The inability of indigenous oil and gas companies in Nigeria to attract equity to fund their projects has made them unable to increase production from 2 million barrels per day (mbpd). This was reported by Ecobank’s Head of Energy Research; Mr. Dolapo Oni, according to Vanguard news.
Mr. Oni at the Nigerian Producers Forum held recently in Lagos, further explained that investors are particular about corporate governance, transparency and the ownership structure of a company, factors that are yet to be fully imbibed by most indigenous companies.
He also added that at the point the indigenous companies have to finance some of their projects through debts and play the exploration game. According to him, some banks had exposures of up to 40% to the oil and gas industry in 2014 which wasn’t really a safe one as that venture could make them vulnerable to unprecedented events in the industry.
In his remarks, he made it known that “in 2014 about N2 trillion was lent out to the industry, which can be equated to about $20 billion going by the exchange rate last year, he said the industry is dependent on debts”. “Presently, the industry requires between $25 billion to $30 billion investment yearly” he added.
Finally, he added that the Multinationals in the industry (IOCs) have shifted their base from shallow waters to offshore and deep water of which more of their assets would be divested. The three major reasons for the divestment by IOC’s includes; onshore fields, troubled blocks and assets that already lie close to marginal blocks operated by the indigenous companies.
No comments:
Post a Comment