24 March 2014, Lagos – Group Managing Director/Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, has said that the bank is working with indigenous independent and small producers in the oil sector to improve on their governance structure.
This, according to the Access Bank boss is to enable the firms attract the much needed financing to drive their operations and develop the sector.
A statement released at the Nigerian Oil and Gas Exhibition and conference held recently, quoted Wigwe to have also disclosed that the bank had realised the challenges confronting indigenous operators.
According to him, Access Bank would help the operators address the challenges by strengthening their governance structure, as well as helping to address the issue of infrastructure in the sector.
He explained that despite the challenges, Nigerian banks have built capacity over the last 15 years, and are working together with international institutions to support the sector.
He said local banks working together with international institutions have been able to support much larger projects.
“There are several problems that have to do with the companies themselves. The first and most important one is governance.
“Most of them lack the corporate governance structure to support that kind of debt and even when they do have the structure, there are issues around capacity and how much equity they have built in and there are also issues of those that are growing a bit too rapidly and the capacity to manage their growth,” he further said.
He however noted that the issue about governance was about the appropriate systems, processes, procedures, controls to ensure that the business remain sustainable.
Wigwe pointed out that if a company is growing very fast and does not have the appropriate framework, does not have the right board structure, does not have people with the right skills on the board, over time, it will not be competitive and would not continue to exist.
“However, what some of us have done in our own institution is to create a structure that has helped to support the governance framework of those we chose to support.
“There are also issues that have to do with infrastructure around the sector. If you want to support somebody, what is the nature of the infrastructure for the evacuation of the products. This is a topical issue,” he added.
He expressed confidence on the viability and bankability of indigenous oil companies, stating that some of the companies have put in place the right structures from the governance standpoint, while a number of them have also built up enough equity which they are deploying into the business.
– This Day