Bookmark : http://www.sacoilholdings.com/investor-centre/press-releases/promotion-of-african-oil-companies-a-priority/?id=68&entryId=322
Skip to : [Content] [Navigation]

Promotion of African Oil Companies ‘A Priority’

<< Back to Media Coverage

03 Oct 2012

Promotion of African oil companies ‘a priority’

National oil companies and government regulatory agencies should act as catalysts for viable opportunities for small indigenous oil and gas companies, Bradley Cerff, vice-president for operations at upstream oil and gas company SacOil, said on Tuesday.

Mr Cerff said indigenisation — which is meant to ensure participation of indigenous oil and gas companies — should be prioritised.

The push for indigenisation in some African countries suits smaller oil and gas companies, such as the JSE-listed SacOil, as it presents them with an opportunity to get a foot in the lucrative industry.

"In Nigeria, for example, small indigenous players are now producing and exploring for oil and gas. They have found a niche for themselves and are carving out a future in a market that used to be dominated by much bigger players, mainly the international oil majors. "The bottom line is that the big companies need big reserves of many thousands of barrels a day. This leaves a lot of smaller, but highly viable discovered but undeveloped reserves available for indigenous operators to operate and still make a healthy return and profit. One thousand barrels a day means nothing to a major oil company; it can mean a lot to a small, indigenous operator," Mr Cerff said.

He said national oil companies in Africa and the rest of the world often did limited exploration and drilling "to prove up the potential of hydrocarbons and then farm the acreage out to the oil majors. Only around one out of 10 drilling ventures by oil companies in a particular basin becomes commercially successful.

"Surely there is increasing scope and a valid business case for small, hungry, indigenous players to get involved in bringing to account the resources that the big guys cannot be bothered looking at due to their overhead structures and corporate strategies", he said.

Mr Cerff said there was scope for independent oil and gas companies to interact with indigenous companies that sometimes have access to oil and gas reserves, but lackcapital and skills.

Siseko Njobeni