247,128 - 41,861,113 25,382,404Other non-current liabilities 12 1,168,808 - 934,458 -Deferred tax liability 13 11,928,511 311,885 7,482,795 910,683Provision for other liabilities and charges 14 1,594,613 - 1,236,917 -

35,939,06035,939,06035,939,06035,939,06035,939,060 311,885311,885311,885311,885311,885 51,515,28351,515,28351,515,28351,515,28351,515,283 26,293,08726,293,08726,293,08726,293,08726,293,087Net assetsNet assetsNet assetsNet assetsNet assets 53,319,12453,319,12453,319,12453,319,12453,319,124 35,185,154 35,185,154 35,185,154 35,185,154 35,185,154 44,878,733 44,878,733 44,878,733 44,878,733 44,878,733 33,218,521 33,218,521 33,218,521 33,218,521 33,218,521

Capital and reserves attributable toCapital and reserves attributable toCapital and reserves attributable toCapital and reserves attributable toCapital and reserves attributable toequity holdersequity holdersequity holdersequity holdersequity holdersShare capital 15 452,542 452,542 452,442 452,442Share premium account 16 29,735,182 29,735,182 29,716,870 29,716,870Revaluation reserve 17 7,215,257 217,242 7,215,257 217,242Retained earnings 18 14,908,560 4,780,188 7,343,127 2,831,967

52,311,54152,311,54152,311,54152,311,54152,311,541 35,185,154 35,185,154 35,185,154 35,185,154 35,185,154 44,727,696 44,727,696 44,727,696 44,727,696 44,727,696 33,218,521 33,218,521 33,218,521 33,218,521 33,218,521Minority interest 19 1,007,583 - 151,037 -Total equityTotal equityTotal equityTotal equityTotal equity 53,319,12453,319,12453,319,12453,319,12453,319,124 35,185,15435,185,15435,185,15435,185,15435,185,154 44,878,733 44,878,733 44,878,733 44,878,733 44,878,733 33,218,521 33,218,521 33,218,521 33,218,521 33,218,521

The financial statements and notes on pages 58 to 88were approved by the Board of Directors on 18 March 2010 and signed on its behalf by:

DIRECTORS:__________________________________DIRECTORS:__________________________________DIRECTORS:__________________________________DIRECTORS:__________________________________DIRECTORS:__________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________

The accounting policies and notes on pages 61 to 83 form an integral part of these financial statements.

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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009


Turnover 20 336,859,678 4,207,855 339,420,435 6,837,741Cost of sales (301,282,506) - (299,810,537) -Gross profitGross profitGross profitGross profitGross profit 35,577,17235,577,17235,577,17235,577,17235,577,172 4,207,855 4,207,855 4,207,855 4,207,855 4,207,855 39,609,898 39,609,898 39,609,898 39,609,898 39,609,898 6,837,741 6,837,741 6,837,741 6,837,741 6,837,741

Selling and marketing costs (7,435,802) - (7,144,126) -Administrative expenses 21 (18,087,443) (1,466,900) (17,420,675) (1,104,004)Interest received 22 3,570,953 4,921,350 4,548,759 4,308,339Other operating income 23 11,713,165 1,381,757 1,816,444 365,029

Operating profitOperating profitOperating profitOperating profitOperating profit 25,338,045 25,338,045 25,338,045 25,338,045 25,338,045 9,044,062 9,044,062 9,044,062 9,044,062 9,044,062 21,410,300 21,410,300 21,410,300 21,410,300 21,410,300 10,407,105 10,407,105 10,407,105 10,407,105 10,407,105

Interest payable and similar charges 24 (11,825,890) (4,222,749) (10,667,689) (3,895,439)Profit before taxation 25 13,512,155 4,821,313 10,742,611 6,511,666Taxation 26 (3,415,176) (159,952) (2,399,286) (168,099)

Profit after taxationProfit after taxationProfit after taxationProfit after taxationProfit after taxation 10,096,97910,096,97910,096,97910,096,97910,096,979 4,661,361 4,661,361 4,661,361 4,661,361 4,661,361 8,343,325 8,343,325 8,343,325 8,343,325 8,343,325 6,343,567 6,343,567 6,343,567 6,343,567 6,343,567

Attributable to:Equity holders of the company 18 10,243,168 4,661,361 8,339,273 6,343,567Minority interests 19 (146,189) - 4,052 -

10,096,97910,096,97910,096,97910,096,97910,096,979 4,661,3614,661,3614,661,3614,661,3614,661,361 8,343,325 8,343,325 8,343,325 8,343,325 8,343,325 6,343,567 6,343,567 6,343,567 6,343,567 6,343,567

Earnings per share for profit attributable toequity holders of the companyduring the year:

Basic earnings per share (kobo) 27 1,132 515 922 701

Diluted earnings per share (kobo) 27 1,132 515 922 701


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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2009STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2009STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2009STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2009STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2009


Cash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesNet cash flow from operating activities beforechanges in working capital 28 28,093,325 4,479,314 22,689,041 5,315,467

Net increase/(decrease) in working capital 29 35,698,352 (7,505,840) (34,210,938) (19,219,815)Income tax paid 26 (5,628,467) (187,106) (2,105,695) (583,836)Staff gratuity paid - - (141,671) (141,671)

Net cash generated from/(used in) operating activitiesNet cash generated from/(used in) operating activitiesNet cash generated from/(used in) operating activitiesNet cash generated from/(used in) operating activitiesNet cash generated from/(used in) operating activities 58,163,210 (3,213,632) (13,769,263) (14,629,855)Cash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesPurchase of property plant and equipment 4 (38,157,748) (7,411,042) (51,771,163) (572,179)Purchase of software - - (67,957) (64,595)Investment in subsidiaries - (7,344,126) - (43,780)Acquisition of subsidiary 38 (6,960,390) - - -Payments relating to pipeline construction 7 (6,744,918) - (5,037,374) -Pipeline construction costs recovery 7 2,796,583 - 1,737,170 -Proceeds from sale of property plant and equipment 450,955 68,220 250,812 -Signature bonus refunded 37 23,735,950 - - -Interest received 3,570,953 4,921,350 4,548,759 4,308,339

Cash (used in)/generated from investing activitiesCash (used in)/generated from investing activitiesCash (used in)/generated from investing activitiesCash (used in)/generated from investing activitiesCash (used in)/generated from investing activities (21,308,616) (9,765,598) (50,339,753) 3,627,785Cash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesRepayment of long term loan (38,322,707) (27,735,904) (2,099,921) (6,929,875)Proceeds from long term loans 20,729,492 - 28,136,372 23,545,000Proceed/ (repayment) of import finance facilities 19,318,100 - (1,754,643) (27,691)Share issue expenses - - (160,871) (160,871)Proceeds from finance lease - - 103,899 17,060Repayment of finance lease (2,620) (79,601) (247,407) (340,043)(Repayment)/proceeds from other short term loans (50,716,463) 33,968,442 74,575,348 28,046,662Increase/(decrease) in bank overdrafts 3,865,712 378,811 15,129,673 (6,728,717)Dividend paid (2,664,265) (2,664,265) (7,242,717) (7,242,717)Issue of shares 18,412 18,412 - -Interest paid (11,746,003) (4,222,749) (10,640,046) (3,895,439)

Net cash (used in)/generated from financing activitiesNet cash (used in)/generated from financing activitiesNet cash (used in)/generated from financing activitiesNet cash (used in)/generated from financing activitiesNet cash (used in)/generated from financing activities (59,520,342) (336,854) 95,799,687 26,283,369

Net change in cash and cash equivalentsNet change in cash and cash equivalentsNet change in cash and cash equivalentsNet change in cash and cash equivalentsNet change in cash and cash equivalents (22,665,746) (13,316,084) 31,690,671 15,281,300

Cash and cash equivalent at the beginning of the yearCash and cash equivalent at the beginning of the yearCash and cash equivalent at the beginning of the yearCash and cash equivalent at the beginning of the yearCash and cash equivalent at the beginning of the year 48,981,689 26,776,003 17,209,397 11,494,703

Exchange differenceExchange differenceExchange differenceExchange differenceExchange difference (555,531) - 81,621 -Cash and cash equivalents at end of the yearCash and cash equivalents at end of the yearCash and cash equivalents at end of the yearCash and cash equivalents at end of the yearCash and cash equivalents at end of the year 25,760,41025,760,41025,760,41025,760,41025,760,410 13,459,91813,459,91813,459,91813,459,91813,459,918 48,981,689 48,981,689 48,981,689 48,981,689 48,981,689 26,776,003 26,776,003 26,776,003 26,776,003 26,776,003

Cash at year end is analysed as follows:Cash at year end is analysed as follows:Cash at year end is analysed as follows:Cash at year end is analysed as follows:Cash at year end is analysed as follows:Cash at bank and in hand 7,103,932 1,344,955 16,947,560 1,719,086Fixed deposits* 18,656,478 12,114,963 32,034,129 25,056,917

25,760,41025,760,41025,760,41025,760,41025,760,410 13,459,91813,459,91813,459,91813,459,91813,459,918 48,981,689 48,981,689 48,981,689 48,981,689 48,981,689 26,776,003 26,776,003 26,776,003 26,776,003 26,776,003


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1.1.1.1.1. General informationGeneral informationGeneral informationGeneral informationGeneral informationOando Plc (formerly Unipetrol Nigeria Plc) was registered by aspecial resolution as a result of the acquisition of the shareholdingof Esso Africa Incorporated (principal shareholder of Esso Stan-dard Nigeria Limited) by the Federal Government of Nigeria. Itwas partially privatised in 1991 and fully privatised in the year2000 following the disposal of the 40% shareholding of FederalGovernment of Nigeria to Ocean and Oil Investments Limited andthe Nigerian public. In December 2002, the Company mergedwith Agip Nigeria Plc following its acquisition of 60% of AgipPetroli’s International B.V’s stake in Agip Nigeria Plc. The Com-pany formally changed its name from Unipetrol Nigeria Plc toOando Plc in December 2003.

Oando Plc (“the Company”) and its subsidiaries (together “theGroup”) have their primary listing on the Nigerian Stock Exchange(NSE) and its secondary listing on the JSE Limited (JohannesburgStock Exchange). The Group has marketing and distribution out-lets in Nigeria, Ghana and Togo and other smaller markets alongthe West African coast. In 2008, Oando Plc transferred its petro-leum marketing business and equity interests in other marketingcompanies to a new fully owned subsidiary, Oando Marketing Lim-ited. The Group has 100% interests respectively in two tradingcompanies, Oando Trading (Bermuda) and Oando Supply andTrading (Nigeria). These entities mainly supply petroleum prod-ucts to marketing companies and large industrial customers.

The Group provides energy services to Exploration and Produc-tion (E&P) companies through its fully owned subsidiary, OandoEnergy Services Limited. The Group also operates in the E&Psector through Oando Exploration and Production Limited (100%),Oando Production and Development Company Limited(95%),Oando OML 125 & 134 Limited (100%) and Equator Ex-ploration Limited (78.1%) which was acquired during the year.Other subsidiaries within the Group and their respective lines ofbusiness, including Gas and Power, are shown in note 36.

2.2.2.2.2. Summary of significant accounting policiesSummary of significant accounting policiesSummary of significant accounting policiesSummary of significant accounting policiesSummary of significant accounting policies2.12.12.12.12.1 Basis of preparationBasis of preparationBasis of preparationBasis of preparationBasis of preparation

The financial statements are prepared in compliance with Nige-rian Statements of Accounting Standards (SAS). The financialstatements are presented in the functional currency, Nigeria Naira(N), rounded to the nearest thousand, and prepared under thehistorical cost convention as modified by the revaluation of cer-tain property, plant and equipment.

The preparation of financial statements in conformity with gener-ally accepted accounting principles requires the use of estimatesand assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at thedate of the financial statements and the reported amounts of rev-enues and expenses during the reporting period. Although theseestimates are based on the Directors’ best knowledge of current

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 31 DECEMBER 2009SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 31 DECEMBER 2009SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 31 DECEMBER 2009SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 31 DECEMBER 2009SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 31 DECEMBER 2009events and actions, actual results ultimately may differ from thoseestimates.

2.22.22.22.22.2 ConsolidationConsolidationConsolidationConsolidationConsolidation(a)(a)(a)(a)(a) SubsidiariesSubsidiariesSubsidiariesSubsidiariesSubsidiaries

Subsidiaries include all entities (including special purpose enti-ties) over which the Group has the power to govern the financialand operating policies generally accompanying a shareholding ofmore than one half of the voting rights. The existence and effectof potential voting rights that are currently exercisable or convert-ible are considered when assessing whether the Group controlsanother entity. Subsidiaries are fully consolidated from the dateon which control is transferred to the Group. They are de-con-solidated from the date that control ceases.

The purchase method of accounting is used to account for theacquisition of subsidiaries by the Group. The cost of the acquisi-tion is measured as the fair value of the assets given, equity in-struments issued and liabilities incurred or assumed and the dateof exchange plus costs directly attributable to the acquisition. Iden-tifiable assets acquired and liabilities and contingent liabilities as-sumed in a business combination are measured initially at theirfair values at the acquisition date irrespective of the extent of anyminority interest. The excess of the cost of acquisition over thefair value of the Group’s share of the identifiable net assets ac-quired is recorded as goodwill. If the cost of acquisition is lessthan the fair value of the net assets of the subsidiary acquired,the difference is recognised directly in the equity as capital re-serve on consolidation.

All balances and unrealised surpluses and deficits on transac-tions between group companies have been eliminated. Wherenecessary, accounting policies for subsidiaries have beenchanged to ensure consistency with the policies adopted by theCompany. Separate disclosure (in equity) is made of Minority In-terests.

(b)(b)(b)(b)(b) AssociatesAssociatesAssociatesAssociatesAssociatesAssociates are all entities over which the Group has significantinfluence but not control, generally accompanying a shareholdingof between 20% and 50% of the voting rights. Investments inassociates are accounted for by the equity method of accountingand are initially recognised at cost. The Group’s investment inassociates includes goodwill (net of any accumulated impairmentloss) identified on acquisition.

The Group’s share of its associates’ post-acquisition profits orlosses is recognised in the income statement, and its share ofpost-acquisition movements in reserves is recognised in reserves.The cumulative post-acquisition movements are adjusted againstthe carrying amount of the investment. When the Group’s shareof losses in an associate equals or exceeds its interest in theassociate, including any other unsecured receivables, the Group

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does not recognise further losses, unless it has incurred obliga-tions or made payments on behalf of the associate. Unrealisedgains on transactions between the Group and its associates areeliminated to the extent of the Group’s interest in the associates.Unrealised losses are also eliminated unless the transaction pro-vides evidence of an impairment of the asset transferred.

The accounting policies of the associates are consistent with thepolicies adopted by the Group.

All subsidiaries and associates have uniform calendar year ends.

2.32.32.32.32.3 Segment reportingSegment reportingSegment reportingSegment reportingSegment reportingA business segment is a group of assets and operations engagedin providing products or services that are subject to risks andreturns that are different from those of other business segments.A geographical segment is engaged in providing products or ser-vices within a particular economic environment that are subjectto risks and returns that are different from those of segmentsoperating in other economic environments.

2.42.42.42.42.4 Foreign currency translationForeign currency translationForeign currency translationForeign currency translationForeign currency translation(a) Transactions and balances(a) Transactions and balances(a) Transactions and balances(a) Transactions and balances(a) Transactions and balancesTransactions in foreign currencies during the year are convertedinto the functional currency, Nigeria Naira, using the exchangerates prevailing at the dates of the transactions. Foreign exchangegains and losses resulting from the settlement of such transac-tions and from the translation at year-end exchange rates of mon-etary assets and liabilities denominated in foreign currencies arerecognised in the profit and loss account.

(b) Group companies(b) Group companies(b) Group companies(b) Group companies(b) Group companiesIn accordance with the Statement of Accounting Standards (SAS7) the financial statements of foreign entities, prior to consolida-tion, are translated into Naira using the Closing Rate Method asfollows:

(a) assets and liabilities, both monetary and non-monetary aretranslated at the closing rate;(b) income statement items are translated at the closing rate;(c) the exchange differences resulting from translating the open-ing net investment in the foreign entity at an exchange rate differ-ent from that at which it was previously reported is taken to aCapital Reserve Account.

2.52.52.52.52.5 Property, Plant and EquipmentProperty, Plant and EquipmentProperty, Plant and EquipmentProperty, Plant and EquipmentProperty, Plant and EquipmentAll categories of property, plant and equipment are initially re-corded at cost. Buildings and freehold land are subsequentlyshown at market value, based on triennial valuations by externalindependent valuers, less subsequent depreciation for buildings.All other property, plant and equipment is stated at historical costless depreciation.

Subsequent costs are included in the asset’s carrying amount orrecognised as a separate asset, as appropriate, only when it isprobable that future economic benefits associated with the itemwill flow to the company and the cost of the item can be mea-sured reliably. All other repairs and maintenance are charged tothe profit and loss account during the financial period in whichthey are incurred.

Increases in the carrying amount arising on revaluation of landand buildings are credited to revaluation reserve in shareholders’equity. Decreases that offset previous increases of the same as-set are charged against fair value reserves directly in equity; allother decreases are charged to the income statement. An asset’scarrying amount is written down immediately to its recoverableamount if the asset’s carrying amount is greater than its esti-mated recoverable amount.

Gains and losses on disposals are determined by comparing pro-ceeds with carrying amount. These are included in the incomestatement. When revalued assets are sold, the amounts includedin revaluation reserves are transferred to income statement.

Depreciation

Depreciation is calculated using the straight-line method to allo-cate their cost or revalued amounts to their residual values overtheir estimated useful lives, as follows:

%Building 2 - 5Bulk Plants, Terminal and Equipment 5 - 121/2Motor Vehicles 20 - 25Assets and Equipment 5 - 331/3

2.62.62.62.62.6 Upstream activitiesUpstream activitiesUpstream activitiesUpstream activitiesUpstream activitiesExploratory drilling costs are included in property, plant and equip-ment, pending determination of proved reserves.Following sucha determination, the capitalised costs are then amortised againstthe results of successful finds on a ‘unit of production’ basis.Capitalised costs are written off when it is determined that thewell is dry. Costs incurred in the production of crude oil from theCompany’s properties are charged to the income statement ofthe period in which they are incurred.

Tangible fixed assets related to oil and gas producing activitiesare depleted on a unit of production basis over the proved devel-oped reserves of the field concerned except in the case of assetswhose useful lives are shorter than the lifetime of the field, inwhich case the straight-line method is applied. Producible wellsare not depleted until they form part of a producing field. Rightsand concessions are depleted on the unit-of-production basis overthe total proved reserves of the relevant area.

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Estimated site restoration and abandonment costs are basedon current requirements, technology and price levels and arestated at fair value, and the associated asset retirement costsare capitalized as part of the carrying amount of the relatedtangible fixed assets. The fair value calculation of the liability isbased on the economic life of the production assets and dis-counted using the group’s average cost of borrowing. The obli-gation is reflected under provisions in the balance sheet.

