A developed capital market has been identified as a key factor in African oil and gas companies’ success among other contributors. An Oil and Gas expert Peter Ntephe, who is also Chief Executive Officer of ERHC Energy, stated this while speaking with newsmen in Houston, Texas, USA.
According to him, inability to access finance is a major hindrance to the success of many operators in the sector, adding that the African Capital market is yet to understand the dynamics of pure exploration.
In his words, “It is very difficult to generate finance in Africa for pure exploration. “People don’t understand the dynamics of pure exploration. So, the first thing is we walk into an investment banker’s office and say we need so much to do so much. “They ask how many barrels of Oil you are producing. So, it is very difficult to generate such money. Our Stock Exchanges in Africa cannot yet handle the money issues and are not conversant with exploration models.
“So, invariably you have to raise your money in the metropolis as it is called- the western Capitals of Capital such as London, New York, Toronto and then as an American company with an African face, the truth is you face a disadvantage,” he said.
Speaking further, Ntephe said “We need to develop our capital market. We need to develop capacity not just in terms of knowledge but technological capacity to run operations, financial capability to finance the operation and that is the only way indigenous firms can compete on a level-playing field because they are already at a disadvantage, trying to raise money internationally.
“If we had a scenario where African companies are favoured just because it is home-based, then a level playing field would have been generated,” he added.
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