AFRICA offers plenty of opportunities - and challenges - in the energy sector and Singapore firms should be ready and able to take advantage of them. That was the message from a summit under way here on the continent's oil and gas potential.
Mr Lee Yi Shyan, the Senior Minister of State for Trade and Industry, told the two-day event that Africa's energy developments are relevant to Asia's growing gas market. He cited the recent acquisition by Temasek Holdings' liquefied natural gas (LNG) company Pavilion Energy, which has bought a 20 per cent stake in three Tanzania gas blocks.
"As our companies grow bigger, they ought to look at Africa," said Mr Lee.
"The continent is in its early stages of development, it will have a lot of young people and a lot of consumption in the decades to come. With all these factors, I don't see why Singapore should miss out on these opportunities."
He noted that any new market involves risks so understanding of the market is paramount.
That challenge is being tackled in the form of a new partnership between the Singapore Business Federation (SBF) and Nanyang Technological University (NTU).
They will launch the NTU-SBF Centre for African Studies by next June with the aim of encouraging deeper ties and understanding between Africa and South-east Asia. The centre will be based at NTU's Nanyang Business School.
The memorandum of understanding was signed at the summit yesterday.
Five Singapore firms - Indorama Group, Olam International, Wilmar International, shipping giant Pacific International Lines and manufacturer Tolaram Group - have chipped in $1 million each to the centre's funding.
Indorama managing director Amit Lohia said he hopes the centre will become a think-tank for African issues, especially with the growing business potential there.
His firm is expanding its presence in the continent's petrol chemical sector, including building a US$1.2 billion (S$1.5 billion) fertiliser complex in Nigeria.
"There's a lot of raw material available, it's just a matter of capturing that opportunity," added Mr Lohia.
"In Nigeria and Africa, you have higher rewards but also higher risks. Security is always a big concern... but it's getting better progressively."
The inaugural Africa Asia Oil and Gas Summit at the Shangri-La hotel ends today.