The company changed its accounting policy from "Full Costmethod" to “Successful Effort method" during the year in orderto align with the Group's accounting policies for upstream ac-tivities when reporting under the International Financial Report-ing Standards Framework. The Successful Effort Method is inaccordance with SAS 14. In line with SAS 1 the effect of aretrospective application of the change in accounting policy isnil. Based on impairment test performed at the balance sheetdate, the carrying value of oil and gas assets is not higher thanthe recoverable amount. Accordingly no impairment loss hasbeen recognised

2.72.72.72.72.7 Intangible assetsIntangible assetsIntangible assetsIntangible assetsIntangible assets(a) Goodwill(a) Goodwill(a) Goodwill(a) Goodwill(a) GoodwillGoodwill represents the excess of the cost of an acquisition overthe fair value of the Group’s share of the net identifiable assets ofthe acquired subsidiary/associate at the date of acquisition. Good-will on acquisitions of subsidiaries is included in intangible as-sets. Goodwill on acquisitions of associates is included in invest-ments in associates. Goodwill is tested annually for impairmentand carried at cost less accumulated impairment losses. Gainsand losses on the disposal of an entity include the carrying amountof goodwill relating to the entity sold. Goodwill is allocated tocash-generating units for the purpose of impairment testing. Eachof those cash-generating units represents the Group’s invest-ment in each country of operation by each primary reportingsegment.

In accordance with SAS 26, goodwill is tested for impairmentannually, as well as when there are indications of impairment.

(b) Computer software(b) Computer software(b) Computer software(b) Computer software(b) Computer softwareAcquired computer software licenses are capitalised on the ba-sis of the costs incurred to acquire and bring to use the specificsoftware. These costs are amortised over their estimated usefullives (three to five years).

Costs associated with maintaining computer softwareprogrammes are recognised as an expense as incurred. Expen-diture on internally-developed software is capitalised if it meetsthe criteria for capitalising development costs. Direct costs in-clude the software development, employee costs and an appro-priate portion of relevant overheads. Computer software develop-ment costs recognised as assets are amortised over their esti-mated useful lives (not exceeding five years).

2.82.82.82.82.8 Long term receivable - pipeline cost recoveryLong term receivable - pipeline cost recoveryLong term receivable - pipeline cost recoveryLong term receivable - pipeline cost recoveryLong term receivable - pipeline cost recoveryLong term receivable in respect of pipeline cost recovery is ac-counted for at cost, less provision for impairment. Provision forimpairment of the long term receivable is established when thereis objective evidence that the Group will not be able to collect allamounts due according to the original terms of the receivable.

2.92.92.92.92.9 Impairment of assetsImpairment of assetsImpairment of assetsImpairment of assetsImpairment of assetsAssets are reviewed for impairment whenever events or changesin circumstances indicate that the carrying amount may not berecoverable. An impairment loss is recognised for the amount bywhich the asset’s carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset’s fairvalue less costs to sell and value in use. For the purposes ofassessing impairment, assets are grouped at the lowest levelsfor which there are separately identifiable cash flows (cash-gen-erating units).

2.102.102.102.102.10 InventoriesInventoriesInventoriesInventoriesInventoriesInventories are stated at lower of cost and net realisable value.Cost includes expenditure incurred in acquiring and transportingthe inventory to its present location. Cost is determined on usingthe weighted average method. For finished goods and work inprogress, raw materials, direct labour, other direct costs and re-lated production overheads (based on normal operating capac-ity). It excludes borrowing costs. Net realisable value is the esti-mated selling price in the ordinary course of business, less appli-cable variable selling expenses.

2.112.112.112.112.11 Trade receivablesTrade receivablesTrade receivablesTrade receivablesTrade receivablesTrade receivables are stated after provisions have been made fordebts considered doubtful of recovery. A provision for impairmentof trade receivables is established when there is objective evi-dence that the Group will not be able to collect all amounts dueaccording to the original terms of the receivables. The amount ofthe provision is recognised in the income statement.

2.122.122.122.122.12 Cash and cash equivalentsCash and cash equivalentsCash and cash equivalentsCash and cash equivalentsCash and cash equivalentsCash and cash equivalents includes cash in hand, deposits heldat call with banks and other short-term highly liquid investmentswith original maturities of three months or less.

2.132.132.132.132.13 BorrowingsBorrowingsBorrowingsBorrowingsBorrowingsBorrowings are recognised initially at fair value, net of transac-tion costs incurred. Borrowings are subsequently stated at amor-tised cost; any difference between the proceeds (net of transac-tion costs) and the redemption value is recognised in the incomestatement over the period of the borrowings using the effectiveinterest method. Borrowings are classified as current liabilitiesunless the Group has an unconditional right to defer settlementof the liability for at least 12 months after the balance sheetdate.

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Borrowing costsBorrowing costsBorrowing costsBorrowing costsBorrowing costsBorrowing costs are recognised as an expense in the period inwhich they are incurred, except when they are directly attribut-able to the acquisition, construction or production of a qualifyingasset.

2.142.142.142.142.14 Deferred income taxDeferred income taxDeferred income taxDeferred income taxDeferred income taxDeferred income tax is provided in full, using the liability method,on temporary differences arising between the tax bases of as-sets and liabilities and their carrying amounts in the consolidatedfinancial statements. However, if the deferred income tax arisesfrom initial recognition of an asset or liability in a transaction otherthan a business combination that at the time of the transactionaffects neither accounting nor taxable profit or loss, it is not ac-counted for. Deferred income tax is determined using tax rates(and laws) that have been enacted or substantively enacted bythe balance sheet date and are expected to apply when the re-lated deferred income tax asset is realised or the deferred in-come tax liability is settled.

Deferred income tax assets are recognised to the extent that it isprobable that future taxable profit will be available against whichthe temporary differences can be utilised.

Deferred income tax has not been provided on temporary differ-ences arising on investments in subsidiaries and associates, asthe timing of the reversal of the temporary difference is controlledby the Group and it is probable that the temporary difference willnot reverse in the foreseeable future. Where this ceases to bethe case, deferred tax will be provided for.

2.152.152.152.152.15 Employee benefitsEmployee benefitsEmployee benefitsEmployee benefitsEmployee benefitsThe Group operates a defined contribution retirement benefitscheme for its employees. A defined contribution plan is a pen-sion plan under which the Company pays fixed contributions intoa separate entity. The Company has no legal or constructive obli-gations to pay further contributions if the fund does not hold suf-ficient assets to pay all employees the benefits relating to em-ployee service in the current and prior periods.

The assets of all schemes are held in separate trustee adminis-tered funds, which are funded by contributions from both the com-pany and employees. The Company’s contributions to the de-fined contribution schemes are charged to the profit and lossaccount in the year to which they relate.

2.162.162.162.162.16 ProvisionsProvisionsProvisionsProvisionsProvisionsIn accordance with SAS 23, provisions for environmental resto-ration, restructuring costs and legal claims are recognised when:the Group has a present legal or constructive obligation as a re-sult of past events; it is more likely than not that an outflow ofresources will be required to settle the obligation; and the amounthas been reliably estimated. Restructuring provisions comprise

lease termination penalties and employee termination payments.Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihoodthat an outflow will be required in settlement is determined byconsidering the class of obligations as a whole. A provision isrecognised even if the likelihood of an outflow with respect to anyone item included in the same class of obligations may be small.

Provisions are measured at the present value of management’sbest estimate of the expenditure required to settle the presentobligation at the balance sheet date. The discount rate used todetermine the present value reflects current market assessmentsof the time value of money.

Decommissioning liabilitiesDecommissioning liabilitiesDecommissioning liabilitiesDecommissioning liabilitiesDecommissioning liabilitiesProvision is recognised for the decommissioning liabilities for un-derground tanks. Based on management's estimation of the fu-ture cash flows required for the decommissioning of those as-sets, a provision is recognised and the corresponding amountadded to the cost of the asset under property, plant and equip-ment. The present values are determined using the Company’saverage cost of borrowing. Subsequent depreciation charges ofthe asset are accounted for in accordance with the Company’sdepreciation policy and the accretion of discount (i.e. the increaseduring the period in the discounted amount of provision arisingfrom the passage of time) included in finance costs.

2.172.172.172.172.17 Share capitalShare capitalShare capitalShare capitalShare capitalOrdinary shares are classified as equity. Incidental costs directlyattributable to the issue of new shares or options are shown inequity as a deduction, net of tax, from the proceeds.

2.182.182.182.182.18 Revenue recognitionRevenue recognitionRevenue recognitionRevenue recognitionRevenue recognitionRevenue comprises the fair value of the sale of goods and ser-vices, net of value-added tax, rebates and discounts and aftereliminating sales within the Group.

Discounts are usually negotiated with commercial customers andare sometimes given on a transaction basis or fixed per customer,subject to subsequent reviews. The Group also gives rebatesper litre of petroleum products sold to retailers who operate theirown outlets.

Revenue is recognised as follows:

(a) Sale of products(a) Sale of products(a) Sale of products(a) Sale of products(a) Sale of productsRevenue from sale of petroleum products and gas is recognisedwhen a Group entity has delivered products to the customer, thecustomer has accepted the products and collectability of the re-lated receivables is reasonably assured.

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(b) Sale of services(b) Sale of services(b) Sale of services(b) Sale of services(b) Sale of servicesRevenue from sale of services, such as freight and through-putcharges, is recognised in the accounting period in which the ser-vices are rendered, by reference to completion of the specifictransaction assessed on the basis of the actual service providedas a proportion of the total services to be provided.

(c) Dividend income(c) Dividend income(c) Dividend income(c) Dividend income(c) Dividend incomeDividend income is recognised when the right to receive paymentis established.

(d) Interest income(d) Interest income(d) Interest income(d) Interest income(d) Interest incomeInterest income is recognised on a time proportion basis usingthe effective interest rate.

2.192.192.192.192.19 LeasesLeasesLeasesLeasesLeases

Operating leasesOperating leasesOperating leasesOperating leasesOperating leasesLeases in which a significant portion of the risks and rewards ofownership are retained by the lessor are classified as operatingleases. Payments made under operating leases (net of any in-centives received from the lessor) are charged to the income state-ment on a straight-line basis over the period of the lease.

Finance leasesFinance leasesFinance leasesFinance leasesFinance leasesLeases in which ownership, risks and rewards are transferred tothe lessee, who is obligated to pay such costs as insurance, main-tenance and similar charges on the asset are classified as fi-nance leases. Assets under finance lease are capitalised anddepreciated over their estimated useful lives in line with theGroup’s policy for assets of the same class. Finance chargesare allocated over the lease term.

2.202.202.202.202.20 Dividend distributionDividend distributionDividend distributionDividend distributionDividend distributionDividend distribution to the Company’s shareholders is recognisedas a liability in the Group’s financial statements in the period inwhich the dividends are approved by the Company’s sharehold-ers.

2.21 Quoted investments2.21 Quoted investments2.21 Quoted investments2.21 Quoted investments2.21 Quoted investmentsInvestments in quoted securities are stated after provisions havebeen made for permanent diminution in carrying amounts. A per-manent diminution is deem to have occurred when market valuesof quoted securities over a period of six months is significantlybelow the carrying amounts. The amount of the provision isrecognised in the income statement

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3.3.3.3.3. Segment informationSegment informationSegment informationSegment informationSegment information

3.13.13.13.13.1 Primary reporting format - business segmentsPrimary reporting format - business segmentsPrimary reporting format - business segmentsPrimary reporting format - business segmentsPrimary reporting format - business segmentsThe Group is broadly organised on a worldwide basis into sevenmain business segments within the energy industry.

(i) Exploration and production of oil and gas (E&P)(i) Exploration and production of oil and gas (E&P)(i) Exploration and production of oil and gas (E&P)(i) Exploration and production of oil and gas (E&P)(i) Exploration and production of oil and gas (E&P)This segment involves the exploration for and production of oiland gas through the acquisition of rights in oil blocks on the Ni-gerian continental shelf and deep offshore.

(ii) Marketing of petroleum products(ii) Marketing of petroleum products(ii) Marketing of petroleum products(ii) Marketing of petroleum products(ii) Marketing of petroleum productsThis segment involves the refining of crude and the marketingand sale of petroleum products. Over the years, the Group hadfocused primarily on the marketing of petroleum products. Pres-ently, the Group is in the process of acquiring and developing arefinery business. The activities of the trading companies are re-ported under this segment.

(iii) Supply and Trading(iii) Supply and Trading(iii) Supply and Trading(iii) Supply and Trading(iii) Supply and TradingThis segment is involved in trading of refined and unrefined pe-troleum products.

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2009NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2009NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2009NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2009NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2009

(iv) Refining and Terminals(iv) Refining and Terminals(iv) Refining and Terminals(iv) Refining and Terminals(iv) Refining and TerminalsOperations yet to commence. The group has three principalprojects currently planned – the construction of 210,000 MT im-port terminal in Lekki, the construction of LPG storage facility atApapa Terminal, and the construction of a marina jetty and sub-sea pipeline at Lagos Port.

(v) Gas and power(v) Gas and power(v) Gas and power(v) Gas and power(v) Gas and powerThe Group through the activities of its subsidiaries, Gaslink andEast Horizon Gas Company, is involved in the distribution of natu-ral gas. The Group also incorporated a Power company to servea niche in Nigeria’s power sector, by providing reliable power toindustrial customers.

(vi) Energy services(vi) Energy services(vi) Energy services(vi) Energy services(vi) Energy servicesThis segment involves the provision of services such as drillingand completion fluids and solid control waste management; oil-well cementing and other services to upstream companies.

vii) Corporate and othersvii) Corporate and othersvii) Corporate and othersvii) Corporate and othersvii) Corporate and othersThese include company activities that cannot be directly allocatedto any of the above segments.

The segment results for the year ended 31 December 2009 are as follows:ExplorationExplorationExplorationExplorationExploration MarketingMarketingMarketingMarketingMarketing Supply &Supply &Supply &Supply &Supply & Refining &Refining &Refining &Refining &Refining & Gas &Gas &Gas &Gas &Gas & EnergyEnergyEnergyEnergyEnergy Corporate &Corporate &Corporate &Corporate &Corporate & GroupGroupGroupGroupGroup

& Production& Production& Production& Production& Production tradingtradingtradingtradingtrading terminalsterminalsterminalsterminalsterminals PowerPowerPowerPowerPower ServicesServicesServicesServicesServices OthersOthersOthersOthersOthersTotal gross segment sales 12,221,383 163,324,178 192,415,924 - 10,455,445 6,076,108 - 384,493,038Inter-segment sales - - (47,633,360) - - - - (47,633,360)Sales 12,221,383 163,324,178 144,782,564 - 10,455,445 6,076,108 - 336,859,678Depreciation 3,463,719 1,448,107 20,277 - 29,589 533,991 274,779 5,770,462Amortisation - - 13,223 - - - 145,377 158,600Operating profit/(loss) 8,079,485 5,843,440 5,815,274 - 995,522 1,127,444 3,476,880 25,338,045Finance cost (2,805,638) (1,033,289) (2,581,572) - (110,778) (1,071,864) (4,222,749) (11,825,890)Profit before income tax 13,512,155Income tax expense (3,415,176)Profit for the year 10,096,97910,096,97910,096,97910,096,97910,096,979

The segment results for the year ended 31 December 2008 are as follows:ExplorationExplorationExplorationExplorationExploration MarketingMarketingMarketingMarketingMarketing Supply &Supply &Supply &Supply &Supply & Refining &Refining &Refining &Refining &Refining & Gas &Gas &Gas &Gas &Gas & EnergyEnergyEnergyEnergyEnergy Corporate &Corporate &Corporate &Corporate &Corporate & GroupGroupGroupGroupGroup

& Production& Production& Production& Production& Production tradingtradingtradingtradingtrading terminalsterminalsterminalsterminalsterminals PowerPowerPowerPowerPower ServicesServicesServicesServicesServices OthersOthersOthersOthersOthers

Total gross segment sales 13,890,880 181,949,922 186,701,318 - 6,491,321 4,093,926 - 393,127,367Inter-segment sales - - (53,706,932) - - - - (53,706,932)Sales 13,890,880 13,890,880 13,890,880 13,890,880 13,890,880 181,949,922 181,949,922 181,949,922 181,949,922 181,949,922 132,994,387132,994,387132,994,387132,994,387132,994,387 - - - - - 6,491,3216,491,3216,491,3216,491,3216,491,321 4,093,926 4,093,926 4,093,926 4,093,926 4,093,926 - - - - - 339,420,435 339,420,435 339,420,435 339,420,435 339,420,435Depreciation 4,096,4084,096,4084,096,4084,096,4084,096,408 1,312,012 1,312,012 1,312,012 1,312,012 1,312,012 25,299 25,299 25,299 25,299 25,299 - - - - - 23,051 23,051 23,051 23,051 23,051 117,783 117,783 117,783 117,783 117,783 218,413 218,413 218,413 218,413 218,413 5,792,966 5,792,966 5,792,966 5,792,966 5,792,966Amortisation ----- - - - - - - - - - - - - - - - - - - - - - - - - - 149,333 149,333 149,333 149,333 149,333 149,333 149,333 149,333 149,333 149,333Operating profit /(loss) 4,993,783 6,769,195 7,096,231 (39,585) 504,535 (1,025,749) 3,111,890 21,410,300Finance cost (911,994) (1,959,580) (3,368,089) - (255,394) (277,193) (3,895,439) (10,667,689)Profit before income tax 10,742,611Income tax expense (2,399,286)Profit for the year 8,343,3258,343,3258,343,3258,343,3258,343,325

Inter-segment revenue represents sales to the Marketing segment. Inter-segment transactions are entered into under the normal commercial termsand conditions that would also be available to unrelated third parties.

N’000N’000N’000N’000N’000

67

The segment assets and liabilities as at 31 December 2009 and capital expenditure for the year then ended are as follows:ExplorationExplorationExplorationExplorationExploration MarketingMarketingMarketingMarketingMarketing Supply &Supply &Supply &Supply &Supply & Refining &Refining &Refining &Refining &Refining & Gas &Gas &Gas &Gas &Gas & EnergyEnergyEnergyEnergyEnergy Corporate &Corporate &Corporate &Corporate &Corporate & GroupGroupGroupGroupGroup

& Production& Production& Production& Production& Production tradingtradingtradingtradingtrading terminalsterminalsterminalsterminalsterminals PowerPowerPowerPowerPower ServicesServicesServicesServicesServices OthersOthersOthersOthersOthers

Assets 102,358,041 60,514,654 44,643,388 2,835,446 33,384,843 44,434,878 18,492,847 306,664,097Liabilities 20,879,064 47,792,182 52,227,907 - 28,884,382 13,003,838 83,257,909 246,045,282Capital Expenditure* 13,970,136 1,199,139 19,516 1,835,533 1,502,103 12,224,656 7,406,665 38,157,748

The segment assets and liabilities as at 31 December 2008 and capital expenditure for the year then ended are as follows:

ExplorationExplorationExplorationExplorationExploration MarketingMarketingMarketingMarketingMarketing Supply &Supply &Supply &Supply &Supply & Refining &Refining &Refining &Refining &Refining & Gas &Gas &Gas &Gas &Gas & EnergyEnergyEnergyEnergyEnergy Corporate &Corporate &Corporate &Corporate &Corporate & GroupGroupGroupGroupGroup& Production& Production& Production& Production& Production tradingtradingtradingtradingtrading terminalsterminalsterminalsterminalsterminals PowerPowerPowerPowerPower ServicesServicesServicesServicesServices OthersOthersOthersOthersOthers

Assets 54,677,262 63,924,989 77,742,154 954,970 21,328,241 24,794,336 42,132,002 285,553,955Liabilities 7,835,435 33,595,695 83,204,913 - 17,586,843 14,716,663 74,683,965 231,623,514Capital Expenditure* 41,531,993 673,887 4,419 724,615 1,986,920 10,016,087 615,876 55,553,797

Segment assets consist primarily of property, plant and equipment, intangible assets, investments, inventories, receivables and operating cash.They exclude deferred taxation.

