Most Hard Hit African Countries Amid COVID-19 And Oil Price Plunge Named

Angola revises national budget and suspends CAPEX; Senegal’s first oil development faces debt arrangement challenges; Nigeria poised for a major revenue loss; Analysts predict Ghana will get half its projected revenue; Cameroon can expect to see a three percent drop in economic growth.

African oil-producing and reliant countries have been among the most hard hit by the COVID-19 pandemic and declining oil price. In particular, Senegal, Nigeria and Angola continue to face new challenges each day amid the threat of economic fallout.

Angola

In 2020, the Angolan government led by H.E. President João Lourenço, had set out to focus on economic diversification and uplift the country from nearly five years of recession. However, in the face of the oil price slump, the oil-reliant country has slowed the implementation of its planned economic reform strategy, which had included the privatization of state-owned companies and plans to reduce public debt to less than 60 percent of GDP by 2022 from approximately 90 percent in 2018 and, over 100 percent in 2019.

In response to the current market instability, the Angolan government which relies heavily on oil revenue has declared a state of emergency and made the decision to review its national budget. With this, it will object its budget on a reference oil price of $35 per barrel maximum - a significant cut from the initially drawn up $55 per barrel, Finance Minister Vera Davis de Sousa revealed on Friday, explaining that the country’s oil production is expected to tumble to 1.36 million barrels per day(bpd).

Further, Davis de Sousa shared that Angola would also be freezing 30 percent of its goods and services budget and its CAPEX would be suspended pending completion of the budget review. Meanwhile, the Angolan sovereign wealth fund has agreed to offer $1.5 billion on condition of future repayments through increased tax in the Bank of Angola’s growing debts.

“In this time, the Angolan economy will be best served by swift government action,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With the finance minister already confirming that the country’s economy will shrink by 1.21 percent this year, signally a fifth year of recession, Angola needs a solid action plan that involves intense renegotiation strategies with domestic and foreign creditors, if it is to make it out on the other side,” he added.

Senegal

Since discovering oil and gas in 2014, the West African country emerged as a major player in the global oil and gas industry, with it moving rapidly on setting up a new Petroleum code in 2019, creating new entities such as COS-Petrogaz and revising local content regulations. As a result, the country has enjoyed increased foreign investment and entry of international majors. However, global market turbulence has had a hard knock-on effect on Senegal’s promising oil future.

In particular, the country’s first oil development, the $4.2 billion Sangomar deepwater offshore project has suffered immense pressure as project partner FAR Ltd fails to finalize debt arrangements. Citing current environment as a major contributor, FAR said: “the company’s ability to close the Sangomar Project debt arrangements that were ongoing during this time have been compromised such that the lead banks to the senior facility have now confirmed that they cannot complete the syndication in the current environment,” adding that neither the junior nor mezzanine facilities that were being arranged will be able to be completed for the foreseeable future. Project operator, Woodside and partner Cairn, continue to explore other options to see through project development.

The current global environment also stands to slow down the country’s other activities in the sector specifically, the country’s first offshore licensing round which was launched earlier this year by the national oil company, PETROSEN as a means to further push the countries exploration and production.

Though the government is yet to share incentives for companies to continue activities, it has set up a fund to support the local economy.

“Senegal is undoubtedly one of the most promising oil and gas producers Africa has to offer. Led by H.E. President Macky Sall, the country is primed for new growth and investment. Despite what is happening in the global market, we hope to see Senegal build on its eight oil and gas discoveries, and enjoy first oil from the Sangomar oil field and first gas from BP’s Greater Tortue Ahmeyim LNG project,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.

As it stands, Senegal has also seen Cairn Energy reduce its planned investment to below $330 million from the initial forecast of $400 million.

Nigeria

Nigeria is projected to suffer substantial revenue losses. With it having planned for an oil  price of $57 in 2020, the low oil price presents massive struggles for Africa’s largest oil producer. To this point, Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari said at a crude oil price of $22 per barrel, high-cost oil producers like Nigeria should count themselves out of the business.

To this, the Atlantic Council has predicted that COVID-19 would cause the country to suffer the biggest lost in the continent with $15.4bn, representing about 4% of the nation’s GDP, a fair assessment considering the country has over $58bn in oil projects set to suffer delays or cancellations.

Though the country is yet to announce incentives for continued oil exploration and production, it is set on protecting its oil production which contributes generously to its economy. Specifically, the country’s petroleum regulator has, according to Reuters, ordered oil and gas companies to reduce their offshore workforce and move to 28-day staff rotations in order to avoid the spread of coronavirus.

