A multinational professional services firm, PricewaterhouseCoopers, PwC, yesterday called on Nigeria as well as other Africa countries to reform its regulatory, fiscal and licensing systems, to attract investors to the oil and gas business.

Speaking at the launch of PwC’s ‘Africa Oil & Gas Review 2016’ in Rosebank, on Monday, the firm’s advisory leader Chris Bredenhann, stated that the continent still offered significant opportunities in the oil and gas sector, despite the current low oil price.

He explained that it was important for the industry to look beyond the challenges caused by depressed prices and consider other forces that were shaping the industry, adding that there was a significant rise in the challenge of meeting taxation requirements, as well as conducting government relations.

According to him, “Regulatory uncertainty has remained the top challenge facing oil and gas businesses in Africa for the third year in a row, with 70 percent of organisations citing it as one of the five biggest issues they experience.

“Around the continent, many organisations have experienced difficulty obtaining government sanction for new projects. The report noted that this was proving to be extremely difficult in new hydrocarbon provinces, such as Mozambique, as governments did not fully comprehend the intricacies and scale of oil and gas projects.

“As a result, organisations are beginning to ally themselves with government in order to ensure that they are a strategic and supportive partner.”

He posited that “organisations have identified the price of oil and natural gas as the most significant factor that would affect their businesses over the next three years, with respondents expecting the price to reach $52/bl by the end of 2016, $60/bl by the end of 2017 and $69/bl by the end of 2018.

“With little control over the price, businesses have focused on improving efficiencies and driving down costs.”

He noted that regulatory compliance also remained a significant challenge for organisations this year and that foreign currency volatility was rated as likely to impact business over the next three years.

“This year, there have been large currency fluctuations – with the fallout from the Brexit vote precipitating some of the largest so far.”

However, he explained that asset management and improvement remained a key strategic focus area for companies; fortunately, the industry remained optimistic and many upstream players were focusing on exploration and finding new resources over the next three years, most likely in anticipation of an upturn in the oil price.

“Although there has been some recovery in the pricing environment, investor confidence remains low as a significant recovery does not seem to be on the horizon andoil market fundamentals are still down.”

The low oil price has led operators to defer final investment decisions on over $300-billion of projects. Globally, merger and acquisition activity has also dipped, with this trend likely to continue.