Weston Oil And Gas Fund For Industry Players

The Weston Capital, in view of the financial constraints facing local industry operators and the support for local content participation have launched a mutual fund to provide investment advisory and asset management services for industry operators.

The fund, which is licensed and regulated by security in the exchange commission, Weston Capital will provide support for businesses in raising capital both equity and debt funding and offers general corperate finance and investment services.

The Weston oil and fund is an open-ended fund and it consist of an unlimited number of shares cat initial price of 20pesewas per share.

For the start-up, the fund is offering 500,000 shares and this period is classified as initial public offering however, the minimum investment purchase of shares under the IPL is set at 250 shares therefore, a minimum investment of CH50.

The Executive Director of Weston group, Rex Kontor said “if you want to play in this fund, the minimum number of shares at 20pesewas each that you have to buy is 250, so with as little as CH50, you could be an investor in the oil and gas sector through the Weston oil and gas fund.”

He indicated that the issuance of the 500,000 shares has begun and will end in 10th September, 2014.

According to him, a further issuance of 250,000 shares is expected in the following eleventh month after the IPL period.

“What we doing is concentrating on the issuance of 500,000 with the next three weeks which is the window that has been granted by the regulator. Once we successfully issue these 500,000 shares, we are looking at a further issuance of 250,000 shares within the next 12months essentially,” he noted.

The Executive Director mentioned that, in a year from now, they expect the fund would have mobilized in excess of CH50million through share issuances.

Meanwhile, in asset allocation, the fund will invest a minimum of the portfolio of 5% of its total assets in selected equities and publicly traded companies listed on the stock market.

The fund shall also invest a minimum of 20% of its total assets in bonds issued by Blue Chip companies and other carefully selected SMEs managing risk for their shareholders as well as government’s bonds.

Rex Kontor said they chose to launched the fund because there were concerns that the advent of oil and oil in 2007 was going to provide a lift in our welfares interms of wealth creation but few years down the line, the feedback from the Ghanaians were very disappointing and that people have not seen direct impact on their livelihood.

“The share nature of the oil and gas industry is so capital intensive that it’s difficult for individuals to invest so the oil sector is dominated by foreign multi-nationals and we needed to think about how to resolve the issue,” he wept.

According to him, government introduced the Local Content Act to enable Ghanaian companies acquire the technical expertise but that bid has been missing.

He has therefore urged the private sector to take advantage of the area of financial enabling which drives the sector.

Mr. Kontor explained that the fund isto create values for its investors by investing in the oil and gas sector in Ghana, the Weston oil and gas funds intends to take advantage of the current economic growth opportunities in the oil and gas sector by acquiring, developing and holding a portfolio of financial instruments in that sector that will ultimately lead to superior returns for our shareholders.

He added the fund shall encourage and assist all distribution companies or marketing companies and other businesses to issue cooperate bonds.

The fund shall invest a minimum of 30% of its total assets in fixed income money markets securities such as treasure bills, fixed deposits and commercial payments.

The fund shall encourage and assist BDCs and support service providers to issue commercial papers and other fixed income instruments.

Their target market, Mr. Kontor indicated comprised the retail individual investors, institutional investors like the pensions funds, provident and endowment fund managers, CSOs budget for companies operating in the sector and others.

According to him, in May, 29th last year, the government of Ghana approved the Plan of Development (POD) to projects by paving way for the further 4.5 billion dollars to be invested in the oil and gas sector

The question is “can Ghanaian companies participates in accessing the 4.5billion dollar contracts?” This is where the relevance of this fund comes in” he noted.

In terms of production levels, the new FPSOs that currently undergoing installation will add up about another 80,000 barrels per day presenting 80% workdone on the jubilee oil field to increase production.

He noted the import of the fund is to highlight the growth potential in the industry and the fact that Ghanaian companies’ needs are the financial enabling to be able to participate in the wealth creation of the industry.

Mr. Senyo Kwasi Hosi, CEO of the chamber of bulk oil distributors said Ghanaian’s high expectation of the impact of the Oil and Gas sector on the economy will ever remain an expectation reaching no realisation unless the knowledge, participation and infrastructure gap is significantly bridged and driven by the Ghanaian.

Over the last 2 decades, he added that, over USD1 billion has been invested in infrastructure for the downstream sector by the Government and Private sector.

Unfortunately, according to Mr. Hosi, engineering and construction skills applied in these investments continue to rest with foreign contractors.

“It stands to reason that after 54 years of taking a major step in the Oil and Gas infrastructure, we as a people should be leading the charge on our shores at least,” he stated.

The CEO of the chamber of bulk oil distributors pointed out that equity and debt funding continues to be a challenge for the industry.

The introduction of specialised products, he mentioned the Weston Oil and Gas Fund is timely and necessary to drive the growth of the entire sector.

“So much value is lost out of the economy as key sectors continue to have less local participation. It is my expectation that the remarkable value often lost will be retained on our shores as the WOG fund positions itself as a strategic driver for investments in the oil and Gas sector,” he posited.

He explained that the Ghanaian market has grown its consumption of refined products at an effective rate of 12.7% per annum over the last 5 years and 3.6% between 2012 and 2013.

”Therefore, he it is time for the Ghanaian entrepreneur to realise how well positioned we are to turn Ghana into an oil and gas downstream hub for West Africa,” he posited.

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