Segment liabilities comprise operating liabilities. They exclude corporate and deferred taxation.

*Capital expenditure comprises additions to property, plant and equipment and intangible assets (excluding revaluation surplus, decommissioningcosts and goodwill).

3.23.23.23.23.2 Secondary reporting format - geographical segments Secondary reporting format - geographical segments Secondary reporting format - geographical segments Secondary reporting format - geographical segments Secondary reporting format - geographical segments

The home country of the Company - which is also the main operating company - is Nigeria. The Group’s sales are mainly in Nigeria and othercountries within and outside the West African coast, namely, Ghana, Togo, and Liberia. ‘Other countries’ include Bermuda and the British VirginIsland.

Segment information on a geographical basis for the year ended and as at 31 December 2009 are as follows:


SalesSalesSalesSalesSalesWithin Nigeria 12,221,383 154,611,799 61,100,077 - 10,455,445 6,076,108 - 244,464,812Other West African countries 8,712,379 - - - - - 8,712,379Other countries 83,682,487 - - - - 83,682,487

12,221,383 12,221,383 12,221,383 12,221,383 12,221,383 163,324,178163,324,178163,324,178163,324,178163,324,178 144,782,564144,782,564144,782,564144,782,564144,782,564 - - - - - 10,455,445 10,455,445 10,455,445 10,455,445 10,455,445 6,076,108 6,076,108 6,076,108 6,076,108 6,076,108 - - - - - 336,859,678 336,859,678 336,859,678 336,859,678 336,859,678Total assetsTotal assetsTotal assetsTotal assetsTotal assets Within Nigeria 99,332,242 58,534,868 25,945,115 2,835,446 33,384,843 44,434,878 18,492,848 282,960,240Other West African countries 3,025,800 1,979,785 5,005,585Other countries - - 18,698,273 18,698,273

102,358,042102,358,042102,358,042102,358,042102,358,042 60,514,653 60,514,653 60,514,653 60,514,653 60,514,653 44,643,388 44,643,388 44,643,388 44,643,388 44,643,388 2,835,446 2,835,446 2,835,446 2,835,446 2,835,446 33,384,843 33,384,843 33,384,843 33,384,843 33,384,843 44,434,878 44,434,878 44,434,878 44,434,878 44,434,878 18,492,848 18,492,848 18,492,848 18,492,848 18,492,848 306,664,098 306,664,098 306,664,098 306,664,098 306,664,098

Capital expenditureCapital expenditureCapital expenditureCapital expenditureCapital expenditureWithin Nigeria 13,970,136 1,113,541 19,516 1,835,533 1,502,103 12,224,656 7,406,665 38,072,150Other West African countries 85,598 85,598Other countries -

13,970,13613,970,13613,970,13613,970,13613,970,136 1,199,1391,199,1391,199,1391,199,1391,199,139 19,516 19,516 19,516 19,516 19,516 1,835,533 1,835,533 1,835,533 1,835,533 1,835,533 1,502,1031,502,1031,502,1031,502,1031,502,103 12,224,656 12,224,656 12,224,656 12,224,656 12,224,656 7,406,665 7,406,665 7,406,665 7,406,665 7,406,665 38,157,74838,157,74838,157,74838,157,74838,157,748

N’000N’000N’000N’000N’000

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Segment information on a geographical basis for the year ended and as at 31 December 2008 are as follows:


SalesWithin Nigeria 13,890,880 172,632,162 77,202,325 - 6,491,321 4,093,926 - 274,310,613Other West African countries - 9,317,760 - - - - - 9,317,760Other countries - 55,792,062 - - - - 55,792,062

13,890,88013,890,88013,890,88013,890,88013,890,880 181,949,922181,949,922181,949,922181,949,922181,949,922 132,994,387132,994,387132,994,387132,994,387132,994,387 - - - - - 6,491,3216,491,3216,491,3216,491,3216,491,321 4,093,926 4,093,926 4,093,926 4,093,926 4,093,926 - - - - - 339,420,435 339,420,435 339,420,435 339,420,435 339,420,435

Total assetsWithin Nigeria 54,677,262 61,589,511 69,214,494 954,970 21,328,241 24,794,336 42,132,002 274,690,816Other West African countries - 2,335,478 - - - 2,335,478Other countries - 8,527,660 - - 8,527,660

54,677,26254,677,26254,677,26254,677,26254,677,262 63,924,989 63,924,989 63,924,989 63,924,989 63,924,989 77,742,15477,742,15477,742,15477,742,15477,742,154 954,970 954,970 954,970 954,970 954,970 21,328,241 21,328,241 21,328,241 21,328,241 21,328,241 24,794,33624,794,33624,794,33624,794,33624,794,336 42,132,002 42,132,002 42,132,002 42,132,002 42,132,002 285,553,955 285,553,955 285,553,955 285,553,955 285,553,955Capital expenditureWithin Nigeria 41,531,993 436,464 4,419 724,615 1,986,920 10,016,087 615,876 55,316,374Other West African countries - 237,423 - - - 237,423Other countries - - - - - -

41,531,99341,531,99341,531,99341,531,99341,531,993 673,887673,887673,887673,887673,887 4,4194,4194,4194,4194,419 724,615 724,615 724,615 724,615 724,615 1,986,9201,986,9201,986,9201,986,9201,986,920 10,016,08710,016,08710,016,08710,016,08710,016,087 615,876 615,876 615,876 615,876 615,876 55,553,797 55,553,797 55,553,797 55,553,797 55,553,797

Sales are disclosed based on the country in which the customer is located. Total assets are allocated based on where the assets are located.Capital expenditure is allocated based on where the assets are located.

4 Property, plant and equipment4 Property, plant and equipment4 Property, plant and equipment4 Property, plant and equipment4 Property, plant and equipment(4.1) Group(4.1) Group(4.1) Group(4.1) Group(4.1) Group

Fixtures,Fixtures,Fixtures,Fixtures,Fixtures,UpstreamUpstreamUpstreamUpstreamUpstream Land andLand andLand andLand andLand and Plant andPlant andPlant andPlant andPlant and MotorMotorMotorMotorMotor fittings, andfittings, andfittings, andfittings, andfittings, and ConstructionConstructionConstructionConstructionConstruction

AssetsAssetsAssetsAssetsAssets buildingsbuildingsbuildingsbuildingsbuildings machinerymachinerymachinerymachinerymachinery vehiclesvehiclesvehiclesvehiclesvehicles equipmentequipmentequipmentequipmentequipment in progressin progressin progressin progressin progress TotalTotalTotalTotalTotalCost/ValuationCost/ValuationCost/ValuationCost/ValuationCost/ValuationAt 1 January 2009 49,564,758 14,288,812 2,892,384 1,488,403 2,585,097 26,946,386 97,765,840Transfer/reclassification - 623,154 8,213,976 409 458,522 (9,296,061) -Additions 13,633,743 1,699,687 6,943,274 428,218 225,492 15,227,334 38,157,748Assets acquired from Equator 28,397,032 - - - - - 28,397,032Decommissioning asset addition 173,865 - 2,909 - - - 176,774Disposals (294,349) (20,691) (64,530) (178,629) (3,741) (728) (562,669)Signature bonus refunded (23,735,950) - - - - - (23,735,950)Exchange difference 3,632,039 - 984,906 - 353 - 4,617,298At 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009 71,371,13771,371,13771,371,13771,371,13771,371,137 16,590,96216,590,96216,590,96216,590,96216,590,962 18,972,919 18,972,919 18,972,919 18,972,919 18,972,919 1,738,4011,738,4011,738,4011,738,4011,738,401 3,265,7233,265,7233,265,7233,265,7233,265,723 32,876,93132,876,93132,876,93132,876,93132,876,931 144,816,073 144,816,073 144,816,073 144,816,073 144,816,073

DepreciationDepreciationDepreciationDepreciationDepreciationAt 1 January 2009 4,096,408 642,522 755,921 831,407 1,536,393 - 7,862,651Transfer/reclassification - - - - - - -Charge for the year 3,463,719 644,583 1,000,949 340,172 321,039 - 5,770,462Disposals - (2,296) (25,495) (157,647) (3,425) - (188,863)Exchange difference (341,249) - - - - - (341,249)At 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009 7,218,8787,218,8787,218,8787,218,8787,218,878 1,284,8091,284,8091,284,8091,284,8091,284,809 1,731,3751,731,3751,731,3751,731,3751,731,375 1,013,932 1,013,932 1,013,932 1,013,932 1,013,932 1,854,007 1,854,007 1,854,007 1,854,007 1,854,007 - - - - - 13,103,001 13,103,001 13,103,001 13,103,001 13,103,001

Net book valueNet book valueNet book valueNet book valueNet book valueAt 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009 64,152,25964,152,25964,152,25964,152,25964,152,259 15,306,15315,306,15315,306,15315,306,15315,306,153 17,241,544 17,241,544 17,241,544 17,241,544 17,241,544 724,469724,469724,469724,469724,469 1,411,716 1,411,716 1,411,716 1,411,716 1,411,716 32,876,931 32,876,931 32,876,931 32,876,931 32,876,931 131,713,072 131,713,072 131,713,072 131,713,072 131,713,072At 31 December 2008At 31 December 2008At 31 December 2008At 31 December 2008At 31 December 2008 45,468,35045,468,35045,468,35045,468,35045,468,350 13,646,29013,646,29013,646,29013,646,29013,646,290 2,136,4632,136,4632,136,4632,136,4632,136,463 656,996656,996656,996656,996656,996 1,048,7041,048,7041,048,7041,048,7041,048,704 26,946,38726,946,38726,946,38726,946,38726,946,387 89,903,189 89,903,189 89,903,189 89,903,189 89,903,189

See note 37 for details of upstream assets.

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(4.2) Company(4.2) Company(4.2) Company(4.2) Company(4.2) Company Fixtures,Fixtures,Fixtures,Fixtures,Fixtures,Land andLand andLand andLand andLand and Plant andPlant andPlant andPlant andPlant and MotorMotorMotorMotorMotor fittings, andfittings, andfittings, andfittings, andfittings, and ConstructionConstructionConstructionConstructionConstructionbuildingsbuildingsbuildingsbuildingsbuildings machinerymachinerymachinerymachinerymachinery vehiclesvehiclesvehiclesvehiclesvehicles equipmentequipmentequipmentequipmentequipment in progressin progressin progressin progressin progress TotalTotalTotalTotalTotal

Cost/ValuationAt 1 January 2009 568,390 44,055 465,510 632,579 375,211 2,085,745Transfer/reclassification* - - - - 242,049 242,049Additions 263 8,803 123,759 148,720 7,129,497 7,411,042

-Disposals (19,250) - (15,679) (498) - (35,427)At 31 December 2009 549,403 52,858 573,590 780,801 7,746,757 9,703,409

DepreciationAt 1 January 2009 28,864 15,233 161,652 340,961 - 546,710Transfer/reclassification - - - - - -Charge for the year 20,071 5,523 124,353 124,832 - 274,779Disposals (19,250) - (9,545) (264) - (29,059)

At 31 December 2009 29,685 20,756 276,460 465,529 - 792,430Net book valueNet book valueNet book valueNet book valueNet book valueAt 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009At 31 December 2009 519,718519,718519,718519,718519,718 32,10232,10232,10232,10232,102 297,130 297,130 297,130 297,130 297,130 315,272315,272315,272315,272315,272 7,746,7577,746,7577,746,7577,746,7577,746,757 8,910,979 8,910,979 8,910,979 8,910,979 8,910,979At 31 December 2008At 31 December 2008At 31 December 2008At 31 December 2008At 31 December 2008 539,526539,526539,526539,526539,526 28,82228,82228,82228,82228,822 303,858303,858303,858303,858303,858 291,618291,618291,618291,618291,618 375,211375,211375,211375,211375,211 1,539,035 1,539,035 1,539,035 1,539,035 1,539,035

*Transfers/reclassifications are all to subsidiary entities.

Property, plant and equipment include the following assets which were held under finance leases at year end.Motor vehiclesMotor vehiclesMotor vehiclesMotor vehiclesMotor vehicles Total Total Total Total Total

Cost 1,474,588 1,474,588Accumulated depreciation (901,113) (901,113)

573,475 573,475

Assets acquired under finance lease have been capitalised and depreciated in accordance with the requirements of the Statement of AccountingStandard No. 11. Depreciation charges for the year are included in administrative expenses. The lease period for these assets does not exceed 5years

December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 20085 Intangible assets5 Intangible assets5 Intangible assets5 Intangible assets5 Intangible assets GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompanyGoodwill (note 5.1) 23,483,905 - 21,706,057 -Software costs (note 5.2) 485,843 448,000 644,456 597,334

23,969,74823,969,74823,969,74823,969,74823,969,748 448,000448,000448,000448,000448,000 22,350,51322,350,51322,350,51322,350,51322,350,513 597,334 597,334 597,334 597,334 597,334(5.1) Goodwill(5.1) Goodwill(5.1) Goodwill(5.1) Goodwill(5.1) GoodwillMovement in goodwill is analysed as follows:CostAt 1 January 23,456,162 - 23,489,044 10,609,108*Additions: - - -Goodwill on business combination 1,752,019 - - -

Others 25,829 - - -Transfer to Oando Marketing - - - (10,609,108)Write off - - (32,882) -At 31 December 25,234,01025,234,01025,234,01025,234,01025,234,010 - - - - - 23,456,16223,456,16223,456,16223,456,16223,456,162 - - - - -AmortisationAt 1 January 1,750,105 - 1,750,105 1,591,366Transfer to Oando Marketing - - - (1,591,366)At 31 December 1,750,105 - 1,750,105 -Net book value at 31 December 23,483,90523,483,90523,483,90523,483,90523,483,905 - - - - - 21,706,057 21,706,057 21,706,057 21,706,057 21,706,057 - - - - -

*Additions relate to goodwill on the acquisition of Equator. See note 38 for further details.

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Impairment testing of goodwillImpairment testing of goodwillImpairment testing of goodwillImpairment testing of goodwillImpairment testing of goodwillIn accordance with the Group’s accounting policy, goodwill is not amortised but individually tested annually for impairment. Goodwill is allo-cated to the Group’s cash-generating units (CGUs) identified according to the business segments. Impairment tests were conducted as at thebalance sheet date based on value in use calculations. The calculations used cash flow projections based on financial forecasts covering a fiveyear-period. The discount rate used is the pre-tax interest rate that reflects the current market assessment of the risks specific to the businesssegment.

Based on the impairment test, the carrying amount of goodwill is not higher than the recoverable value. Accordingly, no impairment loss hasbeen recognised.

(5.2) Software costs(5.2) Software costs(5.2) Software costs(5.2) Software costs(5.2) Software costsIn accordance with the Group’s accounting policy, deferred software costs are amortised over 5 years. Current year charge of N158.6 million(2008: N149.3 million) is included in other administrative expenses.

66666 Long term investmentsLong term investmentsLong term investmentsLong term investmentsLong term investments December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 2008GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany

Quoted shares 10,000 10,000 10,000 10,000

Provision for diminution in value (9,000) (9,000) (8,000) (8,000)1,000 1,000 2,000 2,000

Unquoted sharesAt 1 January - 32,129,055 - 16,834,848Additions - 7,352,953 - 15,616,830Transfers to subsidiaries - (8,828) - (322,623)Provision for diminution in value

(2,500) - -At 31 December - 39,470,680 39,470,680 39,470,680 39,470,680 39,470,680 - 32,129,055 32,129,055 32,129,055 32,129,055 32,129,055Total investments 1,0001,0001,0001,0001,000 39,471,68039,471,68039,471,68039,471,68039,471,680 2,0002,0002,0002,0002,000 32,131,055 32,131,055 32,131,055 32,131,055 32,131,055

On 28th June 2007, the shareholders of the Company, through a court ordered meeting, approved the transfer of its downstream petroleummarketing assets, liabilities and undertakings to Oando Marketing Limited in exchange for shares in Oando Marketing. The Company effectedthe transfer on 1 January 2008. The total net assets transferred was N15.573billion in exchange for 350million ordinary shares of 0.50k eachin Oando Marketing Limited. Included in additions for 2009 is the investment of 78.1% interests in Equator Exploration Limited (See note 38).

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December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 2008GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany

The carrying amount of investments transferred areanalysed as follows:UNITAB Nigeria Limited - - - 20,400Oando (Ghana) Limited - - - 146,743Unipetrol Sierra Leone - - - 4,400Oando Benin - - - 3,997Oando Togo SA - - - 171,883OML 125 & 134 BVI Limited - 6,328 - -OML 125 & 134 Limited - 2,500 - -Provision for diminution in value - - - (24,800)

- 8,828 - 322,623Analysis of the company’s unquoted investment is as follows:Akute Power Limited - 2,500 - 2,500Apapa SPM Limited - 19,125 - 19,125East Horizon Gas Co. Ltd. - 10,000 - 10,000Gaslink Nigeria Limited - 6,933,125 - 6,933,125Oando Energy Services Limited - 550,497 - 550,497Oando Exploration and Production Limited - 2,039,153 - 2,039,152Oando Gas and Power Limited - 1,000 - 1,000Oando Lekki Refinery Limited - 2,500 - 2,500Oando Marketing Limited - 15,573,050 - 15,573,050Oando Production and Development Company Limited - 3,315,774 - 3,315,775Oando Port Harcourt Refinery Limited - 2,500 - 2,500Oando Properties Limited - 250 - 250Oando Teamwork Limited - - - -Oando Respect Limited - - - -Oando Supply and Trading Limited - 763,344 - 763,344Oando Trading Limited Bermuda - 2,894,333 - 2,894,333Oando Integrity Limited - 6,538 - 6,538OML 125 & 134 BVI Limited - - - 6,328OML 125 & 134 Limited - - - 2,500Oando Akepo Limited - 2,500 - -Oando Terminals and Logistics - 2,500 - -Equator Exploration Limited - 7,347,953 - -Oando Liberia - 6,538 - 6,538

- - - -- 39,473,180 - 32,129,054

Provision for diminution in value - (2,500) - -- 39,470,68039,470,68039,470,68039,470,68039,470,680 - - - - - 32,129,054 32,129,054 32,129,054 32,129,054 32,129,054

Provision for diminution in value is analysed as follows:Provision for diminution in value is analysed as follows:Provision for diminution in value is analysed as follows:Provision for diminution in value is analysed as follows:Provision for diminution in value is analysed as follows:Oando Port Harcourt Refinery Limited - 2,500 - -

77777 Long term receivablesLong term receivablesLong term receivablesLong term receivablesLong term receivables GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompanyLong term prepayment 717,848 7,380 427,570 44,368Pipeline Cost Recovery Account 18,065,542 - 14,117,207 -

18,783,39018,783,39018,783,39018,783,39018,783,390 7,3807,3807,3807,3807,380 14,544,77714,544,77714,544,77714,544,77714,544,777 44,36844,36844,36844,36844,368

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72

The balance relates to amounts recoverable from Nigerian Gas Company (NGC) for the construction of gas pipeline distribution infrastruc-ture within the Greater Lagos Industrial Area by Gaslink Nigeria Limited (“Gaslink”) and in Calabar/ Akwa Ibom, by East Horizon GasCompany Limited (“East Horizon”). Under the terms of the Natural Gas Sale and Purchase Agreement (NGSPA) between the abovecompanies and NGC respectively, Gaslink and East Horizon construct and operate the respective pipelines until the capital invested plusinterest is fully recovered on the basis of the agreed recovery formulae. The tenure of the respective NGSPA does not exceed 20 years.

