DAVOS, Switzerland - Nigeria's top fuel retailer and gas distributor Oando Plc (UNIP.LG) is confident it will secure financing for ambitious expansion plans and says the projects are profitable at current oil price levels.
As projects elsewhere are scrapped or delayed because of the economic crisis and weak prices, Group Chief Executive Wale Tinubu told Reuters the cost of oil exploration in Nigeria ranged from $5 to $25 a barrel.
It was clearly profitable at prices of around $40, although he would prefer higher prices.
"A reasonable price for oil would be $50-$70," he said late on Friday, adding to an ongoing debate on the right level.
BP (BP.L) Chief Executive Tony Hayward on Thursday said an oil price of between $60 and $80 a barrel was appropriate.
Earlier in the week, the head of Nigeria's state oil firm the NNPC said oil prices needed to stay above $40 a barrel to keep deep offshore oil production and exploration economically viable in Nigeria.
While oil has plunged by more than $100 from an all-time high of nearly $150 a barrel in July last year, other commodities, such as steel, have also dropped sharply in value.
Tinubu said it was too early to say whether that would lead to lower production costs.
Equally, he said rig rates had not declined in the difficult Niger Delta swamps, where his company has expertise.
As part of its goal to be an integrated company, Oando, which has three rigs, is diversifying into energy services and is in the process of finalizing a rig contract with Italian company Agip (ENI.MI).
Earlier this month, it said it aimed to make more acquisitions to grow its upstream business and produce 100,000 barrels per day of crude oil by 2013.
The group, which sells or distributes one in five liters of petroleum products in Africa's most populous nation, also said it was targeting 300 million barrels of proved and probable reserves over the same period.
Oando is funding its growth through a mixture of debt, equity and retained earnings.
While analysts have said it will become increasingly hard to raise cash, Tinubu has used his time in Davos well to meet financiers, as well as fellow CEOs, and said his company had no problems obtaining credit.
"They are not going to seek new clients, but ... we have a first class record with the banks," he said.
As projects elsewhere are scrapped or delayed because of the economic crisis and weak prices, Group Chief Executive Wale Tinubu told Reuters the cost of oil exploration in Nigeria ranged from $5 to $25 a barrel.
It was clearly profitable at prices of around $40, although he would prefer higher prices.
"A reasonable price for oil would be $50-$70," he said late on Friday, adding to an ongoing debate on the right level.
BP (BP.L) Chief Executive Tony Hayward on Thursday said an oil price of between $60 and $80 a barrel was appropriate.
Earlier in the week, the head of Nigeria's state oil firm the NNPC said oil prices needed to stay above $40 a barrel to keep deep offshore oil production and exploration economically viable in Nigeria.
While oil has plunged by more than $100 from an all-time high of nearly $150 a barrel in July last year, other commodities, such as steel, have also dropped sharply in value.
Tinubu said it was too early to say whether that would lead to lower production costs.
Equally, he said rig rates had not declined in the difficult Niger Delta swamps, where his company has expertise.
As part of its goal to be an integrated company, Oando, which has three rigs, is diversifying into energy services and is in the process of finalizing a rig contract with Italian company Agip (ENI.MI).
Earlier this month, it said it aimed to make more acquisitions to grow its upstream business and produce 100,000 barrels per day of crude oil by 2013.
The group, which sells or distributes one in five liters of petroleum products in Africa's most populous nation, also said it was targeting 300 million barrels of proved and probable reserves over the same period.
Oando is funding its growth through a mixture of debt, equity and retained earnings.
While analysts have said it will become increasingly hard to raise cash, Tinubu has used his time in Davos well to meet financiers, as well as fellow CEOs, and said his company had no problems obtaining credit.
"They are not going to seek new clients, but ... we have a first class record with the banks," he said.
