Group Chief Executive of Oando, Wale Tinubu, has reaffirmed Africa’s position as an exciting prospect for investors irrespective of the current clime of low oil prices. Speaking as a panelist on the topic ‘Resilience of the Oil and Gas Industry: An African Perspective’ at the recently concluded Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), he said “We expect a soft market will persist for longer than we anticipated, and indigenous companies such as Oando need to now focus on areas multinationals have avoided.”
Players within the continent have battled severe economic and security challenges as reduced rig counts, delayed and cancelled projects, vandalism, and depreciating export revenues have plagued the industry.
Tinubu explained that with hundreds of million dollars lost due to pipeline shut-ins since Q1 2016, $6 billion lost to crude oil theft and vandalism, and 3,000 pipeline points vandalized in under a year, it is imperative that Nigeria and other countries proffer “immediate solutions and turn challenges into opportunities.” He added, “At the moment, the Nigerian government is working to drive supply in a more efficient manner. However, we must also work with a long term view to reduce our heavy dependence on oil by undergoing an energy transformation, but for this to occur we require a tide of reforms, investments, and innovation to drive speedy market recovery.”
The oil industry is in its deepest downturn since the 1990s. While prices have recovered marginally a few times over the last year, the industry-wide belief remains that oil prices will not return to $90 or $100 a barrel for another few years.
Against this backdrop Saad Sherida Al Kaabi, President and CEO, Qatar Petroleum said “Invest heavily in the downturn to ensure you are successful in the long term” and His Excellency Suhail Mohamed Al Mazrouei, the Minister of Energy, Abu Dhabi, UAE said “We will use the downturn to improve efficiency”.
Tinubu also reiterated his belief that portfolio optimisation, hedging, mergers and consolidations, a cut in CAPEX and cost management as well as energy diversification are key measures for managing the downturn in the industry. He said, “To better navigate the challenging economic environment Oando has taken a number of strategic actions including the successful restructuring of our existing debt obligations through a N108 billion Medium Term Loan, a N70.5 billion recapitalization of our Downstream business and a soon to be completed N52.3 billion partial diversification of our Gas & Power business. At a time when the economy is experiencing stunted growth, strategic actions of this nature leave us better positioned to optimize our value propositions and asset portfolio.”
ADIPEC is one of the world’s leading oil and gas conferences hosting over 95,000 attendees including industry leaders and energy ministers, and is the foremost ground for discussing burning issues in the global energy sector, the future and emerging market opportunities.
Present at the four day conference were Oil and Gas heavyweights including Bob Dudley, Group Chief Executive, British Petroleum; Patrick Pouyanne, Chairman and CEO, Total; Claudio Descalzi, CEO, Eni Agip; Darren W. Woods, President, Exxon Mobil Corporation and His Exellency Suhail Mohamed Al Mazrouei, Minister of Energy, UAE.