Delayed OPEC Cuts Mean Opportunity for African Members

By NJ Ayuk

Quota-related decisions made at OPEC's 35th meeting last June in Vienna delivered a call to action for African member states to step up production through the remainder of the year and into 2024.

Many of OPEC's African member states had been struggling to produce enough crude to meet the targets set for them last year. As a result, they found themselves accepting even lower quotas this year.

Decisions regarding production cuts for African members Algeria, Angola, Congo, Equatorial Guinea, Gabon, and Nigeria are summarized in the African Energy Chamber's (AEC) newly released outlook report, "The State of African Energy Q2 2023."

Our report also notes easing of the civil unrest that resulted in the exclusion of member state Libya from OPEC cuts for the time being.

OPEC's meeting, which included OPEC+ oil-exporting countries as well, resulted in a Declaration of Cooperation that delays further cuts to production targets until 2024 and continues voluntary cuts by nine member states until the end of 2023. Algeria and Gabon are the two African members among those volunteers.

The 2024 Targets and Expected African Production

OPEC's signed declaration calls for a significantly lower cumulative production target for African member states: about 4.33 million barrels per day (MMbbls/d) of crude oil.

A look at the targets of OPEC's two leading African oil producers — Nigeria and Angola — shows considerable reductions from the 2023 quotas set at the 33rd OPEC and non-OPEC Ministerial Meeting (ONOMM). Nigeria's 2024 target, 1.38 (MMbbls/d), represents a reduction of 360,000 barrels per day (bpd), and Angola's quota went down by 175,000 bpd to 1.28 MMbbls/d.

Despite these reduced quotas, it is not anticipated that either country will reach theirs in 2024; Nigeria is expected to hit 95% of its target, Angola 75%. Nigeria, although estimated to be capable of producing 2.2 MMbbls/d, has faced challenges such as oil theft, sabotage, and technical issues.

Angola, despite increased oil and gas activity in 2023, has still strained in recent months to produce more than 1.1 MMbbls/d, far short of its current 1.46 MMbbls/d target from OPEC.

Congo is also expected to fall short of its production target, at about 10% less than allowed, while Equatorial Guinea and Gabon will likely produce slightly over their target numbers of 70,000 bpd and 177,000 bpd respectively, avoiding compliance as in the past. Of the members in sub-Saharan Africa, only Gabon has achieved its target this year.

Algeria in the north is another high achiever, with production capacity that exceeds its 2024 OPEC target of 959,000 bpd. It has agreed to cut output by 96,000 bpd to comply.

Meanwhile, its next-door neighbor, Libya, achieved an average of 1.26 MMbbls/d for 2023 after recovering from drastic production outages during 2022 civil disturbances. OPEC cuts for 2024 have not been set for Libya, allowing the country to use oil reserves to assist with reconstruction efforts.

Crude production in several African nations has been stymied by lack of adequate investment, political unrest, and technical issues associated with older wells.

Following an assessment of the Declaration of Cooperation by IHS, Wood Mackenzie, and Rystad Energy, the 2024 targets for Nigeria and Congo may be revised based on their anticipated levels of production.

Strategies for a Better-Than-Expected 2024 and Beyond

The delayed OPEC production cuts clearly showcase an urgent need for African countries to up their current production numbers and prove that higher quotas are warranted, which would also increase African negotiating sway at future meetings.

The possibility of target modification "to equal the average production that can be achieved in 2024," particularly for Congo and Nigeria, was raised in a June OPEC announcement that followed the meeting. Angola was also mentioned as having production plans "subject to verification...before the end of 2024."

Acknowledging both the opportunity and the urgency, the head of geopolitics for London-based research firm Energy Aspects, Richard Bronze, stated that the deal "certainly creates an incentive for these three countries (Angola, Congo, and Nigeria) to try and demonstrate they can raise production before year-end, but we think they are unlikely to be able to manage it."

The time is now for African OPEC members to prove that they can achieve the higher output capability that warrants higher baselines.

The calls for government action that I and the AEC have stressed in recent years are more urgent than ever: African governments need to create the kind of positive, enabling climate that will encourage greater exploration and production. Good financial policies will help in that effort, as will ethical, transparent, and efficient governance.

Prioritizing speedy adoption and execution of measures to achieve these goals will bring what is most needed to boost African production numbers — increased interest from international oil companies and investors.

A united effort to awaken more investor interest in African oil should start now, as should cooperation among African members to present a more unified voice when the 36th OPEC meeting is held in November, 2023.

The OPEC - Africa Roundtable at the African Energy Week in Cape Town, will ensure Africa specific issues are addressed and as well as global energy security issues.

As S&P Global noted, this strategy would be "taking a page from their Middle East counterparts, who typically align their positions before contentious negotiations through pre-meeting consultations."

I encourage Africa's member nations to do what it takes to increase investment, production, and their influence at the OPEC table. You are stronger together.

