In March, the National Oil Corporation of Kenya (NOC) signed a non-equity investment partnership with Rubis energy, joining a growing list of state-owned oil companies on the continent in exploring new financing models.
- •The deal, which required approval from the anti-trust regulator because NOC and Rubis are competitors, will see the latter inject capital, management capabilities and technical expertise to revamp NOC.
- •Across the continent, NOCs are similarly exploring joint ventures, privatisation, divestment, resource-backed loans, and development finance mainly for upstream projects.
- •In Angola and Nigeria, NOCs are preparing to open up to public investments through Initial Public Offerings (IPOs).
“NOCs are adapting to evolving market conditions while securing the necessary capital to sustain exploration and production,” says Ore Onagbesan, Program Director, African Energy Chamber.
Angola’s NOC Songangol will partially privatise by offering up to 30% of its shares to the public.
On the other hand, the Nigerian National Petroleum Company (NNPC) will use the IPO to transition into a fully commercial entity that can raise capital without relying on state funds.
“As Africa continues to navigate the complexities of the global energy transition, the successful execution of these IPOs could set a precedent for other national oil companies on the continent, encouraging broader market liberalization and increased private sector participation in the energy sector,” Onagbesan says.
In addition to exploring the privatisation route, several other NOCs are seeking capital from loans and joint ventures to implement ambitious development projects. NNPC has also leveraged oil-backed loans and has already concluded US$1 billion of a US$2billion production growth structure.
In Mozambique, state-owned ENH is expecting US$4.7 billion loan from the US Export-Import Bank, to add on to the US$3 billion from the Japan Bank for International Cooperation. The financing is meant for the company’s landmark US$20 billion LNG project.
Uganda and Tanzania’s NOCs are seeking an additional $3 billion in debt financing from Chinese lenders, specifically the Export-Import Bank of China and China Export & Credit Insurance Corporation, to fund the East African Crude Oil Pipeline.
In Ghana and Libya, state-owned NOCs have explored the joint venture option to raise capital and leverage technical expertise from the private sector. Both country’s NOCs are either already in or exploring joint ventures with Rome-based multinational Eni S.p.A. Ghana’s GNPC is exploring several JVs with Eni, after the successful development of the country’s two biggest oil fields as a JV with three other oil companies.
