Group Chief Executive of Oando Plc, Wale Tinubu, has reaffirmed Africa as an exciting prospect for investors irrespective of the current clime of low oil prices.

He said a soft market will persist for longer than anticipated, noting that indigenous companies such as Oando need to now focus on areas the multinationals have avoided.

Tinubu spoke as a panellist 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), in the United Arab Emirates (UAE).

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 noted that with about $6 billion lost to crude oil theft and vandalism, and 3,000 pipeline points vandalised 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.”

Tinubu also reiterated his belief that portfolio optimisation, hedging, mergers and consolidations, a cut in capital expenditure (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 recapitalisation 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 optimise our value propositions and asset portfolio.”

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 the $90 or $100 a barrel margin for another few years.

Against this backdrop, President/CEO, Qatar Petroleum, Saad Sherida Al Kaabi, said: “Invest heavily in the downturn to ensure you are successful in the long term” while the Minister of Energy, Suhail Mohamed Al Mazrouei, promised to “use the downturn to improve efficiency.”