Mocoh, a new downstream player in Senegal
The Swiss-based downstream company Mocoh aims to bring its experience of the downstream sector and petroleum imports to Senegal in order to improve availability and quality of products in the country. AES Senegal spoke to Almamy Fall, Country Manager Senegal, to fins out more about the company’s activity in the region.
What is Mocoh Group?
Mocoh is a company in the petroleum sector specialized in trading, logistics and distribution. We have 20 years of experience since the creation of the company in 1998. We are present in 30 countries, including two branches in our leading market, Nigeria, where one branch works closely with the Nigerian National Petroleum Corporation and the other trades petroleum products in the private sector. In Senegal, we are interested in the hydrocarbon sector as a whole in which we work with Comité d’Orientation Stratégique du Pétrole et du Gaz (COS-Petrogaz) to properly position ourselves.
What potential do you see in the Senegalese market?
Senegal has many key selling points. Political stability is of course one of them but it goes further. When you want to invest in African countries with a high GDP, you will face strong competition and you have to come up with differentiation strategies. For example, we are currently finalizing the acquisition of 20 gas stations in Ghana to penetrate the downstream segment. Of course, entering the Senegalese market is far from easy, especially in terms of procedures; but the upside is that it presents a lot less risk and more stability than other countries in the region. Furthermore, the recent oil and gas discovery added to numerous infrastructure projects makes it an exciting market.
What are the nature of your synergies with Societe Africaine de Raffinage ?
We wish to be a strategic storage partner for Societe Africaine de Raffinage, of both crude oil and refined products. Additional areas of collaboration include naphtha export and access to Mali, which is located in hinterland and faces strong difficulties in imports of basic products. This situation is driving prices up. Mocoh’s goal is to provide petroleum products at a fair price to benefit the local population. Of course, such a mission cannot be undertaken from abroad, hence the creation of our branch here.
What funding models do you envisage for these expansion plans?
As always, financing these plans is a challenge. One cargo of refined product can cost between €3 million and €10 million. Mocoh’s strength is being able to combine local financing options with loans from international banks. Our goal is to do business with local banks and entrepreneurs and to be part of the growth of the hydrocarbon sector. For big investments, such as the construction of storage units, we plan to build joint-ventures with local players. The state, together with independent players and international companies, can invest together. Mocoh Group can bring financial support, petroleum and logistics expertise and a pan African presence, while local partners can bring their knowledge of the local market and skills. This framework is part of our strategy. We are very agile when it comes to finding local options and we want to team up as much as possible with local players, whether it is operationally or financially, or both.
What challenges do you see in the implementation of local content policy?
We have committed to developing local content for a while now. In a couple of weeks, our CEO, Michael Hacking, will come to Dakar to inaugurate a school Mocoh funded. We also support a coding school in Dakar. It trains youth from West Africa in coding, programming, data analysis and also provides job opportunities in those domains. Aside from these schools, we have in-house training opportunities for a number of our employees. An important aspect of our strategy is corporate social responsibility in all our countries. In Senegal, we already train Senegalese and international students. For all the above, Mocoh is committed to reaching government goals in terms of local content.
What is Mocoh Senegal’s strategy in terms of regional synergies?
The most important aspect concerning this is stability. Mali became a divided country because of its natural resources. Mauritania and Senegal are doing things right for the moment and proper strategies for natural resources exploitation are necessary in all countries to maintain or bring back peace. Unfortunately, the oil curse means that hydrocarbon-rich countries are also more prone to conflicts.
What can a profitable petroleum industry bring to Senegal?
When majors come in the country to fund exploration and production, a portion of the profit is redistributed for everyone to take advantage of. Furthermore, although the sector only employs 5% of the total working population, revenues can help fund schools and hospitals. Of course, large oil and gas companies want to generate revenue from their activities in the country, but there will be associated benefits for the country and the population. We may have to wait 10 to 20 years, but the people will be able to take advantage of the discoveries.
Do you have a message for potential investors?
Mocoh was founded by our CEO, Michael Hacking, who grew up in South Africa. He was a director at Engen for many years and is committed to growing Africa and doing business in Africa. He is also a philanthropist, open to the world and ready to tackle challenges in Africa. Offshore oil and gas companies need to take into account local challenges in their strategy. They have tremendous resources, such as technology and know-how, but they must acknowledge local development and positive impact on citizens.
This article will be published in the upcoming Africa Energy Series: Senegal report which will be launched at the London Investor Forum hosted by Africa Oil & Power on June 11, 2019.
Register here to attend the event.