Africa’s Top 250 Companies: Oil and Gas

There are six African oil and gas companies in our Top 250 this year, one up from last year but this is a significant reduction on the nine listed in 2009.

Aside from Sasol, the others are Sidi Kerir Petrochemicals and Alexandria Mineral Oil Company of Egypt, Morocco’s Afriquia Gaz and two Nigerian firms: African Petroleum and Total Nigeria. African Petroleum returns to our table after dropping out last year. Those relegated from the Top 250 over that period are all Nigerian firms but there are signs that this trend could be reversed over the next few years.

Discussing the matter at The Economist World in 2014 Summit in New York, the Minister of Petroleum Resources, Diezan Alison-Madueke (above), said: “Nigerians across the entire spectrum of the downstream have come into areas of fabrication of small-scale service parts, fabrication plants, pipe mills, and of course various service projects and jobs that protect in a very critical way operations of the majors in the oil and gas sector. Now this had hitherto been the presence of subcontractors to the majors, who were mostly foreign. Now Nigerians get first consideration in most areas of the oil and gas sector.”

She added: “In terms of the upstream, again we have given a lot of support to Nigerians to up the ante, to actually come in and take a stake in the upstream sector. Now it’s a major preserve of the multinationals, or has been so far, but we begin to see Nigerian indigenous operators and owners coming into the upstream. We are seeing – supported by government – a much higher incidence of indigenous operators coming into the upstream sector.”

Companies such as Seplat and Shoreline Natural Resources are backed by Nigerian businessmen who have made their fortunes in other sectors and are now keen to invest openly in oil production. The fact that several international oil companies are keen to sell their Niger Delta assets should enable such firms to expand relatively quickly.

As African Business went to press, Seplat has successfully listed  25% of its equity on the London and Lagos stock exchanges just five years after it was founded. The firm intends to use the money as a war chest to buy new upstream assets. It is already involved in negotiations to buy assets currently held by Shell Petroleum Development Company (SPDC), US giant Chevron and other established producers.

Seplat founders Ambrosie Bryant Chukwueloka Orjiako and Austin Avuru hope to raise more than $500m in the process, giving it a market capitalisation of $2bn in the process. This would have made the company the 60th biggest listed firm in Africa, if it had been included in this year’s Top Companies survey.

Seplat will become the first Nigerian company to have its ordinary shares dual listed on both London and Lagos. However, the company will not seek a premium listing in London, as this would require it to move its headquarters to London. Chairman Orjiako said: “We are a Nigerian company and very proud of that fact. We would like to remain a Nigerian company.”

The scarcity of African oil companies in our Top 250 indicates that the majors’ strong grip on African oil and gas assets remains as strong as ever. At the same time, African state oil companies such as Sonangol and Sonatrach, show no sign of being even partly privatised.