Africa Oil & Power talks to Ibrahima Diaby, Managing Director, Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire, PETROCI.
How did PETROCI restructure its business model to see positive results, following years of struggle?
The global oil and gas market was hit hard by the oil price drop a few years ago. At PETROCI, we decided to take action immediately by preparing a restructuring strategy. Unfortunately, about ten percent of the total employees had to be made redundant.
We also performed an audit to understand which business units were underperforming and what concrete actions were needed to be put in place. Our main concern was that PETROCI had a large long-standing debt. We treated this issue by finding common grounds with our creditors and finding the best win-win scenario with all involved stakeholders.
Together with the Ministry in charge of Petroleum, we identified three key areas of development. First, we restarted our promotion campaigns for exploration blocks in the Ivorian basin. Most of our long-time partners withstood the crisis and stayed in the country. Second, we worked to reduce both capital and operational expenditures in order to create a leaner business model. Finally, we sold equity shares in a number of the underperforming branch of activities outside our core business.
We sold our shares in the logistics business unit which is now called Petro Sea Logistics (PSL), in partnership with Sea Invest. We then applied the same strategy for our fuel distribution business which is now majority owned and managed by Puma Energy, although we still hold 20 percent equity.
In order to build a more cost-effective environment, we rationalised our activities resulting in a heavier focus on the upstream. A major part of our strategy also requires infrastructure development.
Tell us about your major infrastructure projects that are currently ongoing?
We have three major projects currently ongoing. First of all, we are in talks with private partners to extend the Abidjan-Bouake pipeline, which carries refined petroleum products to the centre of the country. We aim to extend it to the northern town of Ferkessedougou, all the way to the north-eastern border with Mali and, to the north-western border with Burkina Faso.
Our second project is to increase storage capacity in the ports of Abidjan and San Pedro. We are partnering up with private companies for both projects, which feature two butane gas storage units, ultimately increasing our storage capacity by 60 to 80 percent. Such projects are necessary to meet the growing demand for domestic gas and support refined products demand in the sub-region.
Other infrastructure projects include the construction of a new oil and gas jetty to replace the ones present in Vridi canal in the port of Abidjan. We are also trying to create a bigger network of urban pipelines to feed natural gas to the industrial zone of Yopougon, north of Abidjan.
What promotion activities are you planning to attract foreign investors for this year and beyond?
PETROCI will be an active participating in APPO Cape VII Conference & Exhibition, in Malabo.
The Cabinet of the Minister and the Directorate General of Hydrocarbons (DGH) pilot these national promotional actions in which PETROCI participates.
For the moment, we are not planning to organise a bidding round for blocks.
We successfully presented 15 blocks to private explorers a couple of years ago and signed PSCs on those blocks. We are always open to meeting potential stakeholders and showcase existing opportunities in our basin.
What are your expectations for the APPO Cape VII Conference & Exhibition and how can the organization foster the growth of Africa’s oil and gas economy?
APPO was born with the goal of uniting African producers. Africa boasts around ten percent of global hydrocarbon proven reserves and its territory remains relatively under-explored, so the potential is huge.
Countries must work together, cooperate, exchange information and best practices. I believe the role of an organisation like APPO is to structure such synergies, bring together stakeholders and create alliances between countries. At APPO Cape VII, we hope to see concrete resolutions emerge from strategic meetings regarding key topics such as funding issues for mega-projects and the implementation of channels of communication between different countries across the continent.