“Nigeria is at risk to suffer the biggest loss. With the low oil price pushing the country to cut its budget and companies to reduce their CAPEX, the global is waiting to see Nigeria’s next move,” said NJ Ayuk, “Although it is hard to see the light for Nigeria, with the commitment of companies and resilience of the government, the country can certainly weather the storm, “ he added.

Ghana

The fall in oil prices coupled with COVID-19 has also had heavy impacts on Ghana’s oil industry, which has been on a path of steady growth for over 10 years since Kosmos Energy’s oil discovery west of Cape Three Points in the country’s offshore. And, more recently, Springfield Group’s historic 1.5 billion barrels.

Having set a benchmark of $58.66 oil price per barrel until the end of 2020, Ghana’s projected oil revenue is set to take a hit, with analysts already predicting the country will get half its projected revenue.

Oil production activity is also expected to see delays as Tullow Oil revises production targets and terminates the drilling contract with Maersk Drilling for the Maersk Venturer drillship offshore Ghana.

“If prices should stay around the US$30 mark, then the government is less likely to get half of the revenue that it projected. Already, we’ve seen Tullow cut back it’s production. So aside the international fall in crude oil price that we have to match with in selling our own bit of oil that we get as a country, production is also falling in our own shores,” said Paa Kwasi Anamua Sakyi, Executive Director at the Institute for Energy Security.

Cameroon

According to an analysis of the economic and financial impacts released by the Press Secretariat of the CEMAC Economic and Financial Reforms Programme, Cameroon can expect a three percent drop in growth in light of the global crisis.

Operations in the oil also stand to be affected with the country already seeing a turn. Specifically, with companies such as Tower resources declaring force-majeur on its development in the Thali block in the country’s offshore. The company also revealed that activity on the NJOM-3 offshore well may also be suspended.

Although the government has not announced any incentives for continued activity in the sector, it has acknowledged the non-oil commodities that will contribute the most to the country’s economic decline.

Now is an extremely challenging time for African oil development, the African Energy Chamber encourages Africa’s oil producing countries to adapt to the changes, implement incentives and plan for the future. This global crisis can only be worked through with continued commitment, support and collaboration.

Equatorial Guinea Grants Relief To Oil & Gas Services Companies

The Ministry of Mines and Hydrocarbons (MMH) of the Republic of Equatorial Guinea decided on the waiving of its fees for services companies in the country. This is the first action to be taken to support oil & gas services companies in Equatorial Guinea in the wake of the oil price drop caused by the coronavirus pandemic. Oil prices currently remain at around $20 a barrel, their lowest level since 1991.

“The Ministry of Mines and Hydrocarbons took the unanimous decision to waive its fees for services companies for a duration of three months,” declared H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons.

“We recognize that the oil sector continues to be the largest private sector employer in the country and want to give our local services companies the means to weather the storm and avoid any jobs being lost. While it is important to let market forces determine the future, the government does have a role to play in stimulating the market and creating an environment for these companies to stay strong, continue investing and create opportunities for our citizens,” he added.

Jobs security and the safety of Equatorial Guinea’s citizens have been put at the top of priorities for the MMH, which has further pledged to keep engaging with local and international companies to create the right kind of enabling environment for the sector to operate and grow despite current circumstances.

International operators will need to keep complying with local content requirements in Equatorial Guinea throughout the downturn, and make sure to work with the local services industry to adapt to new market dynamics. This is the first such measure to be taken in Equatorial Guinea, which will consider additional action to bring relief to its oil & gas sector.

The ongoing coronavirus pandemic has brought the world economy to a halt and critically affected oil demand. As a result, prices have been brought to their lowest levels since 1991, which brings considerable instability to African oil producers in the Gulf of Guinea.

Yesterday, a team from the Bioko Island Malaria Elimination Project (BIMEP) and the Baney Lab Research Center briefed Minister Obiang Lima on the progress of the malaria vaccine trial and current coronavirus tests being conducted in the facility.

The Minister advised the team that the lab will be upgraded with new equipment to meet the current needs of 1,200,000 residents, and pledged to purchase 1,200,000 Coronavirus lab kits so that the Ministry of Health can deal efficiently with any potential future cases and be ready for any possible scenario.

South Sudan Make Case For Oil & Gas Financial Transparency In Latest Report

The seventh Petroleum Report issued by the Ministry of Petroleum, Republic of South Sudan, provides an overview of world oil markets and fundamentals, price forecasts, oilfield reserves, and the ministry's marketing performance.

It forms part of continued efforts by Hon. Eng. Awow Daniel Chuang, the Minister of Petroleum, to promote openness and accountability in this crucial sector.

"We are trying to increase transparency in the country's oil and gas sector, specifically concerning the financial aspects. The Ministry of Petroleum has produced this journal which will provide all the information about our production, sales, and even the environment.