The PCRA includes land and building construction costs, plant and equipment costs, work-in-progress, pipeline construction costs, projectvehicle costs, interest on borrowings, bank charges and fees, pipeline insurance cost and other charges relevant to the pipeline constructionsuch as legal and professional fees. This is stated at cost less amounts recovered from gas purchases.


Movement in the PCRA is analysed as follows:At 1 January 14,117,207 - 10,817,003 -Additions during the year 6,744,918 - 5,037,374 -Capital recovered during the year (2,796,583) - (1,737,170) -At 31 December 18,065,54218,065,54218,065,54218,065,54218,065,542 - - - - - 14,117,207 14,117,207 14,117,207 14,117,207 14,117,207 - - - - -

88888 InventoriesInventoriesInventoriesInventoriesInventoriesFinished products 8,179,288 - 13,525,642 -Products in transit 1,293,340 - 2,221,187 -

9,472,628 - 15,746,829 -Consumable materials and engineering stocks 486,861 41,476 380,367 33,942

9,959,489 41,476 16,127,196 33,942Provision for slow moving and obsolete stocks (266,178) - (58,356) -

9,693,311 9,693,311 9,693,311 9,693,311 9,693,311 41,476 41,476 41,476 41,476 41,476 16,068,84016,068,84016,068,84016,068,84016,068,840 33,942 33,942 33,942 33,942 33,94299999 Debtors and prepaymentsDebtors and prepaymentsDebtors and prepaymentsDebtors and prepaymentsDebtors and prepayments

Trade debtors 49,775,898 - 24,332,464 -Bridging claims receivable 14,835,883 - 8,896,036 -Petroleum Support Fund 13,795,982 - 44,828,923 -Deposit for import 363,346 - 635,087 -Other debtors 16,130,450 1,378,244 15,153,328 457,522Amounts due from related companies - 341,283,509 - 120,626,018Prepayments 3,473,955 218,404 1,223,973 291,692

98,375,514 342,880,157 95,069,811 121,375,232Provision for doubtful trade and other receivables (1,632,348) - (1,366,862) (9,159)

96,743,16696,743,16696,743,16696,743,16696,743,166 342,880,157342,880,157342,880,157342,880,157342,880,157 93,702,94993,702,94993,702,94993,702,94993,702,949 121,366,073 121,366,073 121,366,073 121,366,073 121,366,0731010101010 Creditors and accrualsCreditors and accrualsCreditors and accrualsCreditors and accrualsCreditors and accruals

Trade creditors 38,014,075 2,468,990 26,625445 54,631Other creditors 29,188,023 98,550 15,119,587 313,439Accruals 8,089,058 - 3,039,662 582,754Amounts due to other related companies - 286,236,114 - 73,061,127Deferred income 6,219, 903 457,842 -

81,511,05981,511,05981,511,05981,511,05981,511,059 288,803,654288,803,654288,803,654288,803,654288,803,654 45,242,53645,242,53645,242,53645,242,53645,242,536 74,011,95174,011,95174,011,95174,011,95174,011,9511111111111 BorrowingsBorrowingsBorrowingsBorrowingsBorrowings

CurrentCurrentCurrentCurrentCurrentBank overdrafts 28,499,968 378,811 24,634,256 -Import finance facilities 19,994,148 - 676,048 -Finance lease obligation 164,367 - 166,987 79,601Other short term loans 60,114,155 79,884,829 110,830,618 45,916,387Current portion of long term loans 31,700,913 - 6,039,333 2,353,500

140,473,551140,473,551140,473,551140,473,551140,473,551 80,263,640 80,263,640 80,263,640 80,263,640 80,263,640 142,347,242 142,347,242 142,347,242 142,347,242 142,347,242 48,349,488 48,349,488 48,349,488 48,349,488 48,349,488

Included in deferred revenue are payments of N2.1billion (2008: N457.8million) received from customers in respect of unutilised gas from take orpay contracts

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Import finance facilities relate to special short term facilities obtained from banks, to finance letters of credit opened in respect of the importationof refined petroleum products. Other short term loans relate to various commercial papers and bankers acceptance obtained from banks tofinance exploration and production activitied, rig acquistions and working capital needs.

December 2009December 2009December 2009December 2009December 2009 De- De- De- De- De-cember 2008cember 2008cember 2008cember 2008cember 2008 GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroupCompanyCompanyCompanyCompanyCompany

Non-currentNon-currentNon-currentNon-currentNon-currentSyndicated/other project loans 11,340,491 - 37,941,166 23,545,000Finance lease obligation - - 164,368 72,279Other long term loans 9,906,637 - 3,755,579 1,765,125

21,247,12821,247,12821,247,12821,247,12821,247,128 - - - - - 41,861,113 41,861,113 41,861,113 41,861,113 41,861,113 25,382,404 25,382,404 25,382,404 25,382,404 25,382,404Current borrowings are analysed as follows:Current borrowings are analysed as follows:Current borrowings are analysed as follows:Current borrowings are analysed as follows:Current borrowings are analysed as follows:Loan type/PurposeLoan type/PurposeLoan type/PurposeLoan type/PurposeLoan type/Purpose Tenor/Interest rateTenor/Interest rateTenor/Interest rateTenor/Interest rateTenor/Interest rate SecuritySecuritySecuritySecuritySecurity FacilityFacilityFacilityFacilityFacility DrawdownDrawdownDrawdownDrawdownDrawdown

amountamountamountamountamount /Balance/Balance/Balance/Balance/Balance Import finance facility to finance 3 - 90 days Sales proceeds of products finances under 90,205,632 19,994,148the purchase of petroleum Libor + 1.75 - 4% the facilityproducts for resale.Commercial papers to finance 30 - 180 days Corporate guarantee/ Security trust deed 45,747,530 54,724,206the acquisition of upstream 11 - 24 %assets and rigsCommercial papers to finance 3 - 90 days Stock Hypotecation, cash and cheque 3,788,000 3,788,000product allocation from PPMC and Libor + 1.75 - 4% collection from product salesimportation of petroleum products - 1,601,949Finance lease Asset financed - 164,367Overdraft 3 - 365 days Corporate guarantee/ Security trust deed 14,128,000 28,499,968

108,772,638Current portion of non current loans 31,700,913

140,473,551140,473,551140,473,551140,473,551140,473,551Non current borrowings are analysed as follows:Non current borrowings are analysed as follows:Non current borrowings are analysed as follows:Non current borrowings are analysed as follows:Non current borrowings are analysed as follows:Loan type/PurposeLoan type/PurposeLoan type/PurposeLoan type/PurposeLoan type/Purpose Tenor/Interest rateTenor/Interest rateTenor/Interest rateTenor/Interest rateTenor/Interest rate SecuritySecuritySecuritySecuritySecurity FacilityFacilityFacilityFacilityFacility DrawdownDrawdownDrawdownDrawdownDrawdown

amountamountamountamountamount /Balance/Balance/Balance/Balance/BalanceTerm loan- working capital finance 5 years/ Libor + 4% Guarantee by Oando Plc 14,022,000 6,009,465Term loan- working capital finance 36months/ Trust deed arrangement 14,022,000 4,206,600

Libor + 2.75%Syndicated loan- Greater 3 years/20% Pledge of assets being financed;Lagos III gas Pipeline Project forGaslink Corporate Guarantee of Oando Plc 1,100,000 825,000Syndicated loans (2) customers’ 3 years/ 20% Pledge of assets being financed;connect for Gaslink Corporate Guarantee of Oando Plc 2,800,000 933,333Term loan- Equity financing 12 months (with roll- Corporate Guarantee of Oando Plc to pay interest

over option)/18.25% charges, fixed deposit of the same amount 2,500,000 2,500,000Syndicated gas project facility- 7 years/ 21.60% Corporate Guarantee of Oando Plc, Domicilliation 7,601,490 7,600,001UNICEMENT gas pipeline of current account of gas sales proceedsproject by East HorizonCompany LimitedSyndicated gas project facility- 3 years/18.70% Corporate Guarantee of Oando Plc, Domicilliation 3,800,000 3,398,000UNICEMENT gas pipeline project of current account of gas sales proceedsby East Horizon Company LimitedProject finance facility- Akute IPP 7years/Libor +3% Corporate Guarantee of Oando Plc 3,763,800 3,573,101Term loan- acquisition of 2yrs/ 13.9% Guarantee of GTB and Zenith 23,560,000 23,560,000upstream assets (payablein January 2010)Others 342,541Total non-current loans 52,948,041Less current portion (31,700,913)

21,247,12821,247,12821,247,12821,247,12821,247,128

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74

MinimumMinimumMinimumMinimumMinimum FutureFutureFutureFutureFuture PresentPresentPresentPresentPresentlease paymentlease paymentlease paymentlease paymentlease payment financefinancefinancefinancefinance valuevaluevaluevaluevalue

chargeschargeschargeschargescharges of obligationof obligationof obligationof obligationof obligationPeriod not later than one year 223,229 58,862 164,367


1212121212 Other non-current liabilitiesOther non-current liabilitiesOther non-current liabilitiesOther non-current liabilitiesOther non-current liabilitiesCustomers’ security deposits 1,168,808 - 934,458 -

Customer security deposits represent amounts deposited by dealers in respect of product supply, use of the Company’s equipment andretailing outlets. The deposits do not attract any interest and are refundable to the dealer less any amounts owed to the Company at theexpiration of the dealership agreement.

1313131313 Deferred taxationDeferred taxationDeferred taxationDeferred taxationDeferred taxationDeferred taxation - non-current assetDeferred taxation - non-current assetDeferred taxation - non-current assetDeferred taxation - non-current assetDeferred taxation - non-current assetAt 1 January 881,028 - - -Provision during the year (Note 26) 1,087,269 198,917 1,044,162 -Net over provision for taxes (24,448) -At 31 December 1,943,849 1,943,849 1,943,849 1,943,849 1,943,849 198,917 198,917 198,917 198,917 198,917 1,044,162 1,044,162 1,044,162 1,044,162 1,044,162 - - - - -Deferred taxation - current assetDeferred taxation - current assetDeferred taxation - current assetDeferred taxation - current assetDeferred taxation - current assetAt 1 January 1,342,715 - - -Provision during the year (Note 26) 5,516,752 - 1,179,580 -Exchange difference 63,188 -At 31 December 6,922,6556,922,6556,922,6556,922,6556,922,655 - - - - - 1,179,580 1,179,580 1,179,580 1,179,580 1,179,580 - - - - -Deferred taxation - current liabilityDeferred taxation - current liabilityDeferred taxation - current liabilityDeferred taxation - current liabilityDeferred taxation - current liabilityAt 1 January 437,329 - - -Provision during the year (Note 26) 486,408 217,691 437,329 -At 31 December 923,737 923,737 923,737 923,737 923,737 217,691217,691217,691217,691217,691 437,329 437,329 437,329 437,329 437,329 -Deferred taxation - non-current liabilityDeferred taxation - non-current liabilityDeferred taxation - non-current liabilityDeferred taxation - non-current liabilityDeferred taxation - non-current liabilityAt 1 January 7,482,796 910,683 889,405 849,344Deferred tax transferred on acquisition of OML 125 & 134 - - 3,782,634 -Provision/(write back) during the year (Note 26) 3,945,702 (18,774) 77,343 (8,808)Revaluation surplus - - 2,756,075 70,147Exchange difference 500,013 - (22,662) -Transfer to Oando Marketing - (580,024)At 31 December 11,928,51111,928,51111,928,51111,928,51111,928,511 311,885 311,885 311,885 311,885 311,885 7,482,7957,482,7957,482,7957,482,7957,482,795 910,683 910,683 910,683 910,683 910,683

Deferred tax liability is as a result of accelerated capital allowances on existing property, plant and equipment and transferred liability in respectof Oando OML 125 & 134 acquired during the year. Deferred tax related to revaluation surplus is included in revaluation reserve within equity.

Deferred tax asset is as a result of unrelieved tax losses from Oando Energy Services, Oando Production and Development Company andOando Exploration and Production Limited and unrealised exchange losses.

1414141414 Provision for other liabilities & chargesProvision for other liabilities & chargesProvision for other liabilities & chargesProvision for other liabilities & chargesProvision for other liabilities & chargesAt 1 January 1,236,917 - 425,279 425,279Additions/Valuation change 176,775 - 783,995 -Accretion discount 79,887 - 27,643 -Transfer to Oando Marketing - - - (425,279)Exchange difference 101,034 - - -At 31 December 1,594,6131,594,6131,594,6131,594,6131,594,613 ----- 1,236,917 1,236,917 1,236,917 1,236,917 1,236,917 - - - - -

In accordance with the Group accounting policy a provision is recognised for obligations relating to underground tanks and oil fields decom-missioning, restoration and abandonment, at the present value of management’s best estimate of the expenditure required to settle the presentobligation at the balance sheet date. A corresponding amount is included under plant and machinery upon recognition, and depreciated inaccordance with the Group’s policy.

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75

N’000N’000N’000N’000N’000

December 2009December 2009December 2009December 2009December 2009 December 2008December 2008December 2008December 2008December 2008GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany

1515151515 Share capitalShare capitalShare capitalShare capitalShare capitalAuthorised:2,000,000,000 Ordinary shares of 50k each 1,000,000 1,000,000 500,000 500,000

On the 4th of November 2009, the company through an ordinary resolution ofshareholders increased its authorised share capital to N1 billion by the creationof 1 billion additional ordinary shares of N0.50 .

Issued and fully paid:Issued and fully paid:Issued and fully paid:Issued and fully paid:Issued and fully paid:At beginning of the year754,070,523 ordinary shares of 50k each 452,442 452,442 377,035 377,035

Additions:2008: 150,814,105 ordinary shares of 50k each - bonus - - 75,407 75,4072009: 200,000 ordinary shares of 50k each

100 100At end of the year905,084,628 Ordinary shares of 50k each 452,542452,542452,542452,542452,542 452,542 452,542 452,542 452,542 452,542 452,442 452,442 452,442 452,442 452,442 452,442 452,442 452,442 452,442 452,442

On the 22 of June 2009, the company issued 200,000 ordinary shares of N0.50 each to the trustees of the Oando Staff Equity ParticipationScheme. The difference between the nominal value and the market value on award date is reflected as additions to share premium accountin Note 16.

1616161616 Share premium accountShare premium accountShare premium accountShare premium accountShare premium accountAt beginning of the year 29,716,870 29,716,870 29,877,741 29,877,741Issue of shares 18,312 18,312 - -Share issue cost - - (160,871) (160,871)At end of the year

29,735,18229,735,18229,735,18229,735,18229,735,182 29,735,182 29,735,182 29,735,182 29,735,182 29,735,182 29,716,870 29,716,870 29,716,870 29,716,870 29,716,870 29,716,870 29,716,870 29,716,870 29,716,870 29,716,870

Share issue cost relate to mainly charges and fees in respect of the issue ofshares for the share swap exercise in 2007 which crystalised in 2008.Difference between the nominal value and the market value on award date isreflected as additions to share premium account in note 16.

1717171717 Revaluation reserveRevaluation reserveRevaluation reserveRevaluation reserveRevaluation reserveAt beginning of the year 7,215,257 217,242 10,652,936 10,652,936Reversal of revaluation surplus - - (681,604) (681,604)Intragroup transfer (Oando Marketing) - - - (9,683,943)Deferred tax - - (2,756,075) (70,147)At end of the year 7,215,2577,215,2577,215,2577,215,2577,215,257 217,242 217,242 217,242 217,242 217,242 7,215,257 7,215,257 7,215,257 7,215,257 7,215,257 217,242 217,242 217,242 217,242 217,242

Deferred tax on surplus on revaluation of property, plant and equipment has been recognised on an asset basis. This recognises the potentialcrystalisation of the liabilities in the event of disposal of the assets.

