Local Content Policies Set To Shape Energy Investments In Senegal

As Senegal’s first oil and gas projects are under-development and the first production is expected within two years, the African Energy Chamber conducted this week a working visit in Dakar to promote investment into the country and support local content development and capacity building.

Led by Executive Chairman NJ Ayuk, the African Energy Chamber’s delegation advocated for local content as a pillar of the industry’s sustainability efforts and offered all its support to continue pushing and financing Senegal’s initiatives to build capacity and build a new generation of Senegalese oil & gas workers and managers.

“Oil companies have an unmatched ability, and a profound responsibility, to support H.E. Macky Sall’s bold vision in shaping an economy that works for all Senegalese and preserves their freedoms,” said NJ Ayuk.

The team met with H.E. Macky Sall, President of the Republic of Senegal; H.E. Mouhamadou Makhtar Cissé, Minister of Petroleum and Energies, Ousmane Ndiaye, Permanent Secretary of COS-Petrogaz; Aguibou Ba, Director General of the National Institute for Petroleum and Gaz (INPG) and the majority of the oil and gas operators and service companies.   

“Moving closer and closer to becoming a large-scale producer of oil and gas, Senegal’s story is an inspiring one. And, as a hotspot for oil and gas development, it is only fitting that the nation cements market-driven local content frameworks that are rooted in capacity building and are driven by the determination to transform practices in its energy sector,” declaired Nj Ayuk.

“That is why initiatives such as the INPG are important in ensuring that industry revenue benefits the state while also guaranteeing employment for citizens. The INPG is a true social contract bringing the private and public sector together to plan for a prosperous future for Senegal,” he added.

The Chamber’s working visit coincided with that of US Secretary of State Mike Pompeo, during which state-owned SENELEC and GE signed an agreement for the development of 300MW of gas-to-power capacity, the modernization of Senegal’s power plants and the creation of a maintenance centre in Senegal.

In line with the US’ interests to increase cooperation with Africa, the Chamber reiterated the industry’s call for continued improvements in the ease of doing business and better operating environments for foreign investors.

“President Trump dispatching Secretary of State Pompeo and US companies to Senegal is a brilliant move. US companies understand that investing in Senegal is good business and a sustainable corporate strategy.

President Macky Sall’s government has built on positive trends to maximize foreign investments. This includes a commitment to transparency, improving safety and security, strengthening the macroeconomic environment, investing in quality education and skill development in science, technology and innovation, and avoiding the Dutch disease,” added Ayuk.

Last year, the African Energy Chamber and Centurion Law Group hosted a local content forum in Senegal, calling attention to local content development in the country. The ongoing visit serves as a follow up and a showcase of the Chamber’s continued commitment to the growth and development of African economies through ensuring that Africa’s natural resources benefit Africa’s people first.

“Senegal’s emergence as a key player in the oil and gas industry has been remarkable and, as this growth continues to surge, it is important that local communities have a seat at the table, It is also important that we continue to create an enabling environment investors and the oil sector. Cutting unnecessary red tape and fast-tracking project approvals will give the energy operators a boost,” said NJ Ayuk.

“This, however, is a goal that is achievable only through the collaboration of the private and public sector. Local content is value creation and it is pertinent that Senegal put in place policies and frameworks that will see its people benefit from its hydrocarbon industry,” he added.

Last month, Woodside Energy got the green light for its $4.2bn Sangomar oil project, Senegal’s first offshore oil venture where the first production is expected in 2023, with a capacity to reach 100,000 bopd. The Phase 1 development concept for the Sangomar field is a stand-alone FPSO facility with subsea infrastructure. 

Meanwhile, works are ongoing at the Greater Tortue Ahmeyim FLNG project, whose phase 1 will see the commissioning of a 2.5 mtpa facility by 2022. This month, Kosmos Energy, BP, Petrosen and SMHPM signed an agreement with BP Gas Marketing for the supply of 2.45 mtpa of LNG over 20 years.

The MSGBC Basin has become sub-Saharan Africa’s hottest exploration frontier. Senegal is currently holding a licensing round to further attract investment into its acreages and boost existing reserves. The round is expected to generate tremendous interest from foreign investors and further confirm Senegal as a new African energy leader.

