Emeka Okwuosa, the Group Chief Executive Officer of Oliserv Group of Companies, shed light on the obstacles faced by indigenous oil firms when acquiring divested assets from International Oil Companies (IOCs) during a presentation titled “Financing Africa’s Energy Companies” at the ongoing 8th Sub-Saharan Africa International Petroleum and Exhibition Conference in Lagos.
Okwuosa, on Thursday, emphasized financial constraints as a significant challenge in securing divested assets, citing the substantial financial resources, upfront payments, investment commitments, and operational expenditures involved. Represented by Nnanna Anyanwu, Managing Director of Oilserv, Okwuosa noted that many indigenous companies struggle with financial capacity, hindering their ability to compete or access favorable financing terms from traditional sources like banks, private equity firms, or capital markets.
He highlighted the limited access to capital, especially for acquisitions, exploration, development, and operational activities, which has been severely impacted by the preference for green energy investments by capital providers.
In addition to financial constraints, Okwuosa discussed regulatory complexities that can complicate the acquisition and operation of divested assets. He stressed the need for indigenous companies to navigate these frameworks effectively to secure and maintain ownership of divested assets.
Moreover, Okwuosa identified inadequate infrastructure, transportation networks, power supply, port facilities, and political and security risks as potential deterrents for indigenous companies seeking to acquire divested assets. These risks, he noted, could delay project approvals, increase operational costs, and disrupt development and production activities.
Addressing social responsibility concerns, Okwuosa emphasized the importance of maintaining a balance in community relations and social responsibility issues associated with acquiring and operating divested assets, given the historical legacy and socioeconomic challenges.
Furthermore, he highlighted the need for due diligence and risk management skills, acknowledging that some indigenous companies lack the capabilities and resources to perform comprehensive assessments and implement risk mitigation strategies effectively.
Despite these challenges, Okwuosa encouraged indigenous operators to focus on capacity building and embrace new trends to enhance competitiveness and attract investment. He suggested initiatives such as the Nigerian Content Development and Monitoring Board (NCDMB) to empower indigenous players and promote industry growth.
The conference, organized by the Petroleum Technology Association of Nigeria (PETAN) under the theme “The Next Steps: Accelerating African Content,” served as a platform for discussions aimed at advancing Africa’s energy sector.