NJ Ayuk is the Executive Chairman of African Energy Chamber


Threat Of Deforestation: Hoima Sugar's Impact On Food Security And Local Communities

By Mpagi Jackson

Deforestation is an alarming global issue with far-reaching consequences, and the activities of companies like Hoima Sugar have the potential to exacerbate this crisis. In the case of Bugoma Forest, the repercussions of deforestation are not limited to the environment alone but extend to food security, livelihoods, and the well-being of local communities. In this article, we will delve into the various ways in which Hoima Sugar's activities are endangering the delicate balance of Bugoma Forest and the people who depend on it.

Bugoma Forest, a lush and biodiverse treasure located in Uganda, has long been a source of sustenance for forest dwellers and neighboring communities. The deforestation linked to Hoima Sugar poses a grave threat to food security and sovereignty. The forest has provided an array of essential resources, including mushrooms, honey, wild coffee, yams, and a variety of vegetables and fruits. These natural bounties have been integral to the diets and livelihoods of those who reside in the vicinity. However, as Hoima Sugar's activities continue, these resources are becoming increasingly scarce.

One of the most concerning aspects of this deforestation is the potential depletion of these vital forest goods. Mushrooms, for instance, are a significant source of nutrition and income for many families. Honey, often harvested sustainably from the forest, not only serves as a food source but also as a source of income. The wild coffee, yams, and various vegetables and fruits contribute not only to the local diet but also to the income generation of forest-dependent communities. The loss of these resources threatens the food security of these communities and undermines their ability to control their own food sources.

Beyond the immediate impact on food security, Bugoma Forest also provides other valuable resources that sustain the livelihoods and health of local communities. Rattan canes, found abundantly in the forest, are essential for making furniture and handicrafts. These products are not only a source of income but also a representation of the cultural heritage of these communities. Additionally, medicinal plants found in the forest play a crucial role in traditional healthcare practices, ensuring the well-being of the inhabitants. The destruction of the forest disrupts the delicate balance of these communities' lives, threatening their livelihoods and health.

Furthermore, deforestation activities bring with them an influx of migrant workers to Hoima Sugar's project site. This influx places added stress on the already dwindling forest resources, exacerbating the problem of resource depletion. An alarming consequence of this increased demand for resources is the shortage of fuelwood. Cooking is a daily necessity for every household, and for many, fuelwood remains the primary source of energy. The shortage of fuelwood places immense pressure not only on Bugoma Central Forest Reserve but also on the local communities that have historically resided in the area.

Women and girls, in particular, bear the brunt of this fuelwood shortage. Traditionally responsible for collecting fuelwood for cooking, they must now travel longer distances and expend more effort to gather the increasingly scarce resource. This added burden has significant implications for their daily lives, including reduced opportunities for education and employment. It perpetuates gender inequality and reinforces the cycle of poverty that many in these communities are already trapped in.

In conclusion, the activities of Hoima Sugar in Bugoma Forest are not isolated incidents of deforestation. They have far-reaching consequences that affect food security, sovereignty, livelihoods, and gender dynamics among forest dwellers and adjacent communities. The depletion of vital forest goods, such as mushrooms, honey, wild coffee, yams, and medicinal plants, disrupts the traditional way of life and threatens the well-being of these communities. Additionally, the influx of migrant workers and the resulting fuelwood shortage further exacerbate the challenges faced by local communities, especially women and girls.

To address these issues effectively, a holistic approach is needed, one that considers the environmental, social, and economic dimensions of the problem. It is essential that we prioritize the preservation of Bugoma Forest and support sustainable alternatives for both livelihoods and energy sources. Only through collective efforts can we hope to protect this invaluable ecosystem and the communities that depend on it for their survival.

 Mpagi Jackson is a resident of Nyerongo  


Bugoma Forest Destruction: A Devastating Loss for Bunyoro's Herbal Medicine Heritage

By Ruth Kyarisiima

Bugoma Forest, located in the heart of Uganda, has long been a sanctuary for biodiversity and a treasure trove of herbal medicinal plants. However, the wanton destruction of this pristine ecosystem has not only dealt a severe blow to nature but has also robbed Bunyoro of its invaluable heritage of rare and essential trees used for herbal medicine. It is crucial to recognize that Bugoma Forest holds not only ecological significance but also cultural and medicinal importance.

One of the compelling arguments for preserving Bugoma Forest lies in its status as an ancestral area. Many former kings, including the revered Omukama Kabalega, played a pivotal role in planting and nurturing various herbal medicinal trees within the forest. Their intention was clear: to provide natural remedies for their subjects and ensure the well-being of their communities. In doing so, they created a legacy that has sustained the health and vitality of Bunyoro for generations.

Among the irreplaceable losses resulting from the destruction of Bugoma Forest is the Prunus Africana, locally known as Entaseesa. This tree is a vital resource in the treatment of various ailments, including prostate cancer. It has been used by traditional healers for centuries and is a critical component of Bunyoro's herbal medicine heritage. With the loss of Bugoma's pristine habitat, the survival of this important tree species is now at risk, and its medicinal properties may become scarcer.

