Home Feature The rise of the Africa’s independent operators

The rise of the Africa’s independent operators




It is a sign of the increasing maturity of African independent operators that local players have the confidence to take on the development of their own natural resources. African independents are increasingly active, picking up assets from IOCs divesting non-core African portfolios.

We identify three drivers. First, the maturity of the Majors’ legacy African portfolios. With these companies under increasing pressure to focus on low-carbon, low-cost opportunities, divesting from late-life, carbon-intensive assets in locations including Nigeria, Gabon and Congo fits with their strategies.

Second, African governments are increasingly supportive of local independents accessing the region’s substantial resources. Favourable tax terms for new entrants and marginal assets have helped boost the emergence of African independents. Conducive regulatory environments in turn lead to greater economic diversification, job creation and growth in domestic industries. The Dangote refinery development in Nigeria, which is set to transform the regional oil products sector, is just one example.

Third, while financing remains a significant hurdle, African independents are increasingly demonstrating their ability to navigate above-ground challenges which have deterred IOCs from maximising the potential of their assets. A local “licence to operate” and partnerships with international investors are helping African companies access capital and the technical expertise required to acquire and develop assets.

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