Locusts, Climate Change & Oil Exploitation

On Sunday, February 9, 2020, media reports indicated that Uganda had been invaded by locusts. That same day, the 33rd African Union (AU) Heads of State and Government Assembly commenced in Addis Ababa, Ethiopia.

The two-day meeting was held under the theme: Silencing the guns: Creating conducive conditions for Africa’s Development.

As the leaders deliberated on topics such as conflicts in the Sahel region, sustainable funding of Africa’s development agenda and others, scores of Ugandans panicked over the locust invasion.

A government inter-ministerial met to discuss measures to address the locusts, which the public was informed could eat food that could feed 2,500 people per year!

In addition, army officers and others were shipped off to Karamoja, the site of the reported invasion, to address the threat. Several other efforts were engaged in.

LOCUSTS AND CLIMATE CHANGE

While some of the above was ongoing, the AU Heads of State and others deliberated on matters that would improve the wellbeing of African citizens.

However, they did not discuss how African Heads of State in alliance with national and international agricultural, oil and other companies are contributing towards climate change and are exposing Africans to more potential locust invasions.

With the permission of African leaders, activities such as destruction of forests such as Bugoma in Uganda for sugarcane growing and exploitation of fossil fuels (oil, coal and gas) including in eco-sensitive areas such as national parks, lakes, rivers and forests in Uganda, Tanzania and Nigeria among others are ongoing in Africa today.

Both the burning of fossil fuels and deforestation are drivers of global warming and consequently, climate change.

Yet climate change is part of the reason that Uganda, Kenya and other Eastern African countries are in the predicament they are in today. Moreover, this is a predicament that African countries are ill-equipped to deal with.

As pointed out by the UN Secretary General, Mr. Antonio Guterres, warmer cyclones caused by climate change have created the perfect breeding conditions for locusts. Per information from the Food and Agricultural Organisation (FAO), the warmer cyclones resulted in rains in Oman, which enabled the breeding of the desert locusts. 

The locusts invaded Eastern Africa thereafter and have caused serious damage. FAO estimated that 200 billion locusts invaded Kenya. The locusts, which eat their own weight in food every day, destroyed pasturelands which had only been rejuvenated after drought.

Further, the damage caused by the locusts in Somalia was so much so that the country declared a state of emergency after the insects damaged about 70,000 hectares of food supplies in the country and in Ethiopia.

Experience shows that when food and pasturelands, which are major sources of income for many households are destroyed, other impacts follow.  Incomes reduce, children’s education suffers as parents lack incomes to pay school fees, and even domestic violence due to increased poverty in homes is seen.

OIL AND CLIMATE CHANGE

Now, several countries in Africa including Nigeria, Angola, Cameroon Niger, Algeria, Equatorial Guinea, Ghana, the Democratic Republic of Congo (DRC) and others are oil producers. In addition, several countries including Uganda, Kenya, Tanzania, Togo and others are planning or are undertaking activities to become coal, oil and gas producers.

The above countries argue that they need to produce coal, oil and gas not only to create jobs but to generate revenues to support their respective economies among others.

However, the burning of fossil fuels such as coal, oil and gas is the biggest contributor to climate change.

As earlier noted, climate change has been cited as the cause of the biggest locust invasion to be seen in Kenya in 70 years and in 25 years for Somalia and Ethiopia.

To continue to exploit oil to exacerbate climate change is to put the lives of African citizens at risk. Moreover, poorer African states are more vulnerable to the impacts of climate change. African states have too few resources to manage climate change impacts.

Indeed, the Ugandan government’s response to the locust invasion in Uganda on Sunday, February 9, 2020, was a testament to this. The country had no standby expert manpower and equipment such as airplanes to spray the locusts. Communities in Teso reported that they resorted to making noise to scare the locusts away.

One may argue that oil revenues could be used to make African states climate-resilient. However, experiences from Nigeria, Angola and other oil-producing countries show that oil revenues are never used for the benefit of citizens. Instead, they are largely abused by corrupt government officials at the expense of citizens’ wellbeing.