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Revaluation reserve is not available for redistribution to shareholders until realised through disposal of related assets.December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 2008

GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany1818181818 Retained earningsRetained earningsRetained earningsRetained earningsRetained earnings

At beginning of the year 7,343,127 2,831,967 6,321,140 3,805,863Exchange difference 35,404 - 177 -Dividend: - - - -2007 final - - (4,526,954) (4,526,954)2007 bonus - - (75,407) (75,407)2008 Interim - - (2,715,102) (2,715,102)2008 final (2,713,139) (2,713,139)Profit for the year 10,243,168 4,661,361 8,339,273 6,343,567At end of the yearAt end of the yearAt end of the yearAt end of the yearAt end of the year 14,908,56014,908,56014,908,56014,908,56014,908,560 4,780,189 4,780,189 4,780,189 4,780,189 4,780,189 7,343,127 7,343,127 7,343,127 7,343,127 7,343,127 2,831,967 2,831,967 2,831,967 2,831,967 2,831,967

1919191919 Minority interestMinority interestMinority interestMinority interestMinority interestMovement in minority interests during the year is as follows:At start of the year 151,037 187,425Exchange difference (2,110) (40,440)Minority interest from business combination 1,004,845 -Profit for the year (146,189) 4,052At end of the year 1,007,5831,007,5831,007,5831,007,5831,007,583 151,037 151,037 151,037 151,037 151,037

2020202020 TurnoverTurnoverTurnoverTurnoverTurnoverAnalysis by geographical regionAnalysis by geographical regionAnalysis by geographical regionAnalysis by geographical regionAnalysis by geographical regionWithin Nigeria 244,464,812 848,912 274,310,613 2,677,299Other West African Countries 8,712,379 9,317,760 -Others 83,682,487 3,358,943 55,792,062 4,160,442

336,859,678336,859,678336,859,678336,859,678336,859,678 4,207,855 4,207,855 4,207,855 4,207,855 4,207,855 339,420,435 339,420,435 339,420,435 339,420,435 339,420,435 6,837,741 6,837,741 6,837,741 6,837,741 6,837,741Analysis by product/typeAnalysis by product/typeAnalysis by product/typeAnalysis by product/typeAnalysis by product/typeCrude oil 78,055,148 - 13,890,880 -Fuels 218,668,030 - 294,497,485 -Base oil, lubricants and other products 24,760,352 - 23,121,435 -Gas 11,031,485 - 6,928,345 -Barite, drill bits and oil well cement 383,664 - 548,368Non Fuel Revenue 104,196 - 116,692 -Intragroup dividend - 4,207,855 - 6,837,741Others 3,856,803 - 317,230 -

336,859,678 336,859,678 336,859,678 336,859,678 336,859,678 4,207,855 4,207,855 4,207,855 4,207,855 4,207,855 339,420,435 339,420,435 339,420,435 339,420,435 339,420,435 6,837,741 6,837,741 6,837,741 6,837,741 6,837,7412121212121 Administrative expensesAdministrative expensesAdministrative expensesAdministrative expensesAdministrative expenses

Repairs and maintenance 339,862 32,828 219,134 -Insurance 45,239 - 145,581 -Rent and other hiring costs 1,478,348 298,573 317,945 -Staff costs 4,520,316 252 3,092,217 326,235Depreciation 5,770,461 274,779 1,696,558 218,413Other administrative expenses 5,933,217 860,468 11,949,240 559,356

18,087,443, 18,087,443, 18,087,443, 18,087,443, 18,087,443, 1,466,9001,466,9001,466,9001,466,9001,466,900 17,420,675 17,420,675 17,420,675 17,420,675 17,420,675 1,104,004 1,104,004 1,104,004 1,104,004 1,104,0042222222222 Interest receivedInterest receivedInterest receivedInterest receivedInterest received

This represents interest income accruing from placements with commercial banks.

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2323232323 Other operating incomOther operating incomOther operating incomOther operating incomOther operating incomRent - - 77,459 -Profit on sale of property plant and equipment 77,149 61,852 - -Foreign exchange gain 1,965,346 1,319,327 - -Income on debt purchsae 7,714,302 - - -Other income 1,956,368 578 1,738,985 365,029

11,713,16511,713,16511,713,16511,713,16511,713,165 1,381,7571,381,7571,381,7571,381,7571,381,757 1,816,4441,816,4441,816,4441,816,4441,816,444 365,029365,029365,029365,029365,0292424242424 Interest payable and similar chargesInterest payable and similar chargesInterest payable and similar chargesInterest payable and similar chargesInterest payable and similar charges

Interest on long term loan 3,460,197 - 3,237,949 3,414,240Interest on short term loans and overdrafts 8,285,806 4,222,749 4,885,213 -Exchange loss - - 2,516,884 481,199Total interest on bank loans and overdrafts 11,746,003 4,222,749 10,640,046 3,895,439Accretion charge 79,887 - 27,643 -Total interest payable and similar charges 11,825,89011,825,89011,825,89011,825,89011,825,890 4,222,749 4,222,749 4,222,749 4,222,749 4,222,749 10,667,689 10,667,689 10,667,689 10,667,689 10,667,689 3,895,439 3,895,439 3,895,439 3,895,439 3,895,439

Other interests attributable to borrowings are distributed as follows:(a) Included in cost of sales 7,400,3847,400,3847,400,3847,400,3847,400,384 ----- 3,383,046 3,383,046 3,383,046 3,383,046 3,383,046 - - - - -(b) Capitalised during the year:Included in property, plant and equipment 9,244,453 267,165 3,317,089 -Included in recoverable pipeline construction costs 3,855,845 - 2,465,960 -

13,100,29713,100,29713,100,29713,100,29713,100,297 267,165 267,165 267,165 267,165 267,165 5,783,049 5,783,049 5,783,049 5,783,049 5,783,049 - - - - -25.25.25.25.25. Profit before taxationProfit before taxationProfit before taxationProfit before taxationProfit before taxation

Profit before taxation is stated after charging: - Depreciation, depletion and amortisation of upstream assets 3,463,719 - 4,096,408 -- Depreciation - others 2,306,743 274,779 1,696,558 218,413 - Auditors’ remuneration 135,000 30,000 86,700 24,000 - Directors’ remuneration 520,398 304,077 372,816 189,344 - Foreign exchange loss - - 2,516,884 481,199- Loss on sale of property plant and equipment and after crediting: - - 5,288 - Foreign exchange gain 1,965,346 1,319,327 - -- Profit on sale of property plant and equipment 77,149 61,852 - -

2626262626 TaxationTaxationTaxationTaxationTaxation(a) Per profit and loss accountCharges for the yearIncome tax 5,226,530 153,966 3,815,575 175,419 Education tax 360,557 5,986 292,782 1,488

5,587,0875,587,0875,587,0875,587,0875,587,087 159,952159,952159,952159,952159,952 4,108,357 4,108,357 4,108,357 4,108,357 4,108,357 176,907 176,907 176,907 176,907 176,907Deferred tax (Note 13)Deferred tax (Note 13)Deferred tax (Note 13)Deferred tax (Note 13)Deferred tax (Note 13)Deferred tax non-current asset (1,087,269) (198,917) (1,044,162) -Deferred tax current asset (5,516,752) - (1,179,580) -Deferred tax current liability 486,408 217,691 437,329 -Deferred tax non-current liability 3,945,702 (18,774) 77,343 (8,808)

3,415,176,3,415,176,3,415,176,3,415,176,3,415,176, 159,952159,952159,952159,952159,952 2,399,2862,399,2862,399,2862,399,2862,399,286 168,099 168,099 168,099 168,099 168,099(b) Per balance sheetBalance, 1 January 3,355,327 613,514 1,308,107 1,020,443 Over/(under) provision for taxes - - 44,558 -Payments during the year (5,628,467) (187,106) (2,105,695) (583,836)Charge for the year 5,587,087 159,952 4,108,357 176,907

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Balance, 31 December 3,313,9473,313,9473,313,9473,313,9473,313,947 586,360 586,360 586,360 586,360 586,360 3,355,327 3,355,327 3,355,327 3,355,327 3,355,327 613,514 613,514 613,514 613,514 613,5142727272727 Earnings per shareEarnings per shareEarnings per shareEarnings per shareEarnings per share

BasicBasicBasicBasicBasicBasic earnings per share is calculated by dividing the profit attributable to the equity holders of the Company by the weighted average numberof shares in issue during the year.

DilutedDilutedDilutedDilutedDilutedDiluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of alldilutive potential ordinary shares.

GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany

Profit attributable to equity holders of the Company 10,243,168 4,661,361 8,339,273 6,343,567Weighted average number of shares in issue (thousands) 904,985 904,985 904,885 904,885Basic earnings per share (kobo) 1,132 515 922 701Diluted earnings per share (kobo) 1,132 515 922 701

2828282828 Net cash flow from operating activitiesNet cash flow from operating activitiesNet cash flow from operating activitiesNet cash flow from operating activitiesNet cash flow from operating activitiesbefore changes in working capitalbefore changes in working capitalbefore changes in working capitalbefore changes in working capitalbefore changes in working capital Profit on ordinary activities after taxation 10,096,979 4,661,361 8,343,325 6,343,567Adjustments for non-cash items and interests:- Taxation for the year 3,415,176 159,952 2,399,286 168,099- (Under)/overprovision for income taxes - - (44,558) -- Depreciation, depletion and amortisation 5,770,461 274,779 5,792,966 218,413- (Profit)/ loss on sale of property plant and equipment (77,149) (61,852) 5,288 -- Amortisation of software costs 158,613 149,334 149,333 149,333 -Impairment loss on investments 1,000 3,500 8,000 8,000- Increase/(decrease) in provision for doubtful debts 265,486 (9,159) 47,170 (969,990)- Increase/(decrease) in provision for slow moving and obsolete stocks 207,822 - (130,699) (189,055) Interest expense 11,746,003 4,222,749 10,640,046 3,895,439- Accretion expense 79,887 - 27,643 -- Interest received (3,570,953) (4,921,350) (4,548,759) (4,308,339)

28,093,325 28,093,325 28,093,325 28,093,325 28,093,325 4,479,314 4,479,314 4,479,314 4,479,314 4,479,314 22,689,041 22,689,041 22,689,041 22,689,041 22,689,041 5,315,467 5,315,467 5,315,467 5,315,467 5,315,467

2929292929 Net Increase in working capitalNet Increase in working capitalNet Increase in working capitalNet Increase in working capitalNet Increase in working capital- Decrease/(Increase) in inventories 6,167,707 (7,534) 8,791,390 10,346,439- Increase in debtors and prepayments (3,305,703) (221,504,925) (46,936,823) (90,101,832)- Increase in creditors and accruals 32,892,276 213,969,630 3,833,017 53,105,015- (Increase)/decrease in long term prepayments (290,278) 36,988 (106,127) 274,023- Increase/(decrease) in customers’ security deposits 234,350 - 207,605 (673,734)

Adjusted for: - - Intercompany transfer of assets* - - - 5,674,306- Working capital transferred to Oando Marketing Limited - - - 2,155,968

35,698,352 35,698,352 35,698,352 35,698,352 35,698,352 (7,505,840)(7,505,840)(7,505,840)(7,505,840)(7,505,840) (34,210,938) (34,210,938) (34,210,938) (34,210,938) (34,210,938) (19,219,815)(19,219,815)(19,219,815)(19,219,815)(19,219,815)

*Intercompany transfer of assets relate to land and building (N14.7million) and upstream assets (N5.7billion) transferred to Oando PropertyLimited and Oando Exploration and Production Limited respectively.

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3030303030 Directors and employeesDirectors and employeesDirectors and employeesDirectors and employeesDirectors and employees(a) Directors’ remuneration:The remuneration paid to the directors of the Company was as follows: Fees paid to non executive directors:Chairman 1,000 850 Others 4,350 6,969

5,350 7,819Executive directors’ salaries 146,400 111,233

151,750151,750151,750151,750151,750 119,052119,052119,052119,052119,052Other emoluments 152,327 70,292

304,077304,077304,077304,077304,077 189,344 189,344 189,344 189,344 189,344The directors received emoluments (excluding pensioncontributions) in the following ranges: NumberNumberNumberNumberNumber NumberNumberNumberNumberNumberN5,000,000 - N10,00,000 1 9Above N10,000,000 12 3

1313131313 1212121212

Included in the above analysis is the highest paid director atN66.6 million (2008: N71.3million).(b) Staff cost(b) Staff cost(b) Staff cost(b) Staff cost(b) Staff cost i. Employee costs during the year amounted to:Wages and salaries 3,112,162 - 2,225,373 280,102Employee benefits provision 441,409 - 360,808 -Welfare and training 451,835 - 283,285 -Other staff costs 123,033 - 222,751 46,133

4,128,439 - 3,092,217 326,235Company’s staff costs are subsequently allocated to subsidiarycompanies based on agreed rates.ii. The average number of full-time persons employedby the Company during the year was as follows: NumberNumberNumberNumberNumber NumberNumberNumberNumberNumber NumberNumberNumberNumberNumber NumberNumberNumberNumberNumberExecutive 4 3 - - Management staff 103 25 102 33Senior staff 363 75 322 70Junior staff 7 4 7 4

477477477477477 107107107107107 431 431 431 431 431 107 107 107 107 107 iii. Higher-paid employees of the Company, other than directors,whose duties were wholly or mainly discharged in Nigeria, receivedremuneration (excluding pension contributions) in the following ranges:

NumberNumberNumberNumberNumber NumberNumberNumberNumberNumber NumberNumberNumberNumberNumber NumberNumberNumberNumberNumberN1,000,001 - N1,500,000 6 3 4 4N1,500,001 - N2,000,000 - - 3 -N2,000,001 - N2,500,000 40 24 67 35N2,500,001 - N3,000,000 177 26 97 12N3,000,001 - N3,500,000 76 13 81 14N3,500,001 - N4,000,000 27 3 55 2N4,000,001 - N4,500,000 21 3 22 4N4,500,001 - N5,000,000 14 3 21 3Above N5,000,000 116 32 81 33

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477477477477477 107107107107107 431431431431431 107107107107107December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 2008

GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany3131313131 Capital commitmentsCapital commitmentsCapital commitmentsCapital commitmentsCapital commitments

Outstanding capital expenditure contracted but notprovided for in the accounts 86,196 10,304 1,929,920 -Capital expenditure approved by the Board but notyet committed 62,918,928 9,260,050 23,467,250 10,000,000

63,005,12463,005,12463,005,12463,005,12463,005,124 9,270,3549,270,3549,270,3549,270,3549,270,354 25,397,17025,397,17025,397,17025,397,17025,397,170 10,000,00010,000,00010,000,00010,000,00010,000,0003232323232 Contingent liabilitiesContingent liabilitiesContingent liabilitiesContingent liabilitiesContingent liabilities

(32.1) Pending litigation(32.1) Pending litigation(32.1) Pending litigation(32.1) Pending litigation(32.1) Pending litigationThere are a number of legal suits outstanding against the Company for stated amounts of N1.051billion (2007:N712million). On the advice ofCounsel, the Board of Directors are of the opinion that no material losses are expected to arise. Therefore, no provision has been made in thefinancial statements.

(32.2) Bonds and guarantees(32.2) Bonds and guarantees(32.2) Bonds and guarantees(32.2) Bonds and guarantees(32.2) Bonds and guaranteespayment guarantees issued in favour of the Company amounted to N67.26 billion. The Company also guaranteed loans of N92.96 billion fromcommercial banks on behalf of its subsidiaries.

(32.3) Other claims(32.3) Other claims(32.3) Other claims(32.3) Other claims(32.3) Other claimsIn February 2008, the Federal High Court ruled that Oando Plc should pay N172.42million less 5% of the amount as additional income taxliability including Education tax of N23.28million . The additional assessments relate to the financial year 2003. The Company instituted anappeal at the Federal Court of Appeal. In addition, the Company applied for the February 2008 judgment to be stayed. The Federal High Courtgranted a conditional stay of execution of judgment on the following terms:

• that the judgment sum should be paid to the Chief Registrar of the Federal High Court who shall in turn put same in an interest yieldingaccount; and•that said sum and any accrued interest will be paid to either of the parties who succeeds on the determination of the appeal.

On 8 May 2009, the Company paid an amount of N187.07 million to the Chief Registrar of the Federal High Court. On the basis of legal advicereceived, the Company believes that it will be successful in its appeal and therefore has not made a provision for this payment in these financialstatements.

3333333333 Related party transactionsRelated party transactionsRelated party transactionsRelated party transactionsRelated party transactionsTransactions with affiliates within the Oando GroupTransactions with affiliates within the Oando GroupTransactions with affiliates within the Oando GroupTransactions with affiliates within the Oando GroupTransactions with affiliates within the Oando GroupTransactions relating to the Company’s own financial statements are as follows:

December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 2008Oando Exploration & Production Limited 46,430,841 36,224,659Oando Energy Services Limited 29,205,839 8,836,903Oando Supply & Trading Limited 26,001 1,294,159Oando Lekki Refinery Limited 2,397,329 783,133Oando Gas and Power Limited - 464,642Apapa SPM Limited 483,412 280,195Oando Production & Development Company Limited - 90,930Oando Properties Limited 44,142 58,122Oando Gas and Power Limited - 53,205Gaslink Nigeria Limited 349,009 (26,285)Oando Marketing Limited (14,898,359) (499,905)Oando Trading Bermuda Limited (8,978,440) -Other Companies (12,380) 5,133

55,047,39455,047,39455,047,39455,047,39455,047,394 47,564,891 47,564,891 47,564,891 47,564,891 47,564,891

The Company provided funding to finance several projects on behalf of Oando Exploration and Production Limited, Oando Energy ServicesLimited and Oando Lekki Refinery Limited during the period. Interest costs on such funds are charged to the entity based on actual interest

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rates plus a margin when the funding is financed by borrowings. Amounts (including intra-group profits) have been eliminated on consolida-tion.Payables to Oando Trading Bermuda relates to part funding for the consideration paid on the acquisition of Equator Exploration Limited.

Payables to Oando Marketing Limited were in respect of payments such as interest costs, staff expenses and other expenses made on behalfof the Company.

Transactions with affiliates outside the Oando GroupTransactions with affiliates outside the Oando GroupTransactions with affiliates outside the Oando GroupTransactions with affiliates outside the Oando GroupTransactions with affiliates outside the Oando GroupDuring the year, transactions were conducted between Oando Plc and other affiliate companies. These include:

(a).Ocean and Oil Investment received N923 million in respect of dividend declared at the end of 2008 (2007:N3.169 billion)(b).Ocean and Oil Holdings Nigeria Limited is entitled to N1.35 billion (2008:N994 million) for technical and management services rendered.(c).Avante Property and Asset Management Limited, a subsidiary of Ocean and Oil Holdings received N95.98 million (2008: N98.6 million) forprofessional services rendered during the year.(d).Avazion consulting, a subsidiary of Ocean and Oil Holdings received N301.467 million for providing personnel services to Oando EnergyServices Limited.

The amount payable relating to these affiliates at the balance sheet date amounted to:December 2009December 2009December 2009December 2009December 2009 December 2008 December 2008 December 2008 December 2008 December 2008

Ocean and Oil Holdings Nigeria Limited 962,935 369,951Avante Property 14,654 -

977,589 369,951Transactions with DirectorsTransactions with DirectorsTransactions with DirectorsTransactions with DirectorsTransactions with DirectorsThe total advances to Executive directors as at 31 December 2009 was N110.2 million

Core investorCore investorCore investorCore investorCore investorOcean and Oil Investments (Nigeria) Limited, a special purpose entity set up for the purpose of acquiring significant interest in the thenUnipetrol owned 24.67% of Oando Plc’s shares at the balance sheet date (2008:34%). Ocean and Oil Investments is owned by Ocean and OilMauritius. Ocean and Oil Mauritius is owned by Ocean and Oil Holdings (BVI) Limited.

In addition, four of the Company’s Directors are also directors of OOH; namely Mr. Tinubu, Mr. Okoloko, Mr. Boyo and Mr. Ibru. Mr. Tinubu, Mr.Okoloko and Mr. Boyo are also shareholders of OOH.

3434343434 Technical and management service agreementTechnical and management service agreementTechnical and management service agreementTechnical and management service agreementTechnical and management service agreementThe Company is a party to subsisting agreements in respect of technical know-how, marketing, management expertise, strategic planning andconsultancy services assistance. These agreements are between the Company and Ocean and Oil Holdings Limited.The terms of the agree-ments include payment of Technical and Management Service fees of 4% and 3% respectively of the Company’s net profit before taxation,where net profit before tax is under N2 billion (or 5% and 4% where net profit before tax is over N2 billion). A total provision of N1.2bn(2008:N944million) has been made in respect of the Technical and Management Service fees for the year and included in administrativeexpenses disclosed in the financial statements.

