Joint Capital Mobilization and Dual Listing Highlighted for Africa’s Energy Sector
PricewaterhouseCoopers (PwC) is urging South African investors, financial institutions, and policymakers to emulate the strategic approaches of major Western firms in bolstering energy security. The firm encourages a direct investment in Nigeria’s upstream oil sector to ensure reliable crude supplies for local refineries. This recommendation aligns with the Nigeria Upstream Petroleum Regulatory Commission’s (NUPRC) recent appeal to members of the Crude Oil Refinery Owners Association of Nigeria (CORAN) to consider acquiring oil blocks during the upcoming licensing round as a sustainable solution to ongoing supply challenges.
Pedro Omontuemhen, PwC’s Africa Oil and Gas leader, delivered this message during the 4th South Africa Week in Lagos, themed “Repositioning and Promoting Energy Investment between South Africa and Nigeria.” He emphasized the complementary strengths of both economies in oil, gas, renewable energy, and infrastructure, suggesting these synergies could foster substantial cross-border investment opportunities.
Omontuemhen posed a question to South African entrepreneurs regarding investment strategies in Nigeria, referencing the Dangote refinery’s ambition to supply petroleum products across Africa. He pointed out that, despite extensive exploration, South Africa lacks significant oil reserves, while discoveries in nearby Namibia highlight potential in the region’s sedimentary basin.
He urged South African firms to adopt the model utilized by International Oil Companies (IOCs), which invest in Nigeria’s oil exploration and production sectors to secure crude oil for their refineries. By following this path, South African businesses could mitigate their reliance on imports for refining, much like their American and British counterparts had done in the past.
During his address, Omontuemhen encouraged participation from South African entities in the current oil bidding round in Nigeria, where 50 oil fields are available for auction across various terrains. He asserted that establishing partnerships with reliable local businesses could ensure a continued supply of oil, highlighting the importance of collaboration in energy resource management.
Expanding on the potential in Nigeria’s oil and gas sector, Omontuemhen highlighted opportunities for joint exploration and technology transfer. He pointed out Nigeria’s deepwater assets as valuable prospects for South African technology partners, while also emphasizing the need to monetize Nigeria’s gas flaring to facilitate South Africa’s energy transition. This would unlock a multi-billion dollar liquefied natural gas (LNG) value chain.
As for renewable energy, he noted that South Africa’s knowledge in solar and wind technologies would synergize well with Nigeria’s abundant solar resources, paving the way for large-scale utility projects and distributed energy solutions. Omontuemhen also advocated for dual listings to enhance liquidity and investor participation, referencing successful models like Seplat’s listings in Nigeria and London as examples for South African markets.
In addressing technology utilization, Omontuemhen identified South Africa’s advanced technology sector, exemplified by Sasol, as underutilized in Nigeria. He called for a greater adoption of these technologies to enhance gas value capture and production efficiency. He depicted South Africa’s financial sector as a potential source of affordable capital, urging Nigerian investors to tap into longstanding financial resources to foster local production.
Given the inherent resources and substantial population in Nigeria, Omontuemhen believes there is immense potential for collaboration between the two nations as leading African economies. He stressed the significance of private investment in mobilizing capital, expediting supply, and improving operational performance across the energy value chain, suggesting that private-public partnerships could lead to job creation and enhanced local capacity.
In the context of Nigeria’s ongoing oil supply concerns, the NUPRC continues to advocate for future oil block acquisitions among CORAN members, aligning with the vision of promoting domestic refining capabilities and establishing a resilient crude oil supply system. Chief Executive Oritsumeiwa Isan underscored the need for long-term supply contracts to stabilize operational planning in the industry. However, she acknowledged the pressing infrastructure deficits that hinder seamless crude transport, emphasizing the necessity for urgent investment in logistics and supply chain efficiencies.
Through these strategic developments, stakeholders highlight that improved access to crude feedstocks is vital for reducing Nigeria’s dependence on imported petroleum products, strengthening energy security, and boosting local job creation as refining capacities expand.
