Nigel Friend joins a growing group of chief executives able to deploy proven number-crunching skills to steer a profitable course away from the rocks and rapids that threaten to engulf smaller geology-driven players in today’s upstream industry.

Appointed to British Virgin Islands-registered Orca Exploration’s top job last November, Friend swiftly built a business development team to review the gas development and supply model so successfully applied in south-western Tanzania at Orca's Songo Songo field — the company's sole asset — and replicate it across the continent.

Orca must change from being a one-asset company and diversify, he says.

“We are now looking to do that. We cannot leave a large cash balance in the bank generating minimal interest,” Friend says.

“Besides, it’s good to have competing capital within an organisation and the flexibility to allocate it.”

He says mergers and acquisitions activity will characterise the market as low gas prices persist and the big bucks dry up for smaller players, with even sovereign wealth funds steering clear of gas-to-wire energy investment.

Are we witnessing the financialisation of oil and gas?

“Yes — this is inevitable, as shareholders are starting to demand it,” he says.

“They’re looking at capacity and diversified portfolios to attract funding, so expect a lot of consolidation in the market through 2020 and beyond.”

Born in 1963 in the English county of Kent, at age seven he moved with his family to Brussels while his father completed a three-year stint heading up ExxonMobil’s European operations.

“The French didn’t really stick. I speak very little, but have a great accent,” he says.

Leadership

He recalls being "constantly" in trouble as a youngster, a sports fanatic who played football throughout his school years and later participated in athletics at Nottingham University, where he captained both the cricket and the rugby teams.

“I think it was the leadership challenge — I love organising teams and driving goal congruence,” Friend says.

Graduating in 1985 with a BSc in Industrial Economics, he dived straight into work the following year with professional services firm Peat Marwick Mitchell, later KPMG, writing audit reports for a broad swath of clients, from pension funds to combines such as Johnson Matthey.

He describes the time as “a great period in my life, earning money and working with young people, eventually heading up a new transaction services department focused on corporate finance and due diligence for initial public offerings and acquisitions”.

Friend led a clutch of key investigations ranging from PSA Management Services to Gencor’s acquisition of Shell’s Billiton assets, travelling extensively.

"It’s very important to actually see the projects and kick the tires,” he says. Friend thinks he probably stayed too long — just over a decade — deciding in 1997 to swap industries and join the Enron Group. It was his first exposure to oil and gas, providing finance for other energy companies.

“I invested in projects like Thrace Basin Natural Gas in western Turkey, just 100 metres below ground, so we used water rigs to drill three-day wells, each at a cost of $100,000, every one flowing some 3 million cubic feet per day through a pipeline we built to serve an industrial customer base,” he recalls.

Finance

With Enron’s bankruptcy in 2001, Friend jumped back into finance at Pan Ocean Energy, which had assets in Gabon and Tanzania’s Songo Songo gas field.

Songo Songo was dividended out to shareholders via the listing of East Coast Energy while Pan Ocean’s market capitalisation soared to $1.6 billion before it was sold off to Addax.

“But I’d already moved to Tanzania to head up East Coast Energy, later Orca, which found a way back into Songo Songo via the World Bank, signing new agreements in 2001 with the project commissioned in 2004," he says.

"We’ve built a 50-kilometre pipeline network around Dar es Salaam to flow some 100 MMcfd serving 39 industrial customers.”

Friend praises former president Benjamin Mkapa for his patience in driving the sector.

“Governments can take the long view, and that’s what they did," he says. "(Songo Songo) is now a world-class field with no physical constraints. Too few projects of this kind reach their potential in Africa.”

Secure funding for infrastructure, the need to pick a jurisdiction carefully and getting the World Bank onboard are all key to avoiding slip-ups, and Friend likes to avoid those.

Emblazoned in his memory is an ill-fated night back in the 1980s, playing fly-half in a rugby union match at Twickenham, home of the English national rugby team.

“I didn’t acquit myself well, played atrociously and missed a kick in front of a huge crowd.”

However, Friend’s heart still beats to compete.

“I bring an old man’s team together once a week to play five-a-side with my 20-something sons — and have done for the past seven years.”

Weekly

Friend brings a sporting spirit to Orca Exploration