3535353535 Post balance sheet eventsPost balance sheet eventsPost balance sheet eventsPost balance sheet eventsPost balance sheet events35.1On 25 January 2010, the Company issued 301,694,876 ordinary shares of 50 Kobo each at a subscription price of N70 per share by wayof rights issue, on the basis of one new ordinary share of the Company of 50 Kobo each for each three ordinary shares of the Company of 50Kobo each held (i) by shareholders in Nigeria whose names appeared on the Register of Members and transfer books of the Company as at theclose of business on 18 December 2009; and (ii) by shareholders in South Africa whose names appeared on the Register of Members andtransfer books of the Company as at the close of business on 29 January 2010. The net proceeds of N20.437 billion, after deducting the totalcost of the offer, would be used by the Group for the repayment of debt (73%), operational capital development and upstream business (19%)and as working capital (8%).

35.2Akute Power Limited, a subsidiary of Oando Plc, commissioned the 12.15MW Independent Power Plant (IPP) constructed to supplyelectricity to Lagos State Water Corporation (LSWC) waterworks on 4 March, 2010.

35.3The Group is in the process of obtaining a N60 billion syndicated medium-term loan facility for the purpose of refinancing its existing short-

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term liabilities into medium-term liabilities.3636363636 Subsidiary informationSubsidiary informationSubsidiary informationSubsidiary informationSubsidiary information

Entity nameEntity nameEntity nameEntity nameEntity name Country ofCountry ofCountry ofCountry ofCountry of Nature of businessNature of businessNature of businessNature of businessNature of business Issued share capitalIssued share capitalIssued share capitalIssued share capitalIssued share capital PercentagePercentagePercentagePercentagePercentageincorporationincorporationincorporationincorporationincorporation interest heldinterest heldinterest heldinterest heldinterest held

Akute Power Limited Nigeria Power generation 2,500 100%Apapa SPM Limited Nigeria Off shore submarine pipeline construction 19,125 100%East Horizon Gas Co. Ltd Nigeria Gas distribution 10,000 100%Gaslink Benin Limited Nigeria Gas distribution 2,618 100%Gaslink Nigeria Limited Nigeria Gas distribution 1,717,698 96.98%Oando Akepo Limited Nigeria Exploration and production 2,500 100%Oando Benin Limited Benin Marketing and sale of petroleum products 14,832 100%Oando Energy Services Limited Nigeria rovision of drilling and other services 5,000 100%

to upstream companiesOando Exploration & Production Limited. Nigeria Exploration and production 5,000 100%Oando Gas and Power Limited Nigeria Gas and power generation and distribution 1,000 100%Oando Ghana Limited Ghana Marketing and sale of petroleum products 126,575 82.9%

(Subsidiary of Oando Marketing Limited)Oando Lekki Refinery Limited Nigeria Petroleum refining 2,500 100%Oando Marketing Limited Nigeria Marketing and sale of petroleum products 175,000 100%Oando Port Harcourt Refinery Limited Nigeria Petroleum refining 2,500 100%Oando Production and Nigeria Exploration and production 10,000 100%Development Company LimitedOando Properties Limited Nigeria Property management services 250 100%Oando respect Limited British Virgin Island Provision of drilling and other services to - 100%

upstream companiesOando Teamwork XII Limited British Virgin Island Provision of drilling and other services to - 100%

upstream companiesUnipetrol Sierra Leone Limited Sierra Leone Marketing and sale of petroleum products 10,079 80%

(Subsidiary of Oando Marketing Limited)Oando Supply and Trading Limited Nigeria Supply of crude oil and refined 5,000 100%

petroleum productsOando Terminals and Logistics Nigeria Storage and haulage of petroleum products 10,000 100%Oando Togo SA Togo Marketing and sale of petroleum products 186,288 75%

(Subsidiary of Oando Marketing Limited)Oando Trading Limited Bermuda Supply of crude oil and refined petroleum 1,518 100%

productsOando Liberia Liberia Marketing and sale of petroleum products 6,538 100%

(Subsidiary of Oando Marketing Limited)OML Integrity Limited British Virgin Island Provision of drilling and other services to 6,538 100%

upstream companiesOando OML 125 & 134 BVI Limited British Virgin Island Exploration and production (100% owned 15,090,093 100%

by Oando Exploration and Production Limited)Oando OML 125 & 134 Limited Nigeria Exploration and production 2,500 100%

(100% owned by OML 125 & 134 BVI)Transgas Nigeria Gas distribution (100% owned by Gaslink) 8,077 100%UNITAB Nigeria Limited Nigeria Marketing of automobile parts (Subsidiary 40,000 51%

of Oando Marketing Limited)Equator Exploration Limited (EEL) British Virgin Islands Exploration and production 67,707,210 78.1%Aqua Exploration Limited Bahamas Exploration and production 14,760 78.1%

(100% subsidiary of EEL)Equator Exploration Nigeria Limited Nigeria Exploration and production 10,000 78.1%

(100% subsidiary of EEL)Equator Exploration (OML 122) Limited British Virgin Islands Exploration and production 148 78.1%

N’000N’000N’000N’000N’000

83

(100% subsidiary of EEL)Entity nameEntity nameEntity nameEntity nameEntity name Country ofCountry ofCountry ofCountry ofCountry of Nature of businessNature of businessNature of businessNature of businessNature of business Issued share capitalIssued share capitalIssued share capitalIssued share capitalIssued share capital PercentagePercentagePercentagePercentagePercentage

incorporationincorporationincorporationincorporationincorporation interest heldinterest heldinterest heldinterest heldinterest heldEquator Exploration 321 Limited Nigeria Exploration and production 10,000 78.1%

(100% subsidiary of EEL)Equator Exploration 323 Limited Nigeria Exploration and production 10,000 78.1%

(100% subsidiary of EEL)Equator Exploration JDZ Block 2 Limited Nigeria Exploration and production 10,000 78.1%

(100% subsidiary of EEL)Equator Exploration Congo Limited British Virgin Islands Exploration and production 148 78.1%

(100% subsidiary of EEL)Equator Exploration Nigeria OML 122 Limited Nigeria Exploration and production 10,000 78.1%

(100% subsidiary of EEL)

3737373737 Upstream activitiesUpstream activitiesUpstream activitiesUpstream activitiesUpstream activities(37.1) Details of upstream assets(37.1) Details of upstream assets(37.1) Details of upstream assets(37.1) Details of upstream assets(37.1) Details of upstream assets

Mineral rightsMineral rightsMineral rightsMineral rightsMineral rights Land andLand andLand andLand andLand and Expl. costsExpl. costsExpl. costsExpl. costsExpl. costs CapitalCapitalCapitalCapitalCapital MoveableMoveableMoveableMoveableMoveable AbandonmentAbandonmentAbandonmentAbandonmentAbandonment and and and and and

acquisitionacquisitionacquisitionacquisitionacquisition buildingbuildingbuildingbuildingbuilding producingproducingproducingproducingproducing constructionconstructionconstructionconstructionconstruction assetsassetsassetsassetsassets assetassetassetassetasset TotalTotalTotalTotalTotalwellswellswellswellswells

CostCostCostCostCostAs at 1 January 29,900,543 23,750 13,484,650 5,246,398 125,422 783,995 49,564,758Transfers/reclassificationAdditions 6,809,286 4,503,509 2,180,751 140,197 173,865 13,807,608Assets acquired from Equator 28,397,032 28,397,032Disposals (56,003) - (238,346) (294,349)Signature bonus refunded (23,735,950) (23,735,950)Exchange differences 3,632,039 3,632,039As at 31 December 16,549,91516,549,91516,549,91516,549,91516,549,915 23,75023,75023,75023,75023,750 46,146,84546,146,84546,146,84546,146,84546,146,845 7,427,1487,427,1487,427,1487,427,1487,427,148 265,619 265,619 265,619 265,619 265,619 957,860 957,860 957,860 957,860 957,860 71,371,138 71,371,138 71,371,138 71,371,138 71,371,138

Depreciation / AmortisationDepreciation / AmortisationDepreciation / AmortisationDepreciation / AmortisationDepreciation / AmortisationAs at 1 January 1,548,814 - 1,571,802 953,366 22,426 - 4,096,408Charge for the period 985,853 56 1,303,954 999,310 42,809 131,737 3,463,719Disposals -Exchange differences (341,249) - - - - - (341,249)

As at 31 DecemberAs at 31 DecemberAs at 31 DecemberAs at 31 DecemberAs at 31 December 2,193,4182,193,4182,193,4182,193,4182,193,418 5656565656 2,875,7562,875,7562,875,7562,875,7562,875,756 1,952,6761,952,6761,952,6761,952,6761,952,676 65,235 65,235 65,235 65,235 65,235 131,737 131,737 131,737 131,737 131,737 7,218,878 7,218,878 7,218,878 7,218,878 7,218,878Net Book ValueNet Book ValueNet Book ValueNet Book ValueNet Book ValueAs at 31 December 2009As at 31 December 2009As at 31 December 2009As at 31 December 2009As at 31 December 2009 14,356,49714,356,49714,356,49714,356,49714,356,497 23,694 23,694 23,694 23,694 23,694 43,271,08943,271,08943,271,08943,271,08943,271,089 5,474,4725,474,4725,474,4725,474,4725,474,472 200,384200,384200,384200,384200,384 826,123 826,123 826,123 826,123 826,123 64,152,260 64,152,260 64,152,260 64,152,260 64,152,260As at 31 December 2008As at 31 December 2008As at 31 December 2008As at 31 December 2008As at 31 December 2008 28,351,72928,351,72928,351,72928,351,72928,351,729 23,75023,75023,75023,75023,750 11,912,84811,912,84811,912,84811,912,84811,912,848 4,293,0314,293,0314,293,0314,293,0314,293,031 102,997102,997102,997102,997102,997 783,995 783,995 783,995 783,995 783,995 45,468,35045,468,35045,468,35045,468,35045,468,350

The Group acquired an undivided 15% interest in Oil Mining Leases (OMLs) 125 and 134 with effect from 1 July 2007. The OML 125 iscurrently in production, while further appraisal and development activities are ongoing in respect of OML 134. The Group’s share of theacquired assets and mineral rights acquisition costs are included as upstream assets.

On June 2009, the Group acquired 78.1% equity interest in Equator Exploration Limited. The assets of Equator are included as upstreamassets. See note 38.

As disclosed in note 14, the total recorded liability for restoration and abandonment was approximately N1.109 billion.

The Group’s share of total proved developed and undeveloped reserves in its various concessions (excluding additions arising from Equatoracquisition during the year) were 13.976 million and 5.736 million (2008: 12.3 million and 7.8 million) barrels of oil equivalent respectively.Based on impairment tests performed in respect of the various concessions as of the balance sheet date no impairment loss was recognised.

Supplementary data, including the standardised measure of oil and gas activities are presented in line with Statement of Accounting Standard

N’000N’000N’000N’000N’000

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No. 14 in the relevant subsidiaries’ financial statements.(37.2) Details of concessions(37.2) Details of concessions(37.2) Details of concessions(37.2) Details of concessions(37.2) Details of concessions

SubsidiarySubsidiarySubsidiarySubsidiarySubsidiary LicenseLicenseLicenseLicenseLicense OperatorOperatorOperatorOperatorOperator NatureNatureNatureNatureNature LocationLocationLocationLocationLocation LicenceLicenceLicenceLicenceLicence ExpirationExpirationExpirationExpirationExpiration StatusStatusStatusStatusStatusDateDateDateDateDate

Oando OML 125 & OML 125 NAE 15% working interest in Offshore PSC 04/07/2023 Producing134 Ltd OML 125 & 134Oando OML 125 & OML 134 NAE 15% working interest in Offshore PSC 04/07/2023 Appraisal134 Ltd OML 125 & 134Oando Petroleum OML 56 Energia/ 45% participatory interest Onshore JV 31/01/2023 ProducingDevelopment Company Ltd Pillar OilOando Exploration And OPL 236 OEPL 95% working interest Onshore PSC 31/03/2013 DevelopmentProduction Ltd / AppraisalOando Exploration And OPL 278 OEPL 60% working interest Onshore PSC 31/01/2011 ExplorationProduction LtdOando Akepo Limited OML 90 Sogenal 30% participatory interest Offshore JV 31/03/2009 DevelopmentOPL 282 Limited OPL 282 NAOC 4% working interest Onshore PSC 31/08/2011 ExplorationEquator Exploration JDZ Block 2 Sinopec 9% non operator participating Offshore PSC 13/03/2034 Appraisal/JDZ Block 2 Limited interest ExplorationEquator Exploration OML 122 Peak Finance & service agreement Offshore PSC 13/09/2021 Development/(OML 122) Limited with operator AppraisalEquator Exploration OPL 323 KNOC 30% non operator partcipating Offshore PSC 10/03/2006 ExplorationNigeria 323 Limited interestEquator Exploration OPL 321 KNOC 30% non operator partcipating Offshore PSC 10/03/2006 ExplorationNigeria 321 Limited interestAqua Exploration Ltd. Allocation - Allocation letter with rights Offshore PSC - Exploration

letter for to enter into a PSCBlock 5

Aqua Exploration Ltd. Allocation - Allocation letter with rights Offshore PSC - Explorationletter for to enter into a PSCBlock 12

3838383838 Business combinationBusiness combinationBusiness combinationBusiness combinationBusiness combinationIn July 2009, the Group acquired 53.45% of the share capital of Equator Exploration Limited (EEL), a company engaged in the exploration anddevelopment of oil and gas projects in the Gulf of Guinea and West Africa. The purchase consideration relating to the acquisition of the initialcontrolling interest was N5.202 billion . At that date the fair value of the net assets and liabilities of EEL was N3.734 billion and consequentlygoodwill of N 1,468 billion was recognised. In September 2009, the Group acquired a further 24.65% of the share capital of EEL for N2.146billion . The carrying amount of the net assets at the acquisition date was N1.862 billion which resulted in goodwill of N284 million . Theconsideration for these acquisitions were in cash.

The acquisition is in line with the Oando’s drive towards creating long term shareholder value through the profitable operation and expansionof its integrated oil and gas business.

The acquired business contributed a net loss of N435 million to the Group for the period from 30 June 2009 to 31 December 2009. If theacquisition had occurred on 1 January 2009, consolidated loss for the 6 months ended June 30 2009 would have been N1.443 billion. Theseamounts have been calculated using the Group’s accounting policies.

Details of net assets acquired and goodwill are as follows:Purchase consideration:Cash paid 6,415,341Direct costs relating to the acquisition 932,612Total purchase consideration 7,347,953Net assets acquired (see below) (5,595,934)Goodwill (1,752,019)

N’000N’000N’000N’000N’000

85

The goodwill is attributable to the acquired rights in the prospective oil and gas reserves of the respective assets.The assets and liabilities as of 30 June 2009 arising from the acquisition of controlling 53.45% interest are as follows:

Book valueBook valueBook valueBook valueBook value Fair valueFair valueFair valueFair valueFair value Fair valueFair valueFair valueFair valueFair value adjustment adjustment adjustment adjustment adjustment

Oil and gas assets 33,183,540 (4,786,508) 28,397,032Intangible asset 25,594 - 25,594Trade and other receivables 90,675 - 90,675Borrowings (16,246,766) 418,396 (15,828,370)Cash and cash equivalent 387,563 - 387,563Trade and other payables (5,760,056) - (5,760,056)Contingent liability - (325,406) (325,406)

11,680,55011,680,55011,680,55011,680,55011,680,550 (4,693,518) (4,693,518) (4,693,518) (4,693,518) (4,693,518) 6,987,0326,987,0326,987,0326,987,0326,987,032Fair value of net assets acquired at 53.45% 3,734,314Total consideration (5,201,993)Goodwill (1,467,679)

The fair values of the oil and gas assets as at the acquisition dates were determined based on the enterprise value of proved and probablereserves (EV/2P) of oil and gas assets.

The contingent liabilities assumed relate to several liabilities totalling N3.2 billion incurred by the joint operating partner on one of Equators’assets. Management has considered the probabilities underlying the contingent liabilities in determining the fair values of the contingentliabilities at acquisition date.

Deferred tax assets of N1.5 billion arising from the fair value adjustment to the carrying amount of net assets acquired have not been recogniseddue to historical losses incurred by EEL, as a result of which it is not probable that taxable profits will be generated in the foreseeable futureagainst which the temporary differences can be utilised.

The assets and liabilities as of 30 September 2009 arising from the acquisition of a further 24.65% interest are as follows:

Carrying amountCarrying amountCarrying amountCarrying amountCarrying amountOil and gas assets 4,771,758Intangible asset 25,724rade and other receivables 91,028Cash and cash equivalent 5,546,566Trade and other payables (2,734,669)Contingent liability (326,675)Net assets 7,373,732Carrying amount of net assets acquired at 24.65% 1,817,625Exchange difference 43,995Carrying amount of net assets acquired 1,861,620Total consideration (2,145,960)Goodwill (284,340)

Reduction in the carrying amounts of oil and gas assets from acquisition date is as a result of the refund of signature bonus by the Governmentof Nigeria in relation to the Nigeria licences known as OPL 321 and 323.

The outflow of cash and cash equivalent on the acquisition is calculated as follows:

Cash consideration 7,347,953Cash acquired (387,563)

6,960,3903939393939 Reclassification of prior year balancesReclassification of prior year balancesReclassification of prior year balancesReclassification of prior year balancesReclassification of prior year balances

Certain prior year balances have been reclassified to conform with current year presentation format.

