FBN Capital highlights challenges, opportunities for West African oil & gas sector

In spite of the challenges currently being faced within the sub-Saharan African Oil and Gas sector today with production of shale oil in the world market, the reduction of oil imports from Nigeria by the USA and the global drop in crude oil prices, there appears to be hope on the horizon for sub-Saharan African producers.

This sentiment was expressed by Rolake Akinkugbe, the Head of Energy and Natural Resources at FBN Capital, while speaking recently at the 6th Annual West Africa Trade & Export Finance Conference organized by the Global Trade Review magazine in Lagos.

Speaking at the event, Akinkugbe highlighted the fact that the rate of decline of the shale oil wells at 60 per cent to 90 per cent in about 35 months compared to that of conventional oil wells, which is around 5 per cent means the latter will be more sustainable over the years.

She also noted that West Africa accounts for one-third of the world’s new oil discoveries, especially Nigeria’s Niger Delta basin and the gulf of Guinea, which points to the fact that there is apparent potential for sustainable oil exploration and production over a significant period of time.

According to her, the US geological survey on the region puts the estimated projection at 3.2 billion barrels of oil.

She also added that with the region’s natural gas reserves (West Africa contains 32 per cent of Africa’s Natural Gas reserves), offshore gas will likely begin to feature more from 2017.

Akinkugbe said: “There are challenges which are currently being experienced – from the difficulty in attracting capital at reasonable costs to fund oil and gas infrastructure projects, to the cost of exploration and development of existing properties. It is anticipated that these challenges may scuttle the opportunities for growth if not addressed.”

In 2014, FBN Capital was recognized as the Best Investment Bank in Nigeria for the third year running by Global  Finance Magazine.

It also received the World Finance Banking Awards for the Best Investment Bank in Nigeria and the EMEA Finance African Banking Awards as the Best Local Investment Bank in 2013.

The Annual West Africa Trade and Export Finance Conference was held in Lagos for the first time on February 4 to 5, 2015.

Given Nigeria’s rise to prominence and West Africa’s growing prosperity, the focus of the conference took a look at the industries and sectors that have been instrumental in developing the country.

The event brought together delegates from corporate, banking and financial services organizations to discuss key market issues within agri-business, hard commodities, risk mitigation and infrastructural development.