Strong Corporate Governance Structures Critical in the Current Low-Price Environment – FBN Capital

According to FBN Capital Limited, strong corporate governance structures are critical to attracting funding for Oil and Gas development in the prevailing low-price environment. Rolake Akinkugbe, the Head of Energy and Natural Resources at FBN Capital made this known during the eighth edition of the annual sub-Saharan African Oil and Gas Conference 2015 themed, ‘optimising innovation and investment opportunities in the upstream, downstream and service sectors’organized by Energy and Corporate Africa which took place in Houston Texas on the 29th and 30th 2015.

Speaking on the topic ‘Sub-Saharan Africa’s Re-shaped Oil and Gas Future’ which took a critical look at the current global dynamics on the Sub-Saharan African oil and gas industry she said, “In the current low-price environment, it will even be more critical for firms to focus on implementing strong corporate governance structures, and be flexible and willing to explore funding options that may be more dilutive from an equity perspective, than would have been preferred”.

The presentation also highlighted the inherent challenges in the current scenario stating that “Local companies in SSA, could be particularly vulnerable without the right technical and financial capacity to quickly monetise reserves. It is at this juncture, that the search for valuable partnerships with experienced E&P firms and IOCs should quickly yield fruit.” She further noted that though oil prices would eventually recover, it was unlikely that the region would see the triple digit highs recorded prior to June 2014.

“From a macro-perspective, there’s been a structural shift for many of SSA’s crude oil exporting economies, as they cope with the significant fall in export revenues from oil – in some cases revenues have fallen by as much as 40%. This shift, may force a renewed policy focus on those parts of oil and gas value-chain that create the greatest economic dividends in terms of value creation, and contribution to inclusive economic growth. Thus, it is likely that the drive for local content will continue in earnest. However, implementation of such policies, particularly in some of newer oil-countries may be tempered by the need to keep foreign investors incentivised in a low-price world.” Rolake said.

Another notable highlight of the conference was the awards presentation where Rolake Akinkugbe was recognized for Best African Oil & Gas Analyst of the Year as well as the Most Valuable Player on the Oil Patch for her commitment to the Oil & Gas industry. Her display of knowledge, and the provision of industry insights and analysis which has helped governments and organizations maximize investment opportunities manage risks was applauded.

The sub-Saharan African Oil & Gas Conference brings together top government officials, national oil companies from Sub-Saharan Africa, international oil companies, independent exploration, production, service companies, industry top players, investors, financial institutions and private equity firms who meet to exchange ideas, and also showcase available opportunities.