N’000N’000N’000N’000N’000

86

31 Dec 0931 Dec 0931 Dec 0931 Dec 0931 Dec 09 31 Dec 0831 Dec 0831 Dec 0831 Dec 0831 Dec 08GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompany GroupGroupGroupGroupGroup CompanyCompanyCompanyCompanyCompanyN’000N’000N’000N’000N’000 %%%%% N’000N’000N’000N’000N’000 %%%%% N’000N’000N’000N’000N’000 %%%%% N’000N’000N’000N’000N’000 %%%%%

Turnover 336,859,678 4,207,855 339,420,435 6,837,741Other income 11,713,165 1,381,757 1,816,444 365,029Interest received 3,570,953 4,921,350 4,548,759 4,308,339

352,143,796 10,510,961 345,785,638 11,511,109Bought-in materials and services - Local purchases (132,217,250) 1,502,245 (255,607,646) (559,356) - Foreign purchases (175,858,849) - (59,882,508) -

Value addedValue addedValue addedValue addedValue added 44,067,69644,067,69644,067,69644,067,69644,067,696 100100100100100 12,013,20612,013,20612,013,20612,013,20612,013,206 100100100100100 30,295,48430,295,48430,295,48430,295,48430,295,484 100100100100100 10,951,75310,951,75310,951,75310,951,75310,951,753 100100100100100

Distributed as follows:Distributed as follows:Distributed as follows:Distributed as follows:Distributed as follows:Employees:Employees:Employees:Employees:Employees:- To pay salaries, wagesand other staff costs 4,128,439 9 - 0 3,092,217 10 326,235 3

Government:Government:Government:Government:Government:- To pay tax

5,587,087 13 159,952 1 4,108,357 14 176,907 2Providers of capital:Providers of capital:Providers of capital:Providers of capital:Providers of capital:- To pay dividend 2,713,139 6 2,713,139 23 2,715,102 9 2,715,102 25- To pay interest on borrowings 11,825,890 27 4,222,749 35 10,667,689 35 3,895,439 36Minority interests (146,189) - - 4,052 -

Maintenance and expansion of assets:Maintenance and expansion of assets:Maintenance and expansion of assets:Maintenance and expansion of assets:Maintenance and expansion of assets:- Deferred tax 3,945,702 9 (18,774) (0) (1,709,071) (6) (8,808) (0)- Depreciation 5,770,461 13 274,779 2 5,792,966 19 218,413 2- Retained in the business 10,243,168 23 4,661,361 39 5,624,172 19 3,628,465 33

Value distributedValue distributedValue distributedValue distributedValue distributed 44,067,69644,067,69644,067,69644,067,69644,067,696 100100100100100 12,013,20612,013,20612,013,20612,013,20612,013,206 100100100100100 30,295,48430,295,48430,295,48430,295,48430,295,484 100100100100100 10,951,75310,951,75310,951,75310,951,75310,951,753 100100100100100

STATEMENT OF VALUE ADDED FOR THE YEAR ENDEDSTATEMENT OF VALUE ADDED FOR THE YEAR ENDEDSTATEMENT OF VALUE ADDED FOR THE YEAR ENDEDSTATEMENT OF VALUE ADDED FOR THE YEAR ENDEDSTATEMENT OF VALUE ADDED FOR THE YEAR ENDED N’000N’000N’000N’000N’000

87

GroupGroupGroupGroupGroup 20092009200920092009 20082008200820082008 20072007200720072007 20062006200620062006 20052005200520052005

Balance SheetBalance SheetBalance SheetBalance SheetBalance Sheet

Property plant and equipment 131,713,072 89,903,189 40,318,614 14,396,003 13,689,809Intangible assets 23,969,748 22,350,513 22,464,771 14,514,551 13,600,875Investment in associatesLong term Investments 1,000 2,000 10,000 10,000 -Deferred tax asset 1,943,849 1,044,162 - - -Long term receivable 18,783,390 14,544,777 11,138,446 4,612,042 3,573,468Net current assets/(liabilities) (87,152,875) (31,450,625) (6,601,994) (5,680,925) (4,483,890)Non current borrowings and other non-current liabilities (22,415,936) (42,795,571) (18,457,205) (2,257,844) (2,735,899)Deferred taxation (11,928,511) (7,482,795) (889,405) (687,224) (638,790)Retirement benefit obligation - - (141,671) (138,254) (279,782)Provision for other liabilities & charges (1,594,613) (1,236,917) (425,279) (372,079) -

Net assetsNet assetsNet assetsNet assetsNet assets 53,319,12453,319,12453,319,12453,319,12453,319,124 44,878,733 44,878,733 44,878,733 44,878,733 44,878,733 47,416,277 47,416,277 47,416,277 47,416,277 47,416,277 24,396,270 24,396,270 24,396,270 24,396,270 24,396,270 22,725,791 22,725,791 22,725,791 22,725,791 22,725,791

Share capital 452,542 452,442 377,035 286,150 286,150Share premium 29,735,182 29,716,870 29,877,741 15,980,263 15,980,263Revaluation reserve 7,215,257 7,215,257 10,652,936 2,423,923 2,423,923Retained earnings 14,908,560 7,343,127 6,321,140 3,853,399 2,607,931Minority interest 1,007,583 151,037 187,425 1,825,535 1,427,524

Total equityTotal equityTotal equityTotal equityTotal equity 53,319,124 53,319,124 53,319,124 53,319,124 53,319,124 44,878,73344,878,73344,878,73344,878,73344,878,733 47,416,27747,416,27747,416,27747,416,27747,416,277 24,369,270 24,369,270 24,369,270 24,369,270 24,369,270 22,725,791 22,725,791 22,725,791 22,725,791 22,725,791

Profit and loss account

Turnover 336,859,678 339,420,435 185,892,083 209,078,938 182,763,434

Profit/(loss) before taxation 13,512,155 10,742,611 6,813,728 3,794,091 2,621,139

Taxation (3,415,176) (2,399,286) (1,333,313) (719,023) (847,496)

Profit after taxation 10,096,979 8,343,325 5,480,415 3,075,068 1,773,643

Dividend* 2,713,139 7,242,056 2,289,203 1,430,752 1,144,602

Per share data

Weighted average number of shares 904,885 904,885 632,891 572,301 572,301Potential ordinary shares - - - - -Basic earnings per share (kobo) 1,132 922 751 411 265Diluted earnings per share 1,132 922 751 411 265Dividends per share (kobo) 300 600 362 250 200Net assets per share (kobo) 5,892 4,960 7,492 4,258 3,971Dividend cover 3.72 times 1.15 times 2.07 times 1.64 times 1.32 times

Note: Earnings, dividend and net assets per share are based on the weighted average number of shares in issue for the year. After tax profits havebeen used as numerators for computing earnings per share.

* Dividends are disclosed in the years declared at the Annual General Meeting.

FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009) N’000N’000N’000N’000N’000

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CompanyCompanyCompanyCompanyCompany 20092009200920092009 20082008200820082008 20072007200720072007 20062006200620062006 20052005200520052005

Balance SheetBalance SheetBalance SheetBalance SheetBalance Sheet

Property plant and equipment 8,910,979 1,539,035 26,039,055 13,788,755 13,149,388Intangible assets 448,000 597,334 9,699,814 13,445,903 12,501,645Long term Investments 39,471,680 32,131,055 16,844,848 2,080,320 1,755,153Deferred tax asset 198,917 - -Long term receivable 7,380 44,368 318,391 326,654 60,346Net current assets/(liabilities) (13,539,917) 25,199,816 1,827,053 (5,323,998) (3,925,513)Non current borrowings and other non-current liabilities - (25,382,404) (9,024,571) (1,403,261) (1,449,796)Deferred taxation (311,885) (910,683) (849,344) (662,199) (620,446)Retirement benefit obligation - - (141,671) (138,254) (279,782)

Net assetsNet assetsNet assetsNet assetsNet assets 35,185,15435,185,15435,185,15435,185,15435,185,154 33,218,521 33,218,521 33,218,521 33,218,521 33,218,521 44,713,575 44,713,575 44,713,575 44,713,575 44,713,575 22,113,920 22,113,920 22,113,920 22,113,920 22,113,920 21,190,995 21,190,995 21,190,995 21,190,995 21,190,995

Share capital 452,542 452,442 377,035 286,150 286,150Share premium 29,735,182 29,716,870 29,877,741 15,980,263 15,980,263Revaluation reserve 217,242 217,242 10,652,936 2,423,923 2,423,923Retained earnings 4,780,188 2,831,967 3,805,863 3,423,584 2,500,659

Total equityTotal equityTotal equityTotal equityTotal equity 35,185,154 35,185,154 35,185,154 35,185,154 35,185,154 33,218,521 33,218,521 33,218,521 33,218,521 33,218,521 44,713,575 44,713,575 44,713,575 44,713,575 44,713,575 22,113,920 22,113,920 22,113,920 22,113,920 22,113,920 21,190,995 21,190,995 21,190,995 21,190,995 21,190,995

Profit and loss accountProfit and loss accountProfit and loss accountProfit and loss accountProfit and loss account

Turnover 4,207,855 6,837,741 131,007,169 132,397,373 121,591,635

Profit/(loss) before taxation 4,821,313 6,511,666 3,717,196 2,855,591 2,102,921

Taxation (159,952) (168,099) (1,045,714) (501,914) (727,117)

Profit after taxationProfit after taxationProfit after taxationProfit after taxationProfit after taxation 4,661,361 4,661,361 4,661,361 4,661,361 4,661,361 6,343,5676,343,5676,343,5676,343,5676,343,567 2,671,482 2,671,482 2,671,482 2,671,482 2,671,482 2,353,677 2,353,677 2,353,677 2,353,677 2,353,677 1,375,804 1,375,804 1,375,804 1,375,804 1,375,804

Dividend* 2,713,139 7,242,056 2,289,203 1,430,752 1,144,602

Per share data

Weighted average number of shares 904,885 904,885 632,891 572,301 572,301Basic earnings per share (kobo) 515 701 422 411 240Diluted earnings per share 515 701 422 411 240Dividends per share (kobo) 300 600 400 250 312Net assets per share (kobo) 3,888 2,671 7,065 3,864 3,703Dividend cover 1.72 times 0.87 times 1.17 times 1.65 times 1.20 times

* Dividends are disclosed in the years declared at the Annual General Meeting. Dividend is based on 2008 results declared in the current year.

FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009)FIVE-YEAR FINANCIAL SUMMARY (2005 - 2009) N’000N’000N’000N’000N’000

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STATEMENT OF UNCLAIMED/ RETURNED DIVIDEND WARRANTS

OANDO UNCLAIMED DIVIDEND AS AT 31ST DECEMBER, 2009OANDO UNCLAIMED DIVIDEND AS AT 31ST DECEMBER, 2009OANDO UNCLAIMED DIVIDEND AS AT 31ST DECEMBER, 2009OANDO UNCLAIMED DIVIDEND AS AT 31ST DECEMBER, 2009OANDO UNCLAIMED DIVIDEND AS AT 31ST DECEMBER, 2009

PAYT.PAYT.PAYT.PAYT.PAYT. BAL. AS 31/12/2008BAL. AS 31/12/2008BAL. AS 31/12/2008BAL. AS 31/12/2008BAL. AS 31/12/2008 UNCLAIMED DIVUNCLAIMED DIVUNCLAIMED DIVUNCLAIMED DIVUNCLAIMED DIV PAYABLE DATEPAYABLE DATEPAYABLE DATEPAYABLE DATEPAYABLE DATENO.NO.NO.NO.NO. AS AT 31/12/2009AS AT 31/12/2009AS AT 31/12/2009AS AT 31/12/2009AS AT 31/12/20098 5,027,632.82 2,794,186.54 16/12/19999 6,118,105.10 4,777,270.56 06/03/200010 9,802,386.72 6,936,544.22 14/09/200011 30,821,654.78 23,353,496.08 21/06/200112 30,938,387.38 17,952,073.70 31/07/200213 59,547,480.00 37,513,460.16 25/06/200414 109,763,789.60 74,458,890.70 28/06/200515 111,979,375.50 88,937,218.30 01/06/200616 310,802,570.80 265,266,260.14 29/06/200717 4,524,423,138.00 337,998,123.00 30/05/200818 2,714,653,884.00 188,315,814.60 30/09/2008TOTALTOTALTOTALTOTALTOTAL 674,801,382.70674,801,382.70674,801,382.70674,801,382.70674,801,382.70 1,048,303,338.00 1,048,303,338.00 1,048,303,338.00 1,048,303,338.00 1,048,303,338.00

EX- AGIP PRE MERGER UNCLAIMED DIVIDEND AS AT 31ST DECEMBER 2009EX- AGIP PRE MERGER UNCLAIMED DIVIDEND AS AT 31ST DECEMBER 2009EX- AGIP PRE MERGER UNCLAIMED DIVIDEND AS AT 31ST DECEMBER 2009EX- AGIP PRE MERGER UNCLAIMED DIVIDEND AS AT 31ST DECEMBER 2009EX- AGIP PRE MERGER UNCLAIMED DIVIDEND AS AT 31ST DECEMBER 2009

PAYT NIO.PAYT NIO.PAYT NIO.PAYT NIO.PAYT NIO. BAL. AS AT 31/12/2008BAL. AS AT 31/12/2008BAL. AS AT 31/12/2008BAL. AS AT 31/12/2008BAL. AS AT 31/12/2008 UNCLAIMED DIVUNCLAIMED DIVUNCLAIMED DIVUNCLAIMED DIVUNCLAIMED DIV PAYABLE DATEPAYABLE DATEPAYABLE DATEPAYABLE DATEPAYABLE DATEAS AT 31/12/2009AS AT 31/12/2009AS AT 31/12/2009AS AT 31/12/2009AS AT 31/12/2009

20 1,442,339.17 1,081,754.38 25/05/199821 2,656,042.28 2,018,592.13 26/04/199922 7,370,137.90 4,790,589.64 03/05/200023 4,939,103.21 3,358,590.18 30/10/200024 19,805,076.78 11,486,944.53 25/04/200125 7,009,194.89 4,345,700.83 25/09/200126 20,735,358.27 13,477,982.88 30/04/2002TOTALTOTALTOTALTOTALTOTAL 63,957,252.50 63,957,252.50 63,957,252.50 63,957,252.50 63,957,252.50 40,560,154.57 40,560,154.57 40,560,154.57 40,560,154.57 40,560,154.57

SHARE CAPITAL HISTORYSHARE CAPITAL HISTORYSHARE CAPITAL HISTORYSHARE CAPITAL HISTORYSHARE CAPITAL HISTORY

DateDateDateDateDate Authorized (N’000)Authorized (N’000)Authorized (N’000)Authorized (N’000)Authorized (N’000) Issued and fully paid (N’000)Issued and fully paid (N’000)Issued and fully paid (N’000)Issued and fully paid (N’000)Issued and fully paid (N’000)ConsiderationConsiderationConsiderationConsiderationConsiderationIncreaseIncreaseIncreaseIncreaseIncrease CumulativeCumulativeCumulativeCumulativeCumulative IncreaseIncreaseIncreaseIncreaseIncrease CumulativeCumulativeCumulativeCumulativeCumulative

1969 0 4,000 0 4,000 Cash1978 3,000 7,000 2,100 6,100 Cash1987 43,000 50,000 33,900 40,000 Cash1991 10,000 60,000 0 40,000 -1993 40,000 100,000 10,000 50,000 Bonus (1:4)1995 0 100,000 12,500 62,500 Cash1998 0 100,000 15,625 78,125 Bonus (1:4)1999 0 100,000 0 78,125 -2000 0 100,000 0 78,125 -2001 50,000 150,000 0 78,125 -2002 150,000 300,000 70,129 148,254 Scrip, ICLS and Agip Conversion2002 0 300,000 14,825 163,079 Bonus (1:4)2003 0 300,000 40,770 203,849 Bonus (1:4)2004 0 300,000 82,301 286,150 Cash2005 100,000 400,000 0 286,150 -2007 100,000 500,000 90,885 377,035 Scheme of Arrangement – OOI and

12 identified Shareholders of Gaslink2008 500,000 75,407 452,442 Bonus issue (1:5)2009 0 500,000 100,000 452,542 Staff Share Scheme2009 500,000 1,000,000 0 452,542 -

N’000N’000N’000N’000N’000

91

The 33rd Annual General Meeting of Oando PLC (the “Company”) will be held at The Landmark The Landmark The Landmark The Landmark The Landmark VillaVillaVillaVillaVillaggggge Events Centree Events Centree Events Centree Events Centree Events Centre,,,,, WWWWWater Corporation Road,ater Corporation Road,ater Corporation Road,ater Corporation Road,ater Corporation Road, Off Ligal A Off Ligal A Off Ligal A Off Ligal A Off Ligal Ayyyyyorindeorindeorindeorindeorinde,,,,,Victoria Island, Lagos,Victoria Island, Lagos,Victoria Island, Lagos,Victoria Island, Lagos,Victoria Island, Lagos, Lagos State, NigeriaLagos State, NigeriaLagos State, NigeriaLagos State, NigeriaLagos State, Nigeria on Friday, Friday, Friday, Friday, Friday, the 7 7 7 7 7ththththth day of May, 2010 day of May, 2010 day of May, 2010 day of May, 2010 day of May, 2010 at 10.00 a.m. (the Meeting) 10.00 a.m. (the Meeting) 10.00 a.m. (the Meeting) 10.00 a.m. (the Meeting) 10.00 a.m. (the Meeting).

I/WE***** ________________________________________________________________________________________of_____________________________________________being

a member/members of Oando PLC and holders of ___________________ shares, hereby appoint** ______________________ or failing him/her, the Chairman of theMeeting as my/our proxy to act and vote for me/us on my/our behalf at the Meeting of the Company to be held on Friday 7 May, 2010, which will be held for the purposes ofconsidering and, if deemed fit, passing with or without modification, the resolutions to be proposed at the Meeting and at each adjournment of same and to vote for or againstthe resolutions in accordance with the following instructions:

NOTENOTENOTENOTENOTEA member who is unable to attend the Annual General Meeting is entitled by law to vote by proxy. The proxy form has been prepared to enable you exercise your right in caseyou cannot personally attend the Meeting.

The proxy form should notshould notshould notshould notshould not be completed if you will be attending the Meeting. If you are unable to attend the Meeting, read the following instructions carefully: Proposed resolutionsProposed resolutionsProposed resolutionsProposed resolutionsProposed resolutions For AgainstFor AgainstFor AgainstFor AgainstFor AgainstTo receive the Report of the Audit Committee; To declare the dividend recommended by the directors of the Company To elect members of the Audit Committee; To re-appoint the Auditors; To authorise the directors of the Company to fix the remuneration of the Auditors To elect Chief Sena Anthony director To elect Ms. Amal Inyingiala Pepple CFR director To elect Ms. Genevieve Sangudi director To re-elect Major General Mohammed Magoro (Rtd), OFR, PSC, USAWC, Galadiman Zuru as director To re-elect Mr. Omamofe Boyo as director To re-elect Mr. Mobolaji Osunsanya as director To re-elect Mr. Navaid Burney as director Resolved that the fees payable to the Non Executive directors of the Company be increased from N1,000,000.00 per annum for the Chairman andN900,000.00 each per annum for all other Non Executive directors to N2,500,000 per annum for the Chairman and N2,000,000 for all other non- executivedirectors with effect from 1 January 2010 which fees are payable quarterly in arrears”.

