According to him, the company is the local content vehicle in oil prospecting licence (OPL) 282 with Agip, a subsidiary of Italy’s Eni.

Lack of access to sufficient funding has been identified as the major factor hindering the growth of indigenous oil companies in the country.

Bright Ahonsi, managing director Oando Exploration and Production Limited, made this observation at the just-concluded Niger Delta Oil and Gas Conference in Port Harcourt.

He said oil and gas business was an international business and this, according to him, made the sector capital-intensive.

The Oando boss maintained that the capital intensive nature of the business made it imperative for the operators to seek external funding.

“If you want to make an investment of $500-million that will bring returns in the next five years, nobody in this country will assist you because of the long-term nature of the investment. You have to go into the international capital market to look for external funding. Foreign companies have more access to this funding. That is why no Nigerian company can compete with the majors,” Ahonsi said.

He also told the participants at the three-day conference put together by Business Day, in collaboration with Interfax Nigeria PVT Limited that Oando Exploration and Production Limited was a subsidiary of the Oando Group that deals with oil and gas exploration in the Niger Delta.

Ahonsi stressed that the company had two acreages that were as big as acreages operated by the oil majors.

The idea of local content vehicle, originated from Malaysia and Norway when the governments of the two countries observed that the oil and gas business was not benefiting their citizens.

He said the Federal Government introduced the concept to give Nigerians opportunities to participate with the multinationals in oil exploration.

Anthony Eze, managing director, DVCF Oil and Gas plc categorised oil companies into two tiers.

Tier 1 companies, according to him, consist of the production companies while Tier 2 consists of the oil services companies.

Eze said the tier 2 companies could not handle medium-scale contracts due to insufficient funding.

He disclosed that the greatest challenge facing these companies was how to make themselves attractive for the tier 1 companies to award them contracts and also attractive to banks to provide them sufficient funding.

Reacting to the issue of funding, Chike Meme, deputy general manager South-South Skye Bank plc, the sponsor of the conference, explained reasons why banks were reluctant to fund marginal fields.

According to him, the fund seeker was expected to contribute significantly to the project funding as a demonstration of his confidence to the profitability of the venture.

He insisted that if the investor was not ready to stake his resources in the project, the implication was that the project was not viable and no bank would assist under that circumstance.

“We are businessmen that are accountable to our shareholders. We are not Father Christmas. We invest only in profitable opportunities,” he said.

The Skye Bank boss pointed out that the Niger Delta crisis had become the main issue as the country had lost profitable opportunities to the crisis.

According to him, investors perceive the area as being insecure to lives and investments.

Ernest Nwapa, general manager, capacity building, Nigerian Content division of the Nigerian National Petroleum Corporation (NNPC) reiterated the determination of the corporation to pursue policies and programmes that would enhance local content in the industry.

He charged the participants to come up with suggestions that could assist in that direction.

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