Chairman of Seplat Petroleum Development Company, ABC Orjiako has noted that gas has the potential to transform African economies if harnessed properly.
Orjiako made the submission as a panelist at the recently concluded Africa/Singapore Business Forum hosted by the International Enterprise (IE) in Singapore.
Speaking on the theme, “Africa Oil and Gas: Positioning for the future”, which discussed the Africa Oil and Gas narrative from the perspective of a Nigerian Independent, playing in the global equity space, Orjiako and other panellists highlighted the challenges that exist not just in Nigeria but on the entire Continent.
Nigeria being the biggest economy in Africa and the largest oil producer in the continent was an easy reference point for the challenges facing commodities producing countries in Africa and elsewhere in the world. The country is facing not just its toughest foreign exchange volatility and inflation but low oil prices which have now been exacerbated by the loss of millions of barrels to the Niger Delta militancy leading to a huge budget deficit as is the case with other producers.
Orjiako stressed that the country’s current challenges with low oil prices, high exchange rate relative to the dollar and spiralling inflation all signal a wake-up call for Nigeria’s economic diversification. According to him, “The good news is that Nigeria is taking the right steps in the right direction by the recent subsidy removal and the floating of the Naira.
What is expected is that the right fiscal discipline to channel the associated savings to the real sector, particularly in infrastructure, manufacturing, agriculture will evolve. Gas is at the center of this transformation because in Africa, the power infrastructure gap is the biggest barrier to real growth. The huge deficiency in power presents a huge investment opportunity with good headroom for returns on investment.”
He noted that Seplat’s leading business growth objective is to consolidate the company’s rapidly growing gas business stating that in the last two years the company has doubled its gas production to 300MMscf/day, by the commissioning of our 150MMscf/day Modular gas plant in OBEN, with plans underway to increase the processing capacity to 500MMscf/day by end of 2016.
Seplat is currently delivering 30% of gas for power in the Nigerian domestic gas market and is well positioned to increase this exponentially in the coming years with ability to deliver to both the Nigerian market and the West African sub region.
Orjiako asserted that Seplat is committed to the inevitable transformation waiting to happen in Nigeria and the African continent regardless of the current challenges.
The panellists amongst whom were Mr. Bonang Mohale, Chairman & Vice President, Shell Downstream South Africa (Pty) Limited; Mr. Humphrey Kariuki Ndegwa, Founder, Dalbit Petroleum; Tan Sri Hassan Marican, Chairman, SembCorp Marine looked beyond the challenges to draw attention to the enormous opportunities these challenges present in the Continent, which makes Africa the inevitable investment destination.
The forum while providing a veritable platform to explore Africa-Singapore dialogue on Trade and investment promotion and by extension Africa-ASEAN cooperation at large also witnessed the signing of bilateral air services agreement between Nigeria and Singapore to strengthen their existing bilateral air services and curb double taxation on investments in both countries. Nigeria’s Minister of State for Aviation Senator Hadi Sirika signed on behalf of Nigeria.
Panelists cited government regulations and legal framework using the Mozambique and Tanzanian examples to highlight key factors inhibiting rapid growth of natural resources that abound in Africa. Other impediments highlighted included challenges around issuing of oil licenses such as in South Africa where Bonang Mohale pointed out that enormous oil and gas resources that would have otherwise be harnessed by International oil companies such as Shell with capacity to make required exploratory investment where locked underground.
It was emphasised that governments do not have the resources and skills to undertake what is required and should proactively let companies with the financial and technical muscle take over this responsibility, so that countries can gain associated benefits such as revenues from taxation and generation of employment for its citizens and overall economic growth.
Orjiako whose company pioneered assets acquisition from the IOCs in the Niger Delta in 2010, and proceeded to dual listing on the London Stock Exchange and Nigeria Stock Exchange in 2014, making Seplat a global brand and an investment entity in the Africa Oil and Gas industry emphasized that Seplat has built on that acquisition to notch up considerable progress in the areas that differentiate the company in terms of its operational track record, winning host committee engagement strategy, strong Corporate Governance and Best practices.
At production figures of 75kbpd of oil and condensate and 300MMscf/day of gas, Seplat is now the biggest Independent in the Nigerian oil and gas industry and continues to lead the new dawn of the indigenous program in Nigeria.