A panel discussion at African Energy Week (AEW) 2021 provided insight into how the continent can remain competitive in global markets, what regulatory amendments can be made to increase international interest in African markets, and the role of Africa’s downstream sector, as many African countries pursue accelerated hydrocarbon development in the wake of recent large discoveries.
Dr. Omar Farouk Ibrahim, Secretary General of the African Petroleum Producers Association (APPO); Irene Etiobhio, Senior Petroleum Industry Analyst of the Organization of Petroleum Exporting Countries (OPEC); Jens Thomassen, Partner, A.P. Moller Capital, UK; Anibor Kragha, Executive Secretary, African Refiners and Distributors Association (ARDA); and Alcides Andrade, Director of Strata, were among the panellists.
The panellists, in particular, provided insight into Africa’s oil and gas competitiveness in contrast to global energy advancements.
“In the last 100 or so years when Africa has been producing oil, we have been heavily dependent on foreign technology, expertise and funding. Some countries have made progress in terms of local content and being able to find, produce and process oil. We have relied tremendously on foreign expertise. With the energy transition being forced on the world, it is becoming more and more important that Africans are able to control this industry. We have no choice but to be able to master the technology to explore, produce and process,” stated Dr Ibrahim.
Speakers also stressed the different success stories of regulatory modifications in Africa, as well as presented new ideas to enhance investment in Africa, with many African governments undertaking regulatory reform to enhance sectoral activities and stimulate investment in the oil and gas industry.
“Our focus should be opportunities and driving the cost down, so we are able to keep investment coming in and to find and devote our industries to be able to produce more. We need to be competitive in the global market because the oil industry is a global industry. We need to develop regulations that are flexible enough to adjust to the market. In these risky times, we need more clarity between the different entities within the industry; we have also implemented reforms to make clear what our plans are for licensing, exploration and activities. Regulatory frameworks need to have clear regulations in order for stakeholders to know what to expect. In terms of measuring the success of what we have done, from the reforms that were implemented over the last few years, we can say that we are moving in the right direction. Some of the reforms that we have implemented, we are seeing those projects developing and coming online. In terms of measuring success, we are seeing good results,” stated Andrade.
“For Africa’s oil and gas sector to be competing there needs to be a structural change in the way energy is being produced on the African continent. The continent represented by the energy sector needs to start devising solutions and opportunities within the sector in order to become competitors in the transition that will be taking place in the long term,” stated Etiobhio.
“You need to have clear, regulatory frameworks that govern the industry. Taking for example, Nigeria has just signed the Petroleum Industry Bill. Finally, we have clarity on investment and on commercial on upstream and midstream activities,” stated Kragha.
“Regulation attracting investment is great. But we have learnt that capital is drying up fast for oil and gas. We need to look at where the market is today. We need to look at where revenue is used and how it is directed in the industry. How do we remain attractive to a market that sees oil as a dirty word? We need to focus on collaboration and incremental innovation,” stated Omoboriowo II.
Finally, Koyi shifted the focus of the discussion to the future of Africa’s oil and gas business, as well as the perspectives of the panellists on the continent.
“There is a bright future for Africa. African resources will play a role in the global energy future. The challenge comes around bringing capital in. Energy poverty on the continent continues to be a pressing issue. The way we are trying to address this is by bringing in jobs, capital, and training. Through that we are seeing a physical effect on the continent,” stated Thomassen.