At Nordea we believe that the relationship with local communities is key to any investment. But it is not always easy to determine how companies approach this and what the short and long-term effects will be for the local population. This is very much the case with the on-going quest for oil on the African continent.
Oil deposits in African countries such as Kenya can potentially be a great business opportunity for investors and a financial boost to the local economies. Increased revenue, more jobs, a brighter future. But there is also a range of possible risks that we have to pay great attention to as potential investors.
Oil deposits in African countries such as Kenya can potentially be a great business opportunity for investors and a financial boost to the local economies
Economic opportunities go hand in hand with increased responsibilities towards local communities and the oil companies involved need to acknowledge this and deal with it properly.
This covers everything from adequate infrastructures and water resources to providing protection. In Africa, this is a key issue. Political tension and tribal conflicts mean that there is often a need to protect drill sites and the people who work there.
And then there is a range of environmental and social challenges related to the people that live next to the drill sites. As you can understand, local populations have high hopes and the potential is enormous. Therefore, it is important that the oil companies have a plan for handling the risks related to the social development.
As Keith Hill, CEO of Africa Oil, points out:
– At the end of the day, it doesn’t matter if we find a lot of oil and none of the benefits go to the population of Kenya, we have failed. The real goal is that everyone should enjoy the wealth of this oil.
The information provided within this website is intended for background information only. The views and other information provided herein are the current views of Nordea Bank Abp as of the date of publication and are subject to change without notice. The information provided within this website is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient.
The information provided within this website is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information provided within this website has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results.
Nordea Bank Abp is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction.
The information provided within this website may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Bank Abp.