Resolved that on the recommendation of the Directors and in accordance with Article 46 of the Articles of Association of the Company the Authorised sharecapital of the company be and is hereby increased from N1,000,000,000.00 (One Billion Naira) to N3,000,000,000.00 (Three Billion Naira) by the creationand addition thereto of 4,000,000,000 new ordinary shares of 50 kobo each ranking in all respects pari passu with the existing shares of the company andthat clause 6 of the company’s Memorandum of Association and article 3 of the Company’s Articles of Association be and are hereby amended to reflect thenew Authorised share capital of N3,000,000,000.00 (Three Billion Naira) divided into 6,000,000,000 (Six Billion) ordinary shares of 50 kobo each”. “Resolved on the recommendation of the Directors and in accordance with Article 141 of the Company a sum of N301,694,876 out of the balance standingto the credit of General Reserve as at the year ended 31st December 2009 be capitalized and that the Directors be and are hereby authorized to appropriatethe said capitalized sum of N301,694,876 to the members holding the shares of the company at the close of business on 20 May 2010 in the proportion of1 ordinary share of 50kobo for every 2 ordinary Shares of 50k each held by them on that day on condition that the new capitalised sum of N301,694,876be not paid in cash to members holding Ordinary Shares but applied on their behalf in paying up in full at par 603,389,752 shares of 50k each now issuedto be allotted, distributed and credited as fully paid up to amongst the said members in the proportions aforesaid.”

a. Write your name in BLOCK CAPITALS on the proxy form where marked***** b. Write the name of your proxy where marked**, and ensure that the proxy form is dated and signed by you. The Common Seal mmmmmust ust ust ust ust be affixed on the proxy form if

executed by a corporation. Registered holders of certificated Oando Plc shares and holders of dematerialised Oando Plc shares in their own name who are unable to attend the Meeting and who wishto be represented at the Meeting, must complete and return the attached form of proxy in accordance with the instructions contained in the form of proxy so as to be receivedby the share registrars, First Registrars Nigeria Limited at Plot 2, Abebe Village Road, Iganmu, Lagos, or Computershare Investor Services (Proprietary) Limited, 70, MarshallStreet, Johannesburg, 2001, South Africa, PO Box 61051, Marshalltown, 2107, not lessnot lessnot lessnot lessnot less than 48 hours before the date of the Meeting.

Holders of Oando Plc shares in South Africa (whether certificated or dematerialised) through a nominee should timeously make the necessary arrangements with thatnominee or, if applicable, Central Securities Depository Participant (“CSDP”) or broker to enable them to attend and vote at the Meeting or to enable their votes in respectof their Oando Plc shares to be cast at the Meeting by that nominee or a proxy.

Signature: __________________________________ Dated this _____ day of _______________ 2010.

PROXY FORMPROXY FORMPROXY FORMPROXY FORMPROXY FORM

92

Please affix postage stamp

First Registrars Nigeria LimitedFirst Registrars Nigeria LimitedFirst Registrars Nigeria LimitedFirst Registrars Nigeria LimitedFirst Registrars Nigeria LimitedPlot 2, Abebe Village Road,Plot 2, Abebe Village Road,Plot 2, Abebe Village Road,Plot 2, Abebe Village Road,Plot 2, Abebe Village Road,Iganmu, Lagos,Iganmu, Lagos,Iganmu, Lagos,Iganmu, Lagos,Iganmu, Lagos,

ororororor

Computershare Investor Services (Proprietary) Limited,Computershare Investor Services (Proprietary) Limited,Computershare Investor Services (Proprietary) Limited,Computershare Investor Services (Proprietary) Limited,Computershare Investor Services (Proprietary) Limited,70 Marshall Street,70 Marshall Street,70 Marshall Street,70 Marshall Street,70 Marshall Street,Johannesburg, 2001, South AfricaJohannesburg, 2001, South AfricaJohannesburg, 2001, South AfricaJohannesburg, 2001, South AfricaJohannesburg, 2001, South AfricaPO Box 61051, Marshalltown, 2107PO Box 61051, Marshalltown, 2107PO Box 61051, Marshalltown, 2107PO Box 61051, Marshalltown, 2107PO Box 61051, Marshalltown, 2107

93

ADMISSION CARDADMISSION CARDADMISSION CARDADMISSION CARDADMISSION CARD

ANNUAL GENERAL MEETING TO BE HELD AT ANNUAL GENERAL MEETING TO BE HELD AT ANNUAL GENERAL MEETING TO BE HELD AT ANNUAL GENERAL MEETING TO BE HELD AT ANNUAL GENERAL MEETING TO BE HELD AT THE LANDMARK VILLAGETHE LANDMARK VILLAGETHE LANDMARK VILLAGETHE LANDMARK VILLAGETHE LANDMARK VILLAGE

EVENTS CENTRE, WATER CORPORATION ROAD, OFF LIGALIEVENTS CENTRE, WATER CORPORATION ROAD, OFF LIGALIEVENTS CENTRE, WATER CORPORATION ROAD, OFF LIGALIEVENTS CENTRE, WATER CORPORATION ROAD, OFF LIGALIEVENTS CENTRE, WATER CORPORATION ROAD, OFF LIGALI

AYORINDE, VICTORIA ISLAND, LAGOS, LAGOS STATE, NIGERIAAYORINDE, VICTORIA ISLAND, LAGOS, LAGOS STATE, NIGERIAAYORINDE, VICTORIA ISLAND, LAGOS, LAGOS STATE, NIGERIAAYORINDE, VICTORIA ISLAND, LAGOS, LAGOS STATE, NIGERIAAYORINDE, VICTORIA ISLAND, LAGOS, LAGOS STATE, NIGERIA

On Friday May 7, 2010 at 10.00 a.mOn Friday May 7, 2010 at 10.00 a.mOn Friday May 7, 2010 at 10.00 a.mOn Friday May 7, 2010 at 10.00 a.mOn Friday May 7, 2010 at 10.00 a.m

NAME OF SHAREHOLDERNAME OF SHAREHOLDERNAME OF SHAREHOLDERNAME OF SHAREHOLDERNAME OF SHAREHOLDER

_________________________________________________

NAME OF SHAREHOLDERNAME OF SHAREHOLDERNAME OF SHAREHOLDERNAME OF SHAREHOLDERNAME OF SHAREHOLDER

_________________________________________________

SIGNATURE OF PERSON ATTENDINGSIGNATURE OF PERSON ATTENDINGSIGNATURE OF PERSON ATTENDINGSIGNATURE OF PERSON ATTENDINGSIGNATURE OF PERSON ATTENDING

NONONONONOTE:TE:TE:TE:TE: The Shareholder or his/her proxy must produce this admission cardin order to be admitted at the meeting.

94

Dear Shareholder,Dear Shareholder,Dear Shareholder,Dear Shareholder,Dear Shareholder,

Now, your dividend can be paid directly into your bank account andyour bonus credited to your CSCS account instantly on issue, throughan electronic channel.

BenefitsBenefitsBenefitsBenefitsBenefits• Shareholders’ bank and CSCS accounts will be credited with

declared dividend and bonus respectively withinwithinwithinwithinwithin 24 hours!24 hours!24 hours!24 hours!24 hours!• Elimination of time and cost of verification of physical share

certificates with the registrar before trading bonus shares• Elimination of physical dividend warrants & bonus certificates and

attendant costs of printing and posting same• Avoid loss of dividend warrants or non receipt of bonus certificates

due to change of address• Elimination of unclaimed dividends

33333 Steps to receiving your e-Dividend and/or e-Bonus:Steps to receiving your e-Dividend and/or e-Bonus:Steps to receiving your e-Dividend and/or e-Bonus:Steps to receiving your e-Dividend and/or e-Bonus:Steps to receiving your e-Dividend and/or e-Bonus:1. Fill out an e-Dividend payment Mandate & e-Bonus form (Forms

have been posted to all shareholders and can also be downloadedfrom our website www.oandoplc.com). Ensure that all requiredinformation is supplied, particularly your:a. CSCS account numberb. Clearing house numberc. Stockbrokers named. Bank account number ande. Bank sort code number.

2. Verify your account details by having your banker sign and stampin the space marked “Authorised signature & stamp of Bankers”

Collect yourCollect yourCollect yourCollect yourCollect yourOando Dividend andOando Dividend andOando Dividend andOando Dividend andOando Dividend andBonus instantlyBonus instantlyBonus instantlyBonus instantlyBonus instantlywith easewith easewith easewith easewith ease

3. Return completed Mandate forms to:a. Oando PLC Head OfficeOando PLC Head OfficeOando PLC Head OfficeOando PLC Head OfficeOando PLC Head Office @ Ground Floor reception, 2,

Ajose-Adeogun Street, Victoria Island, Lagosb. First Registrars Nigeria Limited Head officeFirst Registrars Nigeria Limited Head officeFirst Registrars Nigeria Limited Head officeFirst Registrars Nigeria Limited Head officeFirst Registrars Nigeria Limited Head office @ Plot 2,

Abebe Village Road, Iganmu, Lagosc. All First Registrars Liaison Offices Nationwide – Abuja,All First Registrars Liaison Offices Nationwide – Abuja,All First Registrars Liaison Offices Nationwide – Abuja,All First Registrars Liaison Offices Nationwide – Abuja,All First Registrars Liaison Offices Nationwide – Abuja,

Kano, Kaduna Ibadan, Port Harcourt, EnuguKano, Kaduna Ibadan, Port Harcourt, EnuguKano, Kaduna Ibadan, Port Harcourt, EnuguKano, Kaduna Ibadan, Port Harcourt, EnuguKano, Kaduna Ibadan, Port Harcourt, Enugu

Unclaimed DividendsUnclaimed DividendsUnclaimed DividendsUnclaimed DividendsUnclaimed DividendsShareholders with outstanding dividend payments can also have

their bank accounts credited immediately by following belowinstructions:

- Complete your e-dividend form as outlined in the steps 1 - 3above

- Attach a letter of authorisation addressed to the Registrarmandating payment of outstanding dividends to the bankaccount stated on your completed e-dividend form

- Attach stale dividend warrants (where available)- Submit your e-dividend form along with the authorisation

letter at any of the locations stated above.

SignedOredeji Delano (Mrs.)Oredeji Delano (Mrs.)Oredeji Delano (Mrs.)Oredeji Delano (Mrs.)Oredeji Delano (Mrs.)Company secretary

95

e-DIVIDEND PAYMENT MANDATE, e-BONUS, e-REPORT INFORMATION & CHANGE OF ADDRESS FORMe-DIVIDEND PAYMENT MANDATE, e-BONUS, e-REPORT INFORMATION & CHANGE OF ADDRESS FORMe-DIVIDEND PAYMENT MANDATE, e-BONUS, e-REPORT INFORMATION & CHANGE OF ADDRESS FORMe-DIVIDEND PAYMENT MANDATE, e-BONUS, e-REPORT INFORMATION & CHANGE OF ADDRESS FORMe-DIVIDEND PAYMENT MANDATE, e-BONUS, e-REPORT INFORMATION & CHANGE OF ADDRESS FORM

I. PERSONAL DETAILS, 2. e-BONUS & 3. e-REPORT INFORMATIONI. PERSONAL DETAILS, 2. e-BONUS & 3. e-REPORT INFORMATIONI. PERSONAL DETAILS, 2. e-BONUS & 3. e-REPORT INFORMATIONI. PERSONAL DETAILS, 2. e-BONUS & 3. e-REPORT INFORMATIONI. PERSONAL DETAILS, 2. e-BONUS & 3. e-REPORT INFORMATION

Shareholder’s name(s)______________________________________________________________________________________________________________________(Surname/Company name) (Other names)

Full Name(s) of any other holder* _____________________________________________________________________________________________________________(*Including Deceased if applicable)

Shareholders Certificate No(Where available) CSCS A/c No__________________________________________(Where available)

Stockbroker’s Name _______________________________________________Clearing House No (CHN)____________________________________________________

No of units held: __________________ Date of Birth/Incorporation of Company: _________________________________________________________________

Address (As it appears in the Register of Shareholders): ____________________________________________________________________________________________

_________________________________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________________________________

Mobile (GSM) Number(s):____________________________________________________Other Nos._______________________________________________________

Email Address: ________________________________________________________ Fax __________________________________________________________________

4 BANK MANDATE4 BANK MANDATE4 BANK MANDATE4 BANK MANDATE4 BANK MANDATEAgreement and AcknowledgmentAgreement and AcknowledgmentAgreement and AcknowledgmentAgreement and AcknowledgmentAgreement and Acknowledgment

i.i.i.i.i. I/We hereby agree that this mandate form is an acceptance and acknowledgment of the receipt of our dividend payment in Cash from Oando Plc and anauthorization to Oando Plc to act under item (iii) below.

ii.ii.ii.ii.ii. I/We hereby agree that Oando Plc may act and rely on these instructions until Oando Plc receives written notification from me/us of the revocation ormodification of these instructions.

iii.iii.iii.iii.iii. I/We hereby authorize Oando Plc to credit or cause to be credited all dividend payments due to me/us into my/our Bank Account as detailed below, witheffect from the date hereof

Bank: __________________________________________________ Branch ___________________________________________________________________________

Shareholder’s Bank Account No:

Dated this _________ day of _____________________________20______

____________________________ _______________________________Shareholders Signature Shareholders Signature**

Authorised Signature & Stamp of Bankers Authorised Signature & Stamp of Bankers Authorised Signature & Stamp of Bankers Authorised Signature & Stamp of Bankers Authorised Signature & Stamp of Bankers** In the case of corporate shareholder, please use company seal/stamp

5.5.5.5.5. CHANGE OF ADDRESS CHANGE OF ADDRESS CHANGE OF ADDRESS CHANGE OF ADDRESS CHANGE OF ADDRESS I/We hereby request that all correspondences relating to my/our holdings be sent to the address below:

New Address: _____________________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________________________________

Date:_________________DD___________/______MM_______/_________YYYY

Completed forms should be returned to:• The Registrar, First Registrars Nigeria limited, Plot 2, Abebe Village Road, Iganmu, Lagos• First Registrars Zonal Offices in Abuja, Enugu, Ibadan, Kaduna, Kano and PortHarcourt• Oando Plc Head Office, Ground Floor Reception, 2, Ajose Adeogun Street, Victoria Island, Lagos

96

HEAD OFFICEHEAD OFFICEHEAD OFFICEHEAD OFFICEHEAD OFFICE(5th, 7th-10th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2702400;E-mail: [email protected]: www.oandoplc.com

SA Office AddressSA Office AddressSA Office AddressSA Office AddressSA Office AddressMettle House32 Fricker RoadIllovoJohannesburgSouth Africa .Tel: 011 268 6235

GROUP LIAISON OFFICGROUP LIAISON OFFICGROUP LIAISON OFFICGROUP LIAISON OFFICGROUP LIAISON OFFICEOando LtdFirst Floor50 Curzon StreetW1J 7UWLondonTel: 44-207-297-4280-7Fax: 44-207-499-5375

OANDO MARKETINGOANDO MARKETINGOANDO MARKETINGOANDO MARKETINGOANDO MARKETING(8th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2601290-9; 2702400E-mail: [email protected]: www.oandoplc.com

ABUJA AREA OFFICEABUJA AREA OFFICEABUJA AREA OFFICEABUJA AREA OFFICEABUJA AREA OFFICEPlot 252,Central Business DistrictOpp. NNPC TowersFederal Capital TerritoryAbuja, NigeriaTel: 234-9-5235458-9

OANDO TRADINGOANDO TRADINGOANDO TRADINGOANDO TRADINGOANDO TRADINGThistle House4, Burnaby Street,Hamilton HM 11BermudaTel: 441295 1443Fax: 441 295 9216

OANDO SUPPLY AND TRADINGOANDO SUPPLY AND TRADINGOANDO SUPPLY AND TRADINGOANDO SUPPLY AND TRADINGOANDO SUPPLY AND TRADING(10th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2704400Fax: 234- 1 – 2696758

GASLINKGASLINKGASLINKGASLINKGASLINK(5th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2702794-5Fax: 234-1-2713403E-mail: [email protected]: www.gaslink.org

OANDO GAS & POWEROANDO GAS & POWEROANDO GAS & POWEROANDO GAS & POWEROANDO GAS & POWER(5th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2702794-5Fax: 234-1-2713403

OANDO ENERGY SERVICESOANDO ENERGY SERVICESOANDO ENERGY SERVICESOANDO ENERGY SERVICESOANDO ENERGY SERVICES(7th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2622311-4Fax: 234-1-2622311

OANDO EXPLORATION ANDOANDO EXPLORATION ANDOANDO EXPLORATION ANDOANDO EXPLORATION ANDOANDO EXPLORATION ANDPRODUCTIONPRODUCTIONPRODUCTIONPRODUCTIONPRODUCTION(7th Floor)2, Ajose Adeogun Street , Victoria IslandLagos, NigeriaTel: 234-1-2601293-5, 4619882Fax: 234-1-2625467

WEST AFRICAN OPERATIONSWEST AFRICAN OPERATIONSWEST AFRICAN OPERATIONSWEST AFRICAN OPERATIONSWEST AFRICAN OPERATIONSOANDO BENIN REPUBLICOANDO BENIN REPUBLICOANDO BENIN REPUBLICOANDO BENIN REPUBLICOANDO BENIN REPUBLICOIBP 1093 Recette Principale CotonouTel: 299-313679

OANDO GHANAOANDO GHANAOANDO GHANAOANDO GHANAOANDO GHANAB35 Augostino Neto RoadAirport Residential AreaAccra, GhanaTel: 233-21-761196, 761520

OANDO ( TOGO ) S.A.OANDO ( TOGO ) S.A.OANDO ( TOGO ) S.A.OANDO ( TOGO ) S.A.OANDO ( TOGO ) S.A.142, Rue 42 Enface De L’HotelSakarawa AblogameLome, TogoTel: 228-227-59-46, 227-04-22

PLANTS/TERMINALSPLANTS/TERMINALSPLANTS/TERMINALSPLANTS/TERMINALSPLANTS/TERMINALSAPAPA TERMINALAPAPA TERMINALAPAPA TERMINALAPAPA TERMINALAPAPA TERMINALTerminal OfficeKayode StreetMarine BeachApapa, LagosTel: 234-1-5870218

LAGOS AVIATION TERMINALLAGOS AVIATION TERMINALLAGOS AVIATION TERMINALLAGOS AVIATION TERMINALLAGOS AVIATION TERMINALOando AviationMuritala Mohammed Local AirportOpposite Aero contractorsIkeja, LagosNigeriaTel: 234-1-4975888

ABUJA AVIATION TERMINALABUJA AVIATION TERMINALABUJA AVIATION TERMINALABUJA AVIATION TERMINALABUJA AVIATION TERMINALOando AviationBehind Julius Berger YardNnamdi Azikwe International AirportAbuja

BITUMEN PLANTBITUMEN PLANTBITUMEN PLANTBITUMEN PLANTBITUMEN PLANTC/O Oando Div. OfficeReclamation RoadPort HarcourtRivers StateNigeriaTel: 234-84-234516

LUBRICANT BLENDING PLANTLUBRICANT BLENDING PLANTLUBRICANT BLENDING PLANTLUBRICANT BLENDING PLANTLUBRICANT BLENDING PLANTRido VillageOff Kachia RoadPMB 2110Kaduna StateNigeriaTel: 234-62-516128, 236282

ONNE TANK TERMINALONNE TANK TERMINALONNE TANK TERMINALONNE TANK TERMINALONNE TANK TERMINALOnne Terminal, Oando PlcOnne-NPA (flt) RoadOnne Oil and Gas Free ZonePort Harcourt, NigeriaTel: 234-84-579940

CONTACT DETAILSCONTACT DETAILSCONTACT DETAILSCONTACT DETAILSCONTACT DETAILS

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