iMbokodo’s transformative vision for oil and gas in South Africa
Meridian Capital Limited, invests in companies and people with a successful track record from various sectors. As a part of the investment portfolio, the Company seeks to invest in early-stage oil and gas exploration companies with quality management teams and assets. One such investment is in iMbokodo Exploration and Production. A South African company with a difference – a majority black female management team led by the newly appointed Chair, Sonja De Bruyn.
Over the last four years, much has happened behind the scenes at iMbokodo, the majority women-led and majority black-owned South African oil and gas group. iMbokodo, from the Zulu word meaning ‘solid rock’, is recognised for its concrete approach that aims to have a positive impact in South Africa and works to build trusted partnerships with reputable IOC’s that believe in sharing the value of oil and gas assets in South Africa and developing a sustainable model that also creates value for the local community.
The Company’s geographic focus has largely aligned with the progress and development of the broader sub-Saharan Africa oil and gas sector, which has been significantly reshaped over the last few years by several major discoveries offshore of both South Africa and Namibia.
It also coincides with the deepening energy crisis in South Africa, a crisis that will require a range of solutions to overcome, including a Just Energy Transition which is already underway. Right now, it has never felt more important to be part of the solution to South Africa’s energy crisis.
Since the Company’s inception in 2019, is has gained an interest in three highly prospective onshore assets in eastern South Africa. The economic potential of these properties is clear, neighboured by Rhino Resources, Kinetiko Energy and Renergen, whose assets also contains the highly sought-after commodity of helium.
iMbokodo has not only successfully grown and consolidated its position as a burgeoning African oil and gas player, but has also spearheaded female empowerment in one of the least gender-diverse sectors globally.
Sonja de Bruyn, Chairperson of iMbokodo, believes that she has best team in place to deliver meaningful and transformative value-creation in the sector. While it was founded as a female empowerment company, the Company has taken steps to reinforce its commitment to gender diversity with her recent appointment as Chairperson, alongside a team of experienced black women who are also currently occupying the lead geologist and chief financial officer roles.
Sonja’s experience of over 25 years in investment and finance, as executive director at WDB Investment Holdings leading several of their acquisitions, as a co-founder of women-owned and managed investment firm Identity Partners, and also at Ethos Private Equity, where she was responsible for diversity and transformation; has shown her how important building a diverse team is for effecting outcomes. This is at the heart of the Company’s mission and why they believe in what is being built at iMbokodo.
At iMbokodo there is a responsibility to the people and communities where oil and gas operations take place. The Company aims to ensure all their participation has a growth and development focus beneficial to local communities with 10% of iMbokodo’s future share ownership structure allocated to the historically disadvantaged communities, to enable them to achieve their full potential in participation in the oil and gas arena.
The whole team’s expertise will enable iMbokodo to not only secure the appropriate financing required but also to unlock the most prospective investment opportunities. The Company recently secured a funding facility of US$12 million from Meridian Capital Limited, a significant global investor in various offshore and onshore oil and gas opportunities, highlighting the confidence that exists in the business, whilst simultaneously providing the firm capital required to enter a highly prospective asset on the West Coast of South Africa.
iMbokodo’s vision is to become the leading upstream company offering services to the oil and gas sector, impacting not just the businesses they work with, but with the intention to create meaningful and transformative partnerships with the local communities and becoming the BEE partner of choice for the South African / African oil and gas industry.
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Meridian Capital Limited is an international investment firm headquartered in Hong Kong with a diversified investment portfolio spanning consumer goods, real estate, hospitality and natural resources. Meridian Capital Limited seeks out global investment opportunities with favourable long-term fundamentals. They operate in emerging and frontier markets, often in partnership with industry leaders and talented entrepreneurs. Meridian Capital Limited carefully select their investments to ensure that they have a broader social, developmental or environmental impact in their sector and operating environment.
iMbokodo Exploration shuffles leadership, eyes expansion
Sean Lunn is heading out from his role as iMbokodo Exploration and Production chairman, handing the reins over to financial hotshot Sonja De Bruyn as the company prepares to sign up new acreage.
Lunn remains involved with iMbokodo, De Bruyn said, as the company works on two onshore projects and eyes further expansion.
