Zenon Petroleum and Gas needs to make strategic move into oil exploration and refinery
Femi Otedola has taken Zenon Petroleum and Gas to its greater heights in the area of petroleum products marketing and distribution. As the president and chief executive officer, he has accomplished tremendous task of making Zenon a household name in Nigeria and beyond.
The global respected capitalistic and flagship journals including Forbes magazine and Wall Street Journal have noted the growth and stellar achievements of Zenon Petroleum & Gas Limited. And Mr. Otedola has been recognized and noted as among the new crop of business executives in the global emerging economies. Otedola was not alone in this recognition, many of African business executives including Aliko Dangote, Nicky Oppenheimer and many others are also in that category.
Zenon Petroleum & Gas can play a vital role in oil and gas industry especially in the areas necessary for Nigeria’s economic growth. Beyond its primary role of marketing and distribution of petroleum products, Zenon can get involved in exploration and refining of oil and gas in Nigeria. With the level of expertise and technology Zenon has acquired over the years, it should be a leap forward for the company to diverse into oil refining.
Zenon has what it takes to make a strategic move in exploration and refining of oil and gas in Nigeria. There are many opportunities in the energy industry especially in oil refining at this point in time. Lately, Nigeria has been having problems with oil subsidy issue with deepening subsidy scandal. All these would have been averted with functioning ingenious oil refineries. The country’s state of affairs can be attributed to the poor and under performances of local oil refineries. With increasing refined oil importation, precious and needed foreign exchanges in billions of dollars are transferred abroad, simultaneously breeding corruption, scandal and cronyism.
Nigeria must encourage local companies to take advantage of the opportunities in the energy industry especially in petroleum refining. It is important that private industries in Nigeria to participate in this industry for needed energy availability. First and foremost, it will bring jobs to our unemployed and underemployed work force. Private industries are more efficient than government in operating business entities due to lack of crony capitalism, in addition massive inefficiency is associated with government run companies.
One can successful argue that if the Kaduna and Port Harcourt refineries were private owned, they would have been more efficiently managed and even profitable. This is why that it is important that local companies like Zenon should step in with its expertise in sound management and show how it is done.
Nigeria‘s answer to the shortage of refined petroleum is to increase the number of indigenous refineries. Zenon can diverse in the energy industry and get into oil refinery. It will be natural path to be taken when it decides to take advantage of the strategic opportunities in oil refinery.
Femi Otedola has already shown his business capability and acumen in the way he took Zenon and made it a trusted, prompt and reliable entity. Otedole is a strategic asset because he understood oil and gas industry and he is a globally recognized top manager. His expertise and experience can be a powerful check on the underlying risk of oil refinery and exploration.
Refinery and exploration of petroleum are high capital intensive especially in Africa, where sources of finance are limited. Notwithstanding, the environment for raising capital are progressively getting better. Many foreign entities and financial institutions can partner with local companies that are promising. Therefore Zenon can breakthrough because it is a globally recognized entity that has shown good prospect and positive balance sheet.
Another major source of raising money is to go public and Nigeria Stock Exchange is becoming a meaningful capital market for raising capital for company’s growth. Otedola’s Zenon should take the advantage in oil exploration and refinery as a diversification pathway for strategic growth and development.