Diekola Onaolapo, the managing director of Eczellon Capital, talks to TOGY about alternative finance methods being implemented in Nigeria’s oil and gas industry. Eczellon is an investment bank operating across the African continent.

• On financing: “Access to finance has become one of the key challenges faced by many industry participants, especially the indigenous, mostly mid-cap/independents in the E&P upstream sector.”

• On debt: “Given the perceived culpability of local banks in unbridled creation of debt facilities to local oil companies during the boom, now regulations have become stiffer, further drying up debt funding for companies and deepening their crisis. Companies have had to restructure their loans as revenues no longer match debt repayments.”

• On innovation: “While the issues persist, and funding oil and gas deals through traditional approaches remains a challenge, we have been seeing a number of innovative structures.”

• On investment: “While investor’s plain vanilla – simple returns and risks – sentiments are not the only hindrance to raising new capital, given such political issues like the lingering non-passage of the Petroleum Industry Governance Bill, bridging gaps to investment with appropriate financing structures will go a long way to ensuring that products continue to flow.”

Source: TOGY