Pan-African visionFebruary 1, 2017
TOGY talks to Samuel Dossou-Aworet, chairman and founder of Petrolin, about the company’s Backbone project, attracting financing and investors, and the foundation of the APPA.
Petrolin was founded in 1992 and has exploration and production activities in Africa and the Middle East, as well as trading and processing operations in West Africa. The company is also developing infrastructure projects in the region and is currently investing in the Backbone project in Benin and Niger.
• On the Backbone project: “The objective of the Backbone project is to connect countries such as Niger, Burkina Faso, Benin, Nigeria, in terms of infrastructure and also business links. That is the strategy, always keeping in mind the idea of pan-African co-operation and shareholding.”
• On financing: “There are plenty of financing options available, with funds coming from the US, Europe, China, etc. As far as you can make available bankable projects, this is the reality.”
• On project management: “You need first-class services providers and advisers so that when the time to attract investment comes, investors have the insurance that top-level companies and people have laid the foundation for its development.”
• On the creation of the APPA: “That was a first step towards the empowerment of African countries in the hydrocarbons industry, and it had a positive effect in the development of African oil and gas throughout the years.”
TOGY goes in depth about the need for a pan-African perspective on the hydrocarbons industry, the latest developments of the company’s assets, and the importance of major infrastructure developments for regional development. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Samuel Dossou-Aworet below.
In which sectors and countries is Petrolin active in Africa?
I created Petrolin in London in 1992, with an affiliate in Geneva. Now we operate several companies in a broad range of countries across the continent. We are an indigenous entity and that is what we have been promoting: the role of indigenous companies in driving industry growth across the continent.
We have exploration and production assets in Nigeria, namely in OML 34, 53 and 54 but also in Gabon and other countries such as the Democratic Republic of Congo, Malawi, Burundi, Tanzania and Zambia.
Altogether, have interests in 15 countries in Africa throughout the oil and gas value chain – upstream, midstream and downstream. We have additional investments in sectors such as infrastructure and telecommunications.
We have been growing fast, one major factor being the acquisition in September 2012 of a 45% stake of the onshore OML 34 in Nigeria through our indigenous affiliate company ND Western. We acquired this producing block for USD 600 million from a Shell, Total and Eni tender.
What have been the latest developments at OML 34?
NNPC [the Nigerian National Petroleum Corporation] owns the remaining 55% of the licence and has been operating the block through its subsidiary NPDC [the Nigerian Petroleum Development Company]. In June 2016, we signed an agreement for ND Western to assume the day-to-day management and operations of OML 34, so we have been focusing on this transition.
Even though that move coincided with a temporary closing of the Forcados terminal, with the reopening of the latter we are going to see a dramatic upswing in terms of production and delivery of oil and gas to the domestic market as well as the West African Gas Pipeline.
We believe that by the beginning of 2017 the transition will be fully completed. We work very closely with NPDC, given the strategic importance of the asset.
You are developing the Backbone project in Benin and Niger. How has this been progressing?
Our diversified businesses include the infrastructure sector. We put together a truly pan-African and transnational initiative: the Backbone project, a strategic and innovative infrastructure project comprising a deepwater port, dry ports and an international airport, all interconnected via a rail network.
The project comprises a deepwater oil, mineral and commercial port at Sèmè-Podji in Benin, about 12 kilometres from Cotonou and 100 kilometres from Lagos in Nigeria. Its location gives it access to strategic markets. The port will be connected to Cotonou via a standard-gauge rail line, and from there the railway goes north to Parakou in Benin. The project also includes dry ports in Cotonou, Parakou and Dosso, and the international airport of Sèmè-Kraké, which will serve the southern Nigeria and Benin passenger and freight market. The railway already exists from Cotonou to Parakou, and the project extends it to Niamey in Niger. Currently, we are building the dry port in Parakou, which is almost complete.
The objective of the Backbone project is to connect countries such as Niger, Burkina Faso, Benin, Nigeria, in terms of infrastructure and also business links. That is the strategy, always keeping in mind the idea of pan-African co-operation and shareholding.
How are such large infrastructure projects put together?
To realise this objective, you need first-class services providers and advisers so that when the time to attract investment comes, investors have the insurance that top-level companies and people have laid the foundation for its development.
The railway rehabilitation and extension project took the form of an international a tender launched by Niger and Benin, the two shareholders of the railway. We won this tender, and for the preparation of our submission we worked with international companies with great experience in the sector, RITES, an affiliate of Indian railway, the number one in the world for the railway business, and SNCF of France.
For the petroleum and mineral port, we worked with the Port du Havre in France and Roche in Canada, two important advisers on this project. The purpose is to get first-class advice. The process to get the Environmental Compliance Certificate from Benin authorities is already launched.
Once you put together a viable project and team, the financing options come. That’s what happened with OML 34 and this is how we were able to raise the necessary funds for this investment.
There are plenty of financing options available, with funds coming from the US, Europe, China, etc. As far as you can make available bankable projects, this is the reality. So when these investors see a company with a good track record, they come. Good governance, transparency and good management are the essence of a project’s success.
The development of indigenous expertise is of great importance for our company. This is why we employ top-level local people that have reached very high levels with the likes of Shell, Total, Exxon, etc. and we enhance their experience and knowledge so the domestic industry can benefit from their expertise.
What role do indigenous African companies have to play in the development of the region’s hydrocarbons industry?
At our company’s level, our strategy has always been pan-African, based on our experience and strong network on the continent and beyond.
Throughout my career, I have personally always pushed for pan-Africanism, for African countries to work together. Back in the 1980s, when I was Governor of OPEC for Gabon, together with my counterparts in Algeria, Nigeria, Libya and other African countries we worked together to create something similar to OAPEC in the Middle East countries, which could articulate their ideas and strategy. So we went in the same direction and extended invitations to African producing countries such as Angola, Congo, Cameroon, etc.
Our efforts resulted in suggesting to some African ministers of oil the creation of the African Petroleum Producers’ Association (APPA) in Lagos in 1986. That was a first step towards the empowerment of African countries in the hydrocarbons industry, and it had a positive effect in the development of African oil and gas throughout the years.
This concept was followed by the Petrolin Group to play the role of a strategic partners for Energy Africa, Tullow, ND Western, Seplat, etc.
Today you can see a lot of African indigenous companies and people that have accumulated experience and knowledge of the industry. These companies and people bring real value to the industry on the continent, whether they operate with foreign partners or not.
At the level of both companies and people, local actors show a better understanding of the governmental framework as well as local communities and can set up a favourable framework in which to operate. These actors bring a lot of added value to international companies, thereby building win-win partnerships for both local and international companies.
For more information on Petrolin, such as its activities in OML 34, and exclusive interviews with APPA executive secretary Mahaman Laouan Gaya, see our business intelligence platform TOGYiN.
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