Aradel Boss Calls for Cash Flow Focus, Stronger Governance in Nigeria’s Oil Sector
Industry Players Urged to Tackle ‘Above-Ground’ Risks for Growth
The Managing Director of Aradel Holdings Plc, Mr. Gbite Falade, has urged indigenous oil and gas companies to prioritise cash flow generation and remove operational bottlenecks that inflate costs and hinder production. He highlighted this strategy as key to Aradel’s strong financial performance and successful listing on the Nigerian Stock Exchange.
Speaking at the 8th Nigeria International Energy Summit (NIES) in Abuja, Falade noted that Nigeria’s oil sector faces a critical challenge: a gap between the country’s technical allowable oil production of 2.2 million barrels per day (bpd) and its actual output of 1.7 million bpd. He attributed this shortfall to “above-ground challenges”, including regulatory hurdles, infrastructure limitations, and market inefficiencies.
Unlocking Cash Flow: A Key to Success
Falade emphasized that addressing these challenges is the fastest way for oil companies to boost revenue and enhance industry-wide profitability.
“Cash generation is very key. We have assets to develop, but we also have a business to run, and that business rises and falls on cash. Everything we can do to remove the above-ground challenges that limit cash generation should be a priority,” he stated.
Aradel’s success, he explained, was driven by diversifying market access and creating multiple evacuation routes for its oil and gas products. This reduced dependency on a single distribution channel, ensuring steady revenue streams and liquidity for further development.
The Role of Strong Corporate Governance
For local oil firms considering a stock market listing, Falade stressed the importance of corporate governance in attracting investors.
“You can’t do that without very strong corporate governance because that’s the strongest signal to investors that their investment is safe. You need a solid track record, and all of that put together will help in that journey,” he said.
Expanding the Nigerian Stock Market for Economic Growth
As Nigeria targets a $1 trillion economy by 2030, Falade called for more energy companies to be listed on the stock exchange, noting that the Nigerian market’s current capitalization is only $45 billion.
“Nigeria cannot achieve a trillion-dollar economy without a stronger stock market,” he warned.
The Road Ahead
Falade’s message is clear: for Nigeria’s oil sector to thrive, local firms must focus on sustainable cash flow, tackle operational inefficiencies, and embrace sound corporate governance. His call to action aligns with broader national economic goals, reinforcing the need for strategic reforms and industry-wide collaboration.
What are your thoughts on Aradel’s approach to industry growth? Share your views in the comments!
Industry Players Urged to Tackle ‘Above-Ground’ Risks for Growth
The Managing Director of Aradel Holdings Plc, Mr. Gbite Falade, has urged indigenous oil and gas companies to prioritise cash flow generation and remove operational bottlenecks that inflate costs and hinder production. He highlighted this strategy as key to Aradel’s strong financial performance and successful listing on the Nigerian Stock Exchange.
Speaking at the 8th Nigeria International Energy Summit (NIES) in Abuja, Falade noted that Nigeria’s oil sector faces a critical challenge: a gap between the country’s technical allowable oil production of 2.2 million barrels per day (bpd) and its actual output of 1.7 million bpd. He attributed this shortfall to “above-ground challenges”, including regulatory hurdles, infrastructure limitations, and market inefficiencies.
Unlocking Cash Flow: A Key to Success
Falade emphasized that addressing these challenges is the fastest way for oil companies to boost revenue and enhance industry-wide profitability.
“Cash generation is very key. We have assets to develop, but we also have a business to run, and that business rises and falls on cash. Everything we can do to remove the above-ground challenges that limit cash generation should be a priority,” he stated.
Aradel’s success, he explained, was driven by diversifying market access and creating multiple evacuation routes for its oil and gas products. This reduced dependency on a single distribution channel, ensuring steady revenue streams and liquidity for further development.
The Role of Strong Corporate Governance
For local oil firms considering a stock market listing, Falade stressed the importance of corporate governance in attracting investors.
“You can’t do that without very strong corporate governance because that’s the strongest signal to investors that their investment is safe. You need a solid track record, and all of that put together will help in that journey,” he said.
Expanding the Nigerian Stock Market for Economic Growth
As Nigeria targets a $1 trillion economy by 2030, Falade called for more energy companies to be listed on the stock exchange, noting that the Nigerian market’s current capitalization is only $45 billion.
“Nigeria cannot achieve a trillion-dollar economy without a stronger stock market,” he warned.
The Road Ahead
Falade’s message is clear: for Nigeria’s oil sector to thrive, local firms must focus on sustainable cash flow, tackle operational inefficiencies, and embrace sound corporate governance. His call to action aligns with broader national economic goals, reinforcing the need for strategic reforms and industry-wide collaboration.
What are your thoughts on Aradel’s approach to industry growth? Share your views in the comments!