Lunn will stay on the board and is a key shareholder and participant. “The restructuring reinforces our commitment to wanting women to go into spaces that are important to the economy,” De Bruyn said. The new chair comes from 25 years of work, primarily in the financial services sector.
“Most of my career has been about gender equity and black empowerment in South Africa … that transformation is very important and particularly in sectors where there are large investments,” she continued.
Funding
Access to financing will be essential for iMbokodo to grow. The company secured funding from Meridian Capital in March 2021.
“It is a challenge attracting investments to South Africa, but it’s about speaking to the right audience of investors and demonstrating the underlying assets and their quality,” De Bruyn said. The company is in talks with development finance institutions (DFIs) for support.
Qualifying as a black economic empowerment (BEE) company, iMbokodo will further benefit from the extent of its female management team.
The founding idea behind iMbokodo was about creating a woman-led company. Other top executives at the company include CFO Daphne Mentor and lead geologist Sanelisiwe Mhlambi.
These DFIs have an “opportunity to demonstrate that they back gender participation and parity”, De Bruyn said. “It will be up to us to demonstrate an ability to bring projects online and to find the right capital providers. Traditional private equity providers have a limited timeframe,” but there are other options.
“There’s a lot of excitement around some of the properties in South Africa and Namibia that should mean we can attract investors from all over the world,” she continued.
Exploration
iMbokodo has signed up two technical co-operation permits (TCPs), one in Free State, the other in Mpumalanga. The licence in Free State is close to Renergen assets, which recently started producing.
The licences are still in the early stages, De Bruyn said, suggesting the company was also in talks for another area. There is one new opportunity “in particular which is taking up a lot of our time”, De Bruyn said. “The offshore asset we are looking at is on trend with Venus and Graff, part of that basin.”
Lunn, the outgoing chairman, served as Impact Oil and Gas’ country manager, and is also a shareholder and director in Sezigyn and Ricocure.
Should the company be successful at its two existing TCPs, it could move products to market either via Renergen infrastructure or a pipeline running to Secunda.
“We still require partners,” De Bruyn explained, to bring in technical and financial capability. iMbokodo sees its part in working with local communities for approval.
“It’s exciting for us to bring onshore assets to market,” she said. “We can be part of the solution around gas-to-power. South Africa is in the middle of a power crisis and we must be mindful of the just energy transition – and we can play a role in that,” she said.
Policy challenges
As recent offshore seismic projects have demonstrated, it can be challenging to carry out projects in South Africa, despite the need for more power.
“The challenges are not intractable. There’s concerted focus now from the new minister of electricity, the new CEO of Eskom, the Department of Public Enterprises, that should complete the suite of government view. There’s a willingness and an acceptance, ideologically, that it can’t be solved without private sector participation,” the chair said.
New legislation in the upstream is coming. A number of public hearings have been held recently on the Upstream Petroleum Resources Development Bill.
De Bruyn said iMbokodo had been set up with an eye on the draft bill and that the company was “compliant with government expectations”.
One area where iMbokodo has an advantage is in its plans to work with local communities. This has to go beyond simply reserving a 10% stake, De Bruyn said, “it’s about that extra effort”.
There is scope to link up local SMEs with funding sources, so these communities can become involved in the supply chain. The iMbokodo chair cited progress in the mining sector to bring in local communities and ensure benefit sharing, and from renewable energy producers.
Oil and gas entrepreneur Sean Lunn rewriting South Africa’s oil strategy
New bill going through parliament owes much to entrepreneur’s powers of persuasion and ability to thrive in “impossible” situations.
Despite legal challenges, he believes the nation’s hydrocarbon resources are “potentially so big and could make such a difference to our socio-economic environment, they cannot be ignored”.
A respected figure in southern African upstream circles, Durban-born Lunn and his wife Julie have their hands full with 10-year-old twin boys, also budding entrepreneurs it would seem.
After a decade or so in investment banking, 45-year-old Lunn sharpened his upstream acumen as Impact Oil & Gas’ country manager for South Africa and Namibia, and for seven years was also point man for the Offshore Petroleum Association of South Africa (Opasa) during its tough negotiations with government over upstream legislation.