‘Africa’s ability to de-risk effectively will attract investment, growth’

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‘Africa’s ability to de-risk effectively will attract investment, growth’

De-risking investment and consolidating market growth has been cited as a major way of mitigating the challenges of developing marginal and large assets in Africa, beyond the normal gamut of geological, political, legislative and commercial issues.

Participants at a two day conference also argued that de-risking of the market should pass through the entire length of project development in all phases, through proper planning, execution, implementation and ensuring sustainable community relations.

This should also comprise sifting through the entity of both internal and external factors affecting investment economies by the way of political risk, technological risk, project risk, commercial risk and human risk.

The Africa Marginal and Independent Oil/Gas Producers Conference, organised by Energy & Corporate Africa, which ended recently in London showcased tremendous ardour and perspective that the future of Africa’s oil and gas industry is still huge and alluring.

The delegates equally called for palliative measures from African governments in terms of reduced political tensions, policies and amenable regulatory frameworks that would help to attract investments into the region.

In their opinion, creating synergy and collaboration through project warehousing and pragmatic partnerships are strategic models for ensuring cost reduction that would help to maintain growth and profitability.

The Chief Executive Officer, Fortesa International, Roger Beal, noted that a company can de-risk its investments through internal application of profit margin to cover risks.

Delegates also decried the challenge of access to capital for project execution whereby some of the local banks could not afford to comfortably give a loan of about $50million to viable companies in this regard.

The Vice Chairman, Petroleum Upstream Committee, in the Nigerian upper legislative chamber, Senator Gershom Bassey Otu Henry, expressed the hope that a judicial management of the Nigerian Local Content Fund, in excess of $200million would be a good source of loan to competent companies. This is expected to also serve as a strong palliative measure to curb problems of seeking project capital to develop the industry.

Senator Gershom also urged the participation of local banks in such a conference to enable them acquire skills and better understanding of how to deal with operators, and also be able to enlighten them more on how to seek funding for projects.

The Director, Oil and Gas at Standard Bank, Olivier Florentine, emphasised that the way forward for project funding in Africa could be through a wide variety of equity and debt providers.

According to Pat Maseli, Deputy Director/Head, Upstream, Department of Petroleum Resources, who represented the Director, Mordecai Ladan, said Nigeria is now encouraging capital in-flow by encouraging significant participation of indigenous operators and meaningful partnerships in the running of oil and gas assets.

Legal risks and problems of infrastructural developments were also highlighted as crucial detriments and challenges to oil industry development and fostering rapid gas development.

The General Manager, Gas, National Petroleum Investment Management Services (NAPIMS), Hilary Joseph Akpan, emphasized the criticality of speeding infrastructural development for gas commercialisation to be successful.

Similarly, the General Manager, Joint Ventures, NAPIMS, Catherine Iheme, reiterated the need to safeguard investments by empowering better understanding in joint venture relationship, and also gearing up for the burgeoning impact of alternative energy as it might affect the future of fossil as a leading energy mix globally.

From the operators and technical partners perspective, Segun Ilori, Corporate Affairs Director, Green Energy International, operators of the Otakikpo field and Adeleke Adedipe, Chief Operating Officer of Lekoil, technical partners of same field elucidated on lessons learnt from bringing the field on stream.

On their part, Felix Amieye-Ofori, Managing Director, Energia Limited and Osas Owieadolor, Managing Director, Platform Petroleum Limited, established how their evacuation and pipeline collaborations with Pillars and NewCross have become very efficient, and a strategic testimony of the positive outputs of synergy and collaboration as antidotes for success.

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