Danish companies face good opportunities when it comes to participating in the growing oil adventure in West Africa. This is the message from a conference held on 11 March 2008 at Offshore Center Denmark. However, the success is dependent on the Danish companies’ acquaintance with the terms for doing business in developing countries.
On 11 March 2008 Offshore Center Denmark and IFU held a conference in Esbjerg, Jutland, on the oil and gas sector in Nigeria. The participating companies were presented to the possibilities for doing business in Nigeria which is one of the fastest growing African oil countries.
The greatest oil strikes are made in West Africa at present
“At present the African west coast is the area in the world where some of the greatest new oil strikes are made”, says Managing Director Peter Blach from Offshore Center Denmark. “Many other oil producing areas have been searched for oil reserves, but outside the West African coast it is still possible to drill in new areas, and so far this has resulted in many new finds.”
Danish companies have the necessary knowledge
The growing oil industry in West Africa opens op for many opportunities for Danish companies. “Specialised sub-suppliers within a number of niche areas where Denmark possesses a strong position are e.g. in much demand”, says Kasper Svarrer, Investment Manager of IFU. Kasper Svarrer has made an extensive analysis of the opportunities for Danish offshore companies in Nigeria. Especially sub-suppliers within safety equipment and training, production of parts to oil drilling rigs, preventive maintenance of vital parts, electronic equipment, hydraulic and pumps as well as design and engineering.
“Danish companies specializing in these areas and also in other parts of the offshore industry face good business opportunities on the Nigerian oil and gas market where the competition is still very limited,” says Kasper Svarrer. “As the analysis also points out, having knowledge of the special conditions present in Nigeria is, however, a condition for success. Danish companies must e.g. enter into joint ventures with local companies, and it is necessary to know how to best avoid problems in connection with for example corruption, which is still widespread in Nigeria.” IFU enters into joint ventures with Danish companies and can identify and screen possible local partners in this connection, and at the same time grant protection against corruption.
For further information please contact: Kasper Svarrer, tel.: +45 33 63 75 19
IFU (The Industrialisation Fund for Developing Countries) have over the last four decades been sparring partner for Danish companies establishing project companies in poor countries. The Fund provides advisory services and participates financially in project companies on market terms through loans, guarantees and share capital.
The objective of the investments is to stimulate the economic development in poor countries. Thus IFU can only participate in a project company if the investment is thought to have a continuous positive effect on development. Together with the Danish partners the Fund work for the implementation of long term plans for the project companies enabling these to live up to both the legislation of the host country as well as international standards for e.g. environment and human rights. Once the fundamental terms have been met, the Fund does not look at the size of the Danish companies.
Where and how does IFU operate?
With a few exemptions IFU operates in countries with a GNI per capita below USD 2,876. The limit for the investment in a single project company is DKK 50 million. In total IFU invest app. DKK 500 million annually in 30 new project companies on average.