African and European stakeholders today tackled key issues of the African energy industry such as the role of national oil companies; opportunities for intra-African cooperation amid growing demand for liquefied natural gas; and creating new partnerships to address financing challenges, at the AOP Investor Forum in London.
Opening the day, Equatorial Guinea’s Minister of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima stated: “2020 is the ‘Investment Year’ for Equatorial Guinea, thanks to three key indicators. In 2020, we will be seeing increased drilling operations, an influx of new players as well as many new oil and gas related projects.”
Furthermore, he said, Equatorial Guinea is committed to improving transparency and social impact: “Oil and gas is not just about a revenue. It’s about social impact and transparency. Our new EITI office in Bata will help our population to understand our petroleum revenue management. This year, we have spent $20 million on health-related and training projects, in particular the Malaria Vaccine Project.”
Regarding current oil prices, Chairman and CEO of Tower Resources Jeremy Asher said: “The current price of oil works well with consumers and producers. In this context, the economics are very good to push projects offshore West Africa.”
Nicolas Bonnefoy, Special Advisor, Africa Matters stated: “We have seen many African countries improve their business environments like Angola, Equatorial Guinea and so on. Such initiatives are key to bring oil and gas related investment to Africa, alongside relatively stable oil prices”
Further talks focused on finance issues such as hurdles for smaller operators to access project capital, alternative funding models involving local capital markets and the recent increase of initial public offerings.
Ababacar Diaw, Managing Director, Impaxis Securities said: “Local banks are not set up to finance oil and gas mega projects due to the high-level of risk. Such barriers can be lifted by domestic capital markets. Involving the population is a quick and efficient way to raise capital in a country where the financial system fails to meet project needs.”
“Most local banks on the continent are more familiar with dealing with petroleum production. It is key to de-risk exploration right at the start of the project in order to increase banking appetite in upstream,” said Jubril Enakele, CEO of Iron Capital.