"We include all the opportunities in South Sudan regarding refineries, pipelines and other facilities. All this information is now available, and everyone will have access to it."

The report outlines the ministry's infrastructure plans, including refineries and storage depots and provides insight into how the country has advanced its sales of crude oil on the open market. South Sudan recognizes that the sector needs to continue to develop with buyer and market diversification, and a better understanding of global economics and pricing analysis. The ministry is aiming to establish on-line communications with global oil markets and the main world crude oil pricing center, Platts in London.

The release of the report follows closely the announcement of the country's first environmental audit of all operating oilfields. This will assist in rehabilitation efforts and prevent future problems. The ministry's exploration and production department is at the same time engaged in promoting new blocks ready for international investors looking for lucrative opportunities.

The aim of this one, and future Marketing Reports is to provide comprehensive information which clearly explains the monetization of South Sudan' crude oil. The emphasis is on transparency and full compliance with the country's legislative requirements for information disclosure.

The Petroleum Ministry has also improved its website, http://www.MOP-RSS.org/ which contains detailed information about the current oil-producing blocks, as well as the day to day operation of the department. All the information that investors may need is now available, including all the financial information dating from 2011, the country's independence.

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.

Africa Energy Forum To Address SDG Goal On Energy, Impact Of Energy Investment

The 2020 Africa Energy Forum (aef) will welcome Chairwoman Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All (SEforALL) and Co-Chair of UN-Energy, to officiate the opening sessions.

Mrs. Ogunbiyi said: “Africa is a region full of promise and economic opportunity. Yet as we begin the final decade to achieve Sustainable Development Goal 7, over 573 million people across Africa still do not have access to electricity which affects the region’s economic potential, health outcomes and prosperity.

Now is the time we must all come together to increase investment, make bold commitments and create new partnerships that can deliver affordable, reliable, modern and sustainable energy for all Africans.”

The 2020 programme

Taking place in Barcelona, Spain from 30th June – 3rd July, the 2020 agenda introduces dynamic sessions prioritising interactivity between panellists and delegates. Session formats include interactive Q&As, deep dives, roundtables and hard-hitting debates.

In line with the SDG7 goal of ensuring “access to affordable, reliable, sustainable and modern energy for all,” aef will host a stream dedicated to unpacking Africa’s role in achieving SDG7, debating how the continent can meet energy demands in light of global sustainability goals.

The Tech & Tools stream will examine how the 4th Industrial Revolution is set to play out for Africa, discussing the future of battery storage, disruptive technologies and artificial intelligence in 2020 and beyond.

A special Project signing session on the opening day will see partners and sponsors sign power projects with public & private sector partners in front of a live aef audience.

The EnergyNet Student Engagement Initiative returns to invite promising finance, law and engineering students from Africa and host country Spain to meet Energy Ministers, participate in workshops and learn about the opportunities for energy development in their respective countries.

Networking highlights

The Africa Challenge Cup will return to aef this June – a football tournament raising money for charity while providing an outstanding networking opportunity for sponsors and delegates. Barcelona is the ideal city to build on the success of the 2019 tournament and exceed our charitable contribution.

New for 2020, aef will host an Industry Quiz for teams of sponsors and delegates. Quiz rounds will take place throughout the agenda on the exhibition floor over the course of the 3 days. The wining team will be recognised with an awards ceremony and prize at the aef 2020 closing ceremony.

Over 2,000 decision-makers from the public and private sector are expected to attend the 22nd Africa Energy Forum this June. 

Niger’s Application To rRe-join EITI Approved

Following the country’s withdrawal from the EITI process in October 2017, the Government of Niger has committed to fully implement the 2019 EITI Standard. Its candidature was approved by the EITI Board today, making it the 53rd country implementing the EITI Standard, and the 26th in Africa.

Opportunities for EITI implementation

Helen Clark, Chair of the EITI, said: “Niger has played a role in the development of the EITI Standard and in efforts to improve extractive industry governance over the years. We welcome them back as an implementing country and look forward to the EITI contributing to public debate in Niger.”

Niger first became an EITI candidate country in 2007. The country implemented the EITI for 10 years, producing EITI Reports covering fiscal years 2005 to 2014. Niger’s decade of EITI implementation spurred tangible public finance reforms, including annual audits by the Cour des Comptes (auditor general) of the government’s extractives revenue collection.

Niger’s re-admission to the EITI is timely. EITI reporting provides an opportunity to improve public understanding of the way in which subnational transfers are allocated and to track the amounts due to each local government.

EITI implementation can also support the publication of contracts in the official gazette (Journal Officiel), as provided for by the country’s 2010 Constitution provisions (Article 150).

The EITI could provide a way of tracking those contracts not yet disclosed. Three extractives products in Niger – uranium, oil and gold – currently account for 8% of GDP and approximately 50% of the country’s export receipts.

