Energy Capital & Power

Frazer Oil Seeks to Curb Fuel Monopolies, Stabilize Prices in Sub-saharan Markets

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Liza Frazer, President, Frazer Oil & Energy

Frazer Oil specializes in the physical trading, logistics and distribution of crude oil and refined oil products in the U.S. and globally, with the principles of diversity and inclusion at its core. Energy Capital & Power spoke to Liza Frazer, President, Frazer Oil & Energy, as the New York City-based commodities firm seeks to expand into new sub-Saharan markets, the company will be participating as a Gold Sponsor and Panelist at the upcoming U.S.-Africa Energy Forum 2021, with a view to forging partnerships with local downstream players.  

What role does Frazer Oil play in the sub-Saharan African energy supply chain?

Frazer Oil accommodates transactions in smaller amounts and more consistent refined products to the sub-Saharan African energy supply chain. In West Africa, for example, we use our existing partnerships with refineries in countries nearby the region to provide products that contribute to marketability, establish a just price and reduce existing fuel shortages. With the growing number of refineries, specifically in Nigeria, we are aware that the condition of refined products in West Africa is going to change. In the meantime, we contribute to the goal of ending energy poverty by 2035 by establishing competition to curb monopolies and stabilize prices. In the region, our primary purpose is to set a precedent for small, minority-owned companies to trade hand-in-hand with the majors by complementing their business and identifying different markets in which we could work together.

What impact has COVID-19 had on your operations to date, as well as your planned expansion into new markets?

COVID-19 was actually very favorable for us. As a small company with a limitation on funds, we were able to enter different markets that did not require the usage of the volumes that pre-COVID-19 was demanding. While we are a small, minority-owned company, we have to participate as the majors and Fortune 500 companies do in different tender and trade opportunities. As a result, we minimize our costs to meet very small margins that have been put in place by some of the majors. In terms of expenditures, we were able to enter some of the test markets that we had in mind without having significant expenses or liabilities. The pandemic also gave us time to reinvent ourselves and seek different areas to implement some of the barter deals and statutes that make our company what it is today.

What do you see as the key opportunity for bilateral trade and investment between American and sub-Saharan energy markets? Where can the U.S. grow its participation and differentiate itself from other foreign players?

Both the U.S. and sub-Saharan markets can learn from each other in different respects. Africa is such a rich continent in crude oil. Producing more refined products that are necessary for everyday consumption will create growth within the population, as well as eradicate energy poverty by 2035. The advances that the U.S. has made in creating energy that is sustainable offers Africa a reduced carbon footprint in many areas without compromising the use of fossil fuels to create energy. I think technology and the skill set of its employees sets the U.S. apart. We pioneer the use of technology to enhance business and development. In the trade of refined products, for example, I can see where U.S. technology is more efficient, streamlined and helps the movement of fuel in the country without compromise at our nation’s airports.

One of the key impediments to foreign investment in Africa is risk – both real and perceived. What measures could be taken to minimize the risks associated with large-scale energy investments and projects in sub-Saharan markets and build back investor confidence post-COVID-19?

The U.S. has developed a strong financial system that is able to penetrate different markets, while maintaining some degree of insurance that protects American citizens or companies, and maintains integrity that comes with investing and getting their money back. The advantage of being in the U.S. is that it is a very process-driven economy. I think the best way we can keep the integrity of the business in growing is to legitimize a lot of the transactions, from the smallest to the biggest, and have the legitimizations be housed in an organization such as the African Energy Chamber, where people, processes and systems can be validated within the industry. I definitely see different investment possibilities between the U.S. and Africa, on both the giver and taker side.

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Grace Goodrich

Grace Goodrich

Grace Goodrich is a Publications Editor at Energy Capital & Power, where she writes about the intersection of energy, policy and global finance in sub-Saharan Africa's fastest-growing economies. Grace produces our Africa Energy Series investment reports in Angola and Equatorial Guinea (2019), as well as co-authored African Energy Chamber: Road to Recovery (2021).