Stephen, who is London based, founded Africa New Energies (ANE) along with another Global South African, Brendon Raw. Together they have been working since 2004 to create the suite of technologies required to realize their vision.
Stephen speaks to us about his background, what made him start ANE and how being a South African has shaped him.
1. Where are you from in SA and where did you grow up and go to school?
I grew up in Cape Town. I went to junior school in St Joseph’s College before winning an academic scholarship to go to Bishops, funnily enough the same route as Herschelle Gibbs, the cricketer . We both used to catch the same train to school which we had done since we were eight years old. In fact Herschelle was involved in an incident which was eerily similar to a scene from John van der Ruit’s first Spud book, where his father’s car always had to be push started in a cloud of smoke, past all the Rolls Royces. My father, who could best be described as absent-minded drove our elderly Datsun Stanza to the station one morning to drop me off at Heathfield Station. He was wearing little more than an old dressing grown over some tiny pajama’s with a revealing split. The car would not start and Herschelle and several other Bishops and Marist boys had to push to get it rolling down the hill as my father ran by the side, dressing gown fluttering in the wind, as he attempted to steer it and push at the same time. I never lived it down as the car gathered speed down the hill and almost rolled away from him.
2. What is your professional background?
I did my degree majoring in economics at UCT, where I spent more time defending students against academic and financial exclusions than studying. I moved over to the UK, where I got a job with Unilever as a Graduate in their Media Finance Team. My love affair with the energy industry started when I got my dream job at British Airways world-renowned fuel team in 2001 as a naïve young 27-year-old. I loved the energy industry and BA was as good a place as any to learn it – the team was small enough for me to have exposure to a wide range of cutting-edge initiatives, where we reduced the amount of drinking water on a plane, saving tens of millions and selling the carbon savings to a Sussex Pig Farmer – which became the world’s first exchange traded carbon trade. I learned derivative valuation techniques, oil trading and the importance of pipeline economics. I was mentored by the legendary David Rushmer, who is the world’s most feared airport fuel oligopoly breaker. He remains a mentor, investor and advisor to this day. British Airways Fuel Team was voted the world’s best in all three years I had the privilege of working for it. South Africans are obsessed with qualifications, so for full disclosure, I have a BCom from UCT and am a member of the Chartered Institute of Management Accountants and the Institute of Directors.
When my wife and I had our first child – the free flights on standby became less attractive and I moved to GE Capital – the aviation industry’s largest creditor. I spent a year modelling early settlement profiles and debt run-off before moving back to South Africa, where I started my own business, with long standing business partner, Brendon Raw, a uniquely gifted IT developer. We started off in the Industrial IT industry servicing the mines with WiFi and Ruggedized PC’s. We prided ourselves on our innovation – installing the first WiFi networks in South African mines, breaking the African Bluetooth record in creating a world first in blasting for AECI and got a Special Program for Industrial Innovation Grant from the IDC (the same grant that got Mark Shuttleworth going) to create an interface that transcended language and literacy for mine workers at the coalface. With tough times from 2008, we were one of the first in South Africa to move into solar energy, where we were consultants on the first solar Power Purchase Agreement awarded in Africa for a utility scale solar power plant. Sadly it never got built, but it did result in us getting interest from Kenya with the Lake Turkana Project, Ghana and Nigeria, before winning the African Innovation Foundation grant to come up with our Flagship Stranded Natural Gas to Solar strategy which we are implementing in Namibia at the moment.
What is the one element about being South African or about South Africa that has shaped who you are today?
Although I was not to know it at the time, a throw-away conversation on my first day of university at UCT turned out to be the defining moment of my life. When I met my room-mate, we both realized how different our backgrounds were: I went to an elite private boarding school while he was from Bushbuck Ridge near the Kruger Park and was the first person in his family and indeed his wider community to get any kind of tertiary education. Eyeing up the girl’s residence, with 400 eighteen year-old girls, recently escaped from the strictures of elite Natal boarding schools - 30 meters from us, I asked him what he was most looking forward to in Freshers Week. He said, “it will be the first time in my life I will have light to study in my room at night”. At that moment, I knew what I wanted to do with the rest of my life. To this day, my flatmate remains a friend and inspiration to me and has gone on to become a leading IT expert in the mining industry. Nowhere else in the world does one encounter such extremes: Growing up in South Africa, I was able to rub shoulders with the world’s finest minds - not that they would remember me, Mark Shuttleworth was wing when I was centre for the Bishops Under 14E team and I lost Economics debates with Roelof Botha, who went on to found PayPal with Elon Musk and turn his YouTube investment from $11 million to $500 million in less than a year. When I was involved in student leadership at UCT – the Queen came to Cape Town, so did Hillary Clinton, we saw the Pope, we saw Madiba and had tea with the Kennedys. But at the same time I got to spend a lot of time with people like my roommate, whose achievements are more impressive – considering what obstacles they had to overcome just to get electric light in the room for the first time. I remember when Mark sold his business at the height of the dot com boom when I was 26 – I thought – wow – I know this guy, he might be way brighter than me, but I did the same course as he did at UCT, we sang in the same choir and if he could be a billionaire at 26, then at least I can become one when I am 52. Before that, I thought that kind of success only came to people one read about - sixteen years on, I am well placed to achieve this goal on Africa New Energies success and I have ten years left to do it. Perhaps I should have been more ambitious in my target setting.