Evaluating EITI implementation in Niger

Niger was first evaluated against the EITI Rules, which preceded the EITI Standard, and was deemed compliant in 2011. Niger’s Validation under the 2016 EITI Standard began in November 2016.

On 26 October 2017, the Board assessed that Niger had made inadequate progress overall in implementing the 2016 EITI Standard, and that it had not made satisfactory progress on civil society engagement.

As a result, the country was suspended from the EITI process. The Government of Niger announced its withdrawal from the EITI on 25 October 2017.

Pathway to implementing the 2019 EITI Standard

During the country’s withdrawal, the EITI has continued to work with government, companies and civil society in the country. In January 2019, Prime Minister of the Republic of Niger Brigi Rafini publicly announced the Government of Niger’s intention “to resume its place within the International EITI and to play, fully and responsibly, as it has always done, its role in the governance of the extractive industries.” On 11th October 2019, the government submitted its candidature application to the Board to re-join the EITI.

EITI implementation in Niger

Niger’s multi-stakeholder group (MSG) was reconstituted on 19 November 2018. It is composed of 30 members, 10 government representatives, one local government representative, nine mining companies and 10 civil society members.

EITI-Niger National Coordinator, Abdelkarim Aksar, said: “The EITI in Niger aims to provide up-to-date relevant information on the extractive industries in Niger in accordance with Articles 149 and 150 of Niger’s constitution. We are working towards transparency at the source. We will continue to support mechanisms to fully integrate transparency within government and company reporting systems".

The World Bank supported the selection of civil society representatives to the MSG. A three-pronged methodology was applied, namely: civil society mapping of active and recognised civil society organisations; the creation of an Action Platform for Civil Society Organisations involved in the Extractive Industries; and the nomination process for civil society representatives to the MSG.

Ali Idrissa, head of civil society organisation ROTAB in Niger, stated: “Local civil society supports Niger’s reintegration into the EITI process and had no objections to the process led by technical and financial partners to support the selection of civil society representatives to the MSG. We intend to hold government accountable for its commitments under the EITI.”

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Canada's Trudeau, African Leaders Discuss Conflict Resolution, Economic Security

Canada’s Prime Minister Justin Trudeau convened a meeting for African heads of state, foreign ministers and representatives of the United Nations and other multilateral bodies on Monday to discuss ways to secure peace across the continent as a necessary condition for prosperity. 

Trudeau, the 2020 chair of the United Nations Peacebuilding Commission, called for cooperation among international partners and governments to create economic opportunity and prosperity that is broadly shared, “…as a way not just of countering the pull of extremism in some places or the cynicism of populism, but as a way of building a real and tangible future for countries around the world.”

The breakfast meeting, which was held on the sidelines of the 33rd African Union Summit in Addis Ababa, was intended to strengthen the Commission’s partnership with the African Union (AU) and to better integrate African priorities in conflict prevention and bolstering economic security. Among issues discussed were the role that international financial institutions and youth job creation can play in Africa in averting extremism and conflict; and the AU leadership in peacekeeping and peacebuilding efforts.    

The talks, titled Sustaining Peace and Economic Security, aligned with the Summit’s theme: Silencing the Guns: Creating Conducive Conditions for Africa’s Development.   

Trudeau acknowledged that one of the biggest challenges both developed and developing countries face is the perception that governments are indifferent.

“In this time of change, in this time of transformation of the global economy, time of conflict, time of climate conflict, people worry that the system has no place for them and isn’t providing them with what they need,” the Canadian Prime Minister said. 

Among participants were President Roch Marc Christian Kabore of Burkina Faso; the Vice President of Gambia, Isatou Touray; President of the United Nations General Assembly, Tijjani Muhammad-Bande, Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa, and the foreign ministers of Sierra Leone and Rwanda.

President Kabore offered his reflections on the issues. Burkina Faso is one of several nations in the Sahel region that have seen economic growth adversely affected by conflict and instability.    

In opening remarks, African Development Bank President Akinwumi Adesina noted the shifting nature of conflicts across Africa. While the number of outright wars in Africa has declined substantially, they have been replaced with greater fluidity with rising cases of terrorism, extremism, conflicts from non-state actors.

The root causes of conflict, according to Adesina, include “rising inequalities, lack of political inclusiveness, extreme poverty, management and control over natural resources, youth unemployment that causes social unrest, climate change, to name a few.”

The Bank is at the forefront of helping to address fragility in Africa with several initiatives currently underway. So far, $3.8 billion has been allocated to address issues of fragility through the Transition State Support Facility.  

Adesina recognized the role Canada plays in enabling the Bank’s work.

“The successful replenