PanAfrican Capital reiterates financial support to upstream sector

The PanAfrican Capital plc, an investment holding company, has pledged appropriate financing of the upstream sector of the economy. Lanre Bakare, head of finance and strategy, gave this assurance at the monthly question and answer session of Lagos Oil Club sponsored by PanAfrican Capital.

He said the company’s primary objective of sponsoring the lecture was to support local indigenous companies, saying the company had focus in investment banking, securities trading, asset management, private equity and registrars services.

George Osahon, director of Petroleum Resources, said at the occasion that upstream independent operation was likely to witness similar growth path as the downstream with all its issues and challenges, including but not limited to respect for the rules of the game.

Delivering a paper on ‘Emerging Independents and Nigeria’s Reserves Growth’ at the occasion, Osahon, who was represented by Emmanuel Bekee, deputy director, Department of Petroleum Resources (DPR), predicted that independents would control about 40 percent to 50 percent of the nation’s crude oil reserves of about 37 billion barrels in the short- to mid-term periods.

Osahon said that while independents currently control only about 10 percent of production at the moment, growth would be rapid in the foreseeable future.

According to him, the cheering development would however put a lot of stress on the regulatory authority, which must therefore be clear about its roles and responsibilities and be in position to ensure compliance without stifling commerce and operational activities.

He however was concerned that only 15 out of the 24 marginal fields awarded in 2003, had gone into production, while a good number of those on production including independents hardly met their obligations including royalties, concessional rentals and flare penalty payments with serious impact on government earnings.

“A few months to the second deadline for the commencement of production from the marginal fields 2003, several asset owners are still locked in inter-partnership squabbles or demanding exorbitant farm-in fees,” he said.

HOPE MOSES-ASHIKE