- The Petroleum Industry Act is lowering investor risk perception and unlocking new capital flows into African upstream oil and gas projects.
- Industry leaders say policy clarity, operational discipline, and rising energy demand are driving renewed financing momentum across the continent.
The Petroleum Industry Act (PIA) is lowering the risk premium that investors demand for African upstream oil and gas projects. As a result, Africa’s energy sector is attracting renewed financing activity.
This week, senior executives from Oando spoke at the Nigeria International Energy Summit. They said the 2021 legislation improved investor confidence by creating regulatory clarity. They also said investors now see the sector as more stable for long-term capital.
Akinbambo Ibidapo-Obe, General Manager of Commercial at Oando Energy Resources, said policy clarity is reducing investment risk. He said clear regulations help investors evaluate projects with greater confidence. He added that scale, integration, and governance strengthen investment attraction when companies combine them with regulatory certainty.
These comments reflect a broader shift in investor sentiment toward African upstream assets. In recent years, energy transition pressure, regulatory uncertainty, and limited access to global capital markets slowed investment activity. However, policy reforms, stronger operations, and rising energy demand are now restoring momentum.
Recently, Oando expanded its reserve base to almost one billion barrels. Company executives said this milestone strengthens the company’s ability to secure competitive financing. They said reserve growth, combined with operational control and strategic flexibility, improves capital access.
Ibidapo-Obe said scale and integration help companies approach investors. However, he said companies must actively manage risk to secure competitive financing. He said companies must reduce risk premiums to unlock large-scale capital flows.
Meanwhile, Oando Managing Director Ainojie ‘Alex’ Irune called for deeper conversations about capital costs. He said industry players often focus heavily on production targets. However, he said sustainable growth requires stronger focus on financing structure and capital alignment.
Nigeria has set ambitious production targets. However, industry stakeholders say achieving these targets depends on securing patient and aligned capital. Irune said companies must redesign traditional financing models. He said companies must build capital structures that support long-term growth.
Nigeria enacted the Petroleum Industry Act after nearly two decades of legislative delays. Lawmakers designed the Act to improve transparency and fiscal terms in the oil and gas sector. Although implementation challenges remain, investors are already responding positively to the reforms.
Heineken Lokpobiri, Minister of State for Petroleum Resources, reaffirmed government commitment to regulatory reform. He said the government will continue working with industry stakeholders. He said collaboration will help maintain investor confidence and strengthen local capacity.
Across Africa, energy producers are balancing energy security, economic growth, and climate commitments. Global pressure is limiting fossil fuel financing in some markets. However, African governments and companies continue to promote oil and gas development to meet energy demand.
Furthermore, Oando executives said operational performance and governance will determine future capital access. Ibidapo-Obe said operator control allows companies to match projects to suitable capital sources. He said operator control also improves agility and helps companies structure bankable investments.
Oando is implementing a strategy built on disciplined capital allocation, strong operational control, and aligned partnerships. Company executives believe this strategy will support sustainable growth across African energy markets.