Casting a spotlight on projects in the African energy sector, the final day of Africa Oil & Power focused on upstream oil and gas potential and the fiscal environment, and raised important issues Including trade coalition challenges and the impact of cost inflation on the oil and gas sector.
Moderated by Robert Perkins, EMEA Editor for Oilgram News, S&P Global Platts, the Upstream Africa panel featured the participation of Steve Jenkins, chairman of Savannah Petroleum; Robin Sutherland, GM of New Ventures Africa at Tullow Oil; Rhodri Scanlon, Senior Explorationist at Atlas Oranto; Olivier Trouver, VP of Integrated Solutions at Maersk Supply Service and Saheed Kenku, Director of National Content and Stakeholders at Schlumberger.
With the recent uptick in the oil price, panelists shared their perspectives on the activities and business opportunities in the oil and gas sector. Kenku pointed out that the services sector had been hit hard by the two-year downturn in the oil price but was “very pleased to see the type of recovery, activity and investments that have returned to the sector.”
“Obviously this recovery is not an even playing field on a global scale. North America, for example, has had a head-start in the recovery, however, I definitely see rebound and recovery for the sector in Africa,” he said.
Sutherland, meanwhile, stated that the oil price had not affected Tullow’s drilling activities and that the company was progressing with acquisitions and future projects. “We are actually doing well,” he said.
Additionally, he said that Tullow would most likely receive a final investment decision on its Uganda project by the end of the year and the full pipeline project in Kenya in 2019.
The second panel of the day, Closing Deals and the Fiscal Environment, focused on mobilizing a range of investments to drive the growth of the African energy sector and the potential of the African power sector.
Moderated by Shawn Duthie, Analyst at Africa Risk Consulting, the panel discussed a way forward in securing bankable projects and creating blended finance facilities that will benefit both consumers and producers.
Joining the panel was Nyonga Fofang, Managing Director of Bambili Group; Ashwin West, Investment Director at Africa Infrastructure Investment Managers, Kofi Adomakoh, Director and Global Head of Project Finance at Afreximbank; and Dr. Ladi Bada, MD at Shoreline Group.
Providing their outlook on the power sector, panelists were enthusiastic about the investment and growth potential of the sector. “The prospects are getting better, investors are getting more comfortable in Africa and we are doing the right thing to attract investors,” said Adomakoh.
Supporting the statement, West said that there would always be a need for power, and therefore, financing of power projects.
Touching on policy and legislation, Fofang expressed the need for a robust regulatory framework in the African power sector in order for it to reach its full potential.
In attracting further investment, West highlighted the need for a sustainable energy mix that would be beneficial to both producers and consumers. “Blended energy will bring cheaper power [to people] and secure return of investment for investors.”
On financing projects and forming relationships with financial institutions, the panel agreed that there were increasingly more funding sources available for projects in the energy sector. “We see private equity firms coming into the market, which means it is expanding. Private equity is funding more projects and we are starting to see a lot of private equity sales,” said Adomakoh.
Vladimir Ilyanin, Department Branch Director for Business Development at Gazprom, delivered a keynote presentation opening the final afternoon of AOP 2018, in which he gave his outlook on megaprojects and said it was crucial for such projects to cater to the domestic market before exporting to the international market. “Export is only reasonable when the domestic market is energy self-sufficient,” he said.