Can you give us an overview of AA Holdings and its purpose?

AA Holdings is a proprietary investment company that oversees the assets of my family, which include investments in oil and gas, real estate, agriculture and selected equity investments. We are collaborative in our investment approach, sometimes taking a leading role, either in taking stakes in existing ventures or exploring new prospects within our preferred sectors. In the oil and gas sector, our focus remains primarily on upstream activities, with an eye on midstream ventures, particularly gas processing and domestic distribution to power plants and industries. We foresee significant growth in Compressed Natural Gas (CNG) demand locally and currently, one of our portfolio companies, Platform Petroleum, is looking to expand into that space. Platform Petroleum processes 3 million cubic meters of gas for power generation and CNG usage, with plans to increase its capacity in the immediate term. Additionally, Platform produces LPG and propane for domestic and industrial consumption, underscoring our commitment to the midstream gas sector.

What is your analysis of the current state of Nigeria's upstream sector?

The upstream sector in Nigeria is currently undergoing a challenging transition. 10 years ago, there were clear signs that multinational companies, which had been operating in the country for 60 years, were gradually withdrawing from onshore and shallow water operations. This transition should have been smoother. Regulators needed to identify capable entities to take over and ensure a seamless transition, but that did not happen. As a result, we have witnessed a period of 5 to 8 years where multinational companies have been withdrawing, and independents have been gradually taking over. If we examine the production figures, with about 1.3 million bpd, excluding 600,000 bpd from deepwater, we are left with only 700,000 bpd from onshore operations. This is a significant decline from the previous level of 2 million bpd. As these transactions settle and independents take charge, I anticipate a surge in new investments by these independent companies. It is conceivable that onshore and shallow water production could reach 4.5 million bpd, possibly in the near term. Additionally, there are plans for deepwater projects, particularly by Shell, which could bring deepwater production back to levels of 700,000 bpd, potentially leading to a return to previous production levels within the next three years. Therefore, much of this production increase will likely come from offshore operations.

Are marginal field producers pivotal to Nigeria's future oil production?

Marginal field producers play an essential role in capacity development for independents to evolve into major players. While their individual contributions may be modest, the experience gained contributes to the growth of indigenous companies, as seen in the transition from marginal to significant operators like Platform Petroleum. Platform Petroleum's journey from a marginal field operator to a significant player in the upstream sector demonstrates the importance of marginal fields in nurturing indigenous talent and fostering industry growth. Independents, having learned from past experiences, are better equipped to manage community relationships effectively. For instance, Platform Petroleum's longstanding presence in local communities has contributed to positive social and economic outcomes, demonstrating the importance of community-centric approaches in the oil and gas industry.

What obstacles exist in achieving regional inter-African energy supply chains?

The primary obstacles lie in governmental involvement, as seen in previous infrastructural projects hampered by political issues. However, the private sector is poised to drive such initiatives, exemplified by successful ventures like Dangote Cement's expansion across African markets. By fostering willing buyer-seller relationships, commercial ventures can transcend governmental hindrances. For instance, the West African Gas Pipeline project has faced challenges due to political disagreements among the governments involved, highlighting the need for private sector-driven initiatives. Nonetheless, the potential benefits of regional energy supply chains and inter-African energy trading far outweigh the challenges, making them worthwhile endeavors for sustainable energy development in Africa.

What are AA Holdings' priorities in the coming years?

AA Holdings will continue investing in the energy sector, particularly in partnership with our portfolio companies, focusing on upstream and midstream opportunities. Additionally, we will expand our agricultural ventures within Nigeria, aligning with our long-term growth strategy. Overall, AA Holdings remains dedicated to pursuing opportunities that drive sustainable growth and create value for stakeholders.