The influence of Environment, Social, and Governance (ESG) standards, along with regulatory frameworks in African countries, is shaping the landscape for oil and gas investments across the continent, according to Mrs. Eleanor Adaralegbe, Chief Financial Officer of Seplat Energy. Speaking at the Africa Oil Week (AOW) Conference & Exhibitions in Cape Town, Adaralegbe emphasized that ESG factors play a crucial role in determining the cost, compliance requirements, and risk profiles of energy projects.

During a panel session titled “ESG Investing: What Strategies Make African Deals Attractive in 2024?” Adaralegbe underscored the importance of companies adhering to ESG-related standards to mitigate risks and seize opportunities. “These actions create opportunities for enhanced stakeholder trust, improved financing options, and long-term project success,” she stated.

Adaralegbe highlighted the increasing role of investors in screening projects against ESG benchmarks, using frameworks such as the Equator Principles and International Finance Corporation (IFC) Performance Standards. She noted that Seplat Energy has positioned itself ahead of the curve by prioritizing sustainability from the top level, with dedicated committees focusing on ESG and sustainability matters.

Additionally, she spoke about the growing interest in energy transition projects, particularly natural gas, which serves as a bridge to renewable energy, and carbon offset initiatives tied to oil and gas operations.

Adaralegbe concluded by emphasizing that strong ESG performance could lead to favorable financial terms, while poor practices could result in reduced valuations and fewer investment opportunities.

The session reiterated the vital role of ESG in shaping the future of Africa’s energy investments, particularly in the oil and gas sector.