In line with available evidence that says that up to a 75% of known fossil fuel reserves including oil, coal and gas must be left unexploited for the Paris climate target to be attained, African countries must consider leaving fossil fuels unexploited. They should invest in other economic activities such as agriculture, tourism and others.

Further, in line with the AU’s 2020 theme, African countries should demiltarise oil production and should stop attacking citizens that critique oil activities in Africa.

The writer is the Senior Communications Officer at Africa Institute for Energy Governance (AFIEGO).

Government Strives To Increase Participation Of Ugandans In Oil Industry

By George Busiinge 

The Ministry of Works and Transport has heightened efforts to skill vulnerable youths in operating heavy load equipment to tap the public infrastructure employability.

John Baptist Ocola, a trainer from the Ministry of Works and Transport says the country has limited skilled operators of heavy equipment machines due to limited training institutions that offer such specific skills.

He says they have now partnered with Destiny Technologies Heavy Load Plant Services which has its head office in Hoima municipality to equip vulnerable groups mainly school dropouts and disadvantaged unemployed youths to equip them with skills on how to operate such machines.

He made the remarks Friday morning during the launch of the 2020 Heavy Equipment Operators training at Bulemwa Training Field in Bujumbura division.

Denis Kisha, the director for Destiny Technologies Heavy Load Plant Services has said due to the support of trainees and equipment from the Ministry of Works and Transport, they have managed to register 150 trainees for this batch the highest number ever since they stated.

He observed that the two-month course is highly marketable since the country is undertaking many construction projects in the roads and extractives sectors.

The trainees were drawn from different parts of the country. Alfred Ochen and Daniel Opiyo some of the trainees expressed high hopes of employability after the training.

The government of Uganda has in the recent past heightened efforts to provide hands-on skills to its nationals to curb the challenge of unemployment which is currently at 82%.

Bunyoro Women Decry Seclusion From Oil & Gas Activities

By Busiinge George

Women from the oil-rich sub-counties of Buseruka and Kabaale in Hoima district are still oblivious of activities and opportunities accruing from the discovery of oil in the Albertine Graben.

Uganda discovered approximately 6.5 billion barrels of commercially viable oil deposits in the Albertine Graben raising expectations for the industry to boost competitiveness among homegrown investors and stimulate inclusive development.

Years later, the government embarked on a programme for the development of crucial infrastructural projects in preparation for the production of oil. The crucial projects include the construction of the oil refinery in Kabale-Buseruka, the East African Crude Oil Pipeline Project and Hoima International Airport.

Indigenous entrepreneurs were also registered on the National Oil and Gas database as a precursor for them to benefit from the USD 20 billion (74 trillion Shillings) funding that the World Bank sunk in the development of infrastructure projects.

But several women have expressed ignorance of activities taking place in the Oil and Gas sector and demanded initiatives that are specifically designed to empower women and enable them to participate in the development of the sector. Many say that they have not been informed or even empowered to tap into opportunities.

Eveline Nyangoma, a resident of Buseruka trading centre questions why all training held over the years was targeting men, disregarding the potential and ability of women to contribute to the growth of the sector.

Annet Kobusinge, another resident observes a need for the government to engage women in the Albertine Graben and empower them with the required vocational skills to work in the sector.

Racheal Katusabe, a resident of Kabaale trading centre says that even the few training and workshops conducted in Hoima town targeted urban dwellers living out the population in rural areas, which comprises mainly women.

She says there is still a need for massive sensitization on how best women can learn and know more about available opportunities in the oil and gas sector.

Stella Buwala also a resident of Kabaale says that although women are eager to work in the oil and gas sector, they do not have information about the sector calling on the government to fully engage and empower local women in the Albertine on what they can do to benefit from the sector.

Buseruka Sub County Chairperson Ali Tinkamanyire acknowledges that most rural women have not been prepared to tap into the opportunities and calls for collective efforts between the government leaders and the oil companies to sensitize women on the available opportunities in the sector.

Hoima District Chairperson Kadir Kirungi says that leaders have severally advised the women to form groups so that they can be easily supported to supply goods and services, but most of them have adamantly declined yet they cannot supply the oil sector individually. He says that much is needed to change the mindset of the rural women.

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