African Energy Future Depends On Competitive Local Operators, Says Ashgrove CEO

Africa must build strong and competitive indigenous energy companies to accelerate economic development and compete in global markets, Mahmud Tukur, group chief executive of Ashgrove, said.

Speaking during a panel discussion at Africa Oil Week titled “The Future of the African Operator: Building the IOCs of Tomorrow”, Tukur said continued reliance on foreign capital and expertise would not deliver long-term value for the continent.

Governments, investors and industry should instead support local companies with the governance, technical expertise and financing needed to undertake complex upstream projects, he said.

“The continent can only compete internationally by deliberately building strong indigenous operators that can grow into internationally competitive companies,” Tukur said.

He said African energy companies would need to be innovative, digitally enabled, well financed and well governed to meet international performance standards and compete for larger projects.

Tukur also highlighted human capital development, including leadership development, skills training and greater participation by women, as important to building companies capable of delivering large-scale projects and retaining more value within Africa.

He said the development of stronger indigenous operators was part of a broader goal of increasing Africa’s energy sovereignty by building companies capable of attracting investment, supporting industrialisation and retaining more economic benefits on the continent.

Stronger balance sheets and corporate governance could also enable African companies to secure a larger share of upstream and midstream contracts, potentially changing deal structures and the allocation of project risks, Tukur said.

He said investment in skills and greater diversity, particularly increased participation by women, would be essential to improving the competitiveness of African operators and their ability to deliver projects.

Technology and digitalisation would also be important competitive differentiators for emerging African operators, he said, citing the adoption of digital tools and innovative business models.

Tukur called for effective policies, clearer local-content frameworks, capacity-building programmes and strategic public-private partnerships across the energy value chain to accelerate the development of homegrown international oil companies (IOCs).