Another significant casualty of the forest destruction is the Warburgia ugandensis tree, commonly referred to as Omusikambuzi. This tree plays a pivotal role in the production of Covidex, an herbal remedy that gained international attention during the COVID-19 pandemic. Covidex, developed from traditional knowledge and practices, was hailed as a potential treatment for respiratory illnesses. The destruction of Bugoma Forest not only threatens the supply of Omusikambuzi but also endangers the rich cultural and medicinal practices associated with it.

Tamarind (Omukooge) is yet another tree that has called Bugoma Forest its home. The fruits of the tamarind tree are renowned for their medicinal properties, including their ability to help maintain healthy blood pressure and their antioxidant benefits. Losing access to this resource affects not only the traditional medicinal practices of Bunyoro but also the potential for scientific research and the development of new medicines.

The loss of Bugoma Forest is not merely about the quantity of these rare medicinal trees; it is also about the quality of the resources we have lost. Traditional herbal remedies often rely on a delicate balance of various plant species, and the destruction of Bugoma Forest disrupts this intricate ecosystem. The synergy between different plants in the forest contributes to the efficacy of these remedies, and the loss of any single species can have far-reaching consequences for both traditional medicine and potential scientific breakthroughs.

It is essential to view the destruction of Bugoma Forest as a loss that extends far beyond environmental degradation. While the devastating impact on biodiversity is undeniable, the depletion of our herbal medicine heritage is equally alarming. The ancestral connection to the forest, through the efforts of past kings like Omukama Kabalega, underscores its cultural significance as a source of healing and well-being for the Bunyoro people.

In conclusion, the destruction of Bugoma Forest is a tragedy that reverberates on multiple levels. Beyond its ecological significance, it represents a profound loss for Bunyoro's herbal medicine heritage, disrupting traditional healing practices and potentially hindering future scientific advancements in the field. To honor the legacy of past kings and safeguard the well-being of future generations, urgent action is needed to protect and restore this vital ecosystem. We must recognize the forest's intrinsic value as a source of both cultural and medicinal wealth and commit to preserving it for the benefit of all.

Ruth Kyarisiima is the Programs officer at Strategic Response on Environmental Conservation (STREC)

EACOP Worries Uganda's Climate Safe Future

By Okwi John Peter

In an era defined by growing environmental awareness and collective commitment to combat climate change, global infrastructure developments must align with the global pursuit of a climate-safe future. 

The East African Crude Oil Pipeline (EACOP) which aims to transport oil from Uganda to Tanzania has come under intense scrutiny for its potential impact on the environment and its compatibility with the urgent need to reduce greenhouse emissions. 

While Uganda, a country known for its stunning landscapes, diverse wildlife and vibrant culture, has been making strides in the past years to develop a climate-safe future plan. 

However, the ongoing developments surrounding the East African crude oil Pipeline have raised significant worries about the nation’s commitment to environmental sustainability and ability to achieve its climate goals. 

According to the Uganda National Metrological reports (UNMA) 2019, the climate change country profile for Uganda shows a statistically significant decreasing trend in the annual rainfall with a temperature rise of 1.3 degrees delicious. The increasing temperatures have resulted in increased trends in the frequency of hot days and nights.

However, with the EACOP the climate crisis in Uganda stands to worsen as the full value chain emissions of the 25-year lifetime project is estimated to yield 377.6 million metric tons of CO2 in the atmosphere.

This includes construction phase 0.24Mt CO2, Operational emissions 6.55 MtCO2, refining stage 34.52 MtCO2 and Product use Emissions 330.71MtCO2. 

In this foreseen dangerous trajectory of Green House Emissions in the atmosphere, the Intergovernmental Panel on Climate Change (IPPC) assessments still warns nations of the dire rise in global temperatures that will consequently descend on humanity’s health and livelihoods which may further spark situations like flash flooding due to rise in sea levels, heat waves, food insecurity unforeseen worse case scenarios of poverty and death amongst populations. 

An increase in temperature or changes in rainfall intensity, distribution, and patterns are likely to have a direct effect on ecosystem functions, services, and species distribution and survival throughout Uganda.

Projected climate change is likely to adversely affect the hydrological cycle of forested water catchments by weakening their capacity to maintain water cycles and recharge groundwater.

This impact is likely to lead to a significant shift in flora and fauna distribution, disturb the ecological balance between species, cause habitat degradation due to the increased prevalence of invasive species, and increase the occurrence of wildfires. As a result, the overall availability of ecosystem-specific goods and services that support human livelihoods is expected to be adversely affected.

In the wake of all this, Uganda has to rethink its path toward promoting inclusive climate-safe and low-emission developments as nationally committed in program 9 of NDP3 and National Climate Change Policy 2015.

It should as well honour Article 2.1(c) of the Paris Agreement which calls on parties to make finance flows consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient developments.

Governments, corporations and export credit agencies giving insurance and guarantees to these atmospherically dirty fossil projects should reconsider their investment decision and prioritize investments that accelerate the transition to cleaner and more sustainable energy sources. 

It's only by making choices that prioritize both economic development and environmental protection can we hope to create a future that is truly climate-safe and sustainable for generations to come.

Okwi John Peter is the Programs Officer at Environment Governance Institute



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