3. Why did you start New Africa Energies and where do you see it going?
Following on from the previous question, Africa New Energies was started with a simple mission – that by the time I retire – all 620 million Africans who currently use wood for their energy needs will have clean affordable electricity in their own homes. We had our chance to do something about this when we were approached by the Namibian Government to find a way to give the 2/3rds of its population electricity for the first time. We initially considered solar – after all this is the sunniest country on earth. BUT… we found that giving everyone solar for the first time would cost $12 billion or 1 year of GDP, bankrupting the country. So we had no alternative but to come up with an interim measure where we are helping them to find natural gas onshore where it would cost a more affordable $600 million or 3 weeks of GDP. This landed us in the oil exploration business.
What with oil being a curse in much of Africa, we were only prepared to undertake such a project if it was with the support of the community. For this reason, we chose to start our work in the Kalahari – not least because, Kuaima Riruako the now-late paramount chief of the Herero, reached out to us saying that he would rally the 20,000 strong local community behind us if we chose this area, where he was born. When he spoke out to his people, several came forward telling us about oil seeps they had seen. We then compared these findings to the first stage of our remote sensing technology, and found that we could be sitting on a globally significant oil and gas province. with 32 potential fields. One of the seeps sits in the middle of a satellite anomaly the size of Surrey.
On the strength of this, we applied for the oil and gas exploration rights with the support of the community and were awarded a concession bigger than Wales on the most advantageous terms industry veterans had seen in 40 years. As we have an exclusive right to produce for 25 years, once we have made a discovery, we have the potential to find enough Natural Gas and Oil to make sub-Saharan Africa a net exporter of oil and give the sub-continent a major dividend in natural gas, which is a fifth of the cost of coal and a 15th of the cost of nuclear – as a lower carbon way of replacing our aging coal-fired capacity with natural gas.
Our long term goal is a social one – we plan to use the vast profits that will accrue to Brendon and me to give first to everyone in Namibia, solar electricity and then use our technology to repeat the same process for the 620 million African people who lack electricity – across 50 African countries.
4. What separates it and makes it unique?
1. Our surface exploration technology triples the probability of success at 1/10th of the cost of traditional seismic dominated exploration
The fact that we are so much cheaper, means that we were able to become the first international oil and gas company to be awarded enterprise investment scheme status in the UK. This means that the majority of the risk for the average UK tax paying investor is taken by the UK government – even though this is a project that is based in Namibia. No other oil and gas company has this dispensation and it increases the upside/downside ratio by between three and fifteen fold depending on the investors’ tax position. It also means that we are able to Crowdfund this investment, so avoiding the debilitating dilution that comes with involving institutional investors. This not only increases everyone’s returns but has enabled us to award a generous stake to the community, local entrepreneurs and the government of Namibia is a partner.
2. The third thing that is different is the concession itself. It is large – at 22,600 square kilometers it is bigger than Wales and 10% of it is highly prospective. The community are supportive and have found over 650 live oil and gas seeps over a vast area – so far. The logistical endowment is globally unique – nowhere else in the world does a company own so much prospective acreage so close to existing rail and road infrastructure. The railhead on the edge of the concession connects us to two ports, both with attractive tankage options in Namibia and two refineries, one of which has the potential for premium pricing due to it being landlocked. The recent finds in East Africa will need $10 billion in development costs, complex heated pipelines to deal with the wax and cross several politically instable regions. Our concession will need a $1 million tank at the well head before we can start trucking product to market.
5. How can Global South Africans get involved?
The first way is to support our Crowdfunding Campaign, especially if you are a British Individual Tax Payer. The Crowdfunding started off when I called one of my best friends from school in 2004 and told him my dream. He flew me over to London, where we pitched to friends from school. Four days later I had the first £75,000 to get started and since then 330 investors have supported us with over £2 million of Enterprise Investment Scheme money. A total of £4 million has been raised from various sources so far. We need to complete this £1 million raise and then raise another £3.5 million to drill the first well. I know many of the investors are delighted that they can make a potential return on their British taxes whilst investing in this project, which when successful will have an extraordinarily positive social, economic and environmental impact on Southern Africa.
The second way is to link with me https://www.linkedin.com/in/stephenlarkinoileis and help us spread the message on Social Media, by liking articles like this one - https://www.linkedin.com/pulse/why-good-thing-two-solar-geeks-could-end-up-owning-more-larkin?trk=hp-feed-article-title-comment
It costs you nothing and takes a few seconds to like and share the article, and this makes a real difference. If you know people who might be keen to get involved tell them about us.
6. As someone that has been a member of the Global South African network since the beginning, what message do you have for South Africans around the world?
South Africans remain proudly South African wherever they are in the world. As I write this article, I listen to AfroBaroque in my Springbok Rugby Shirt on a cold night in Surrey. I have spoken to so many successful South Africans overseas who would love to share their global experience, contacts and capital to make the continent a better place, but could not find a practical way of doing it. Never before, has it been possible to invest your foreign taxes in Southern Africa’s economic development. We would love you to be part of this – as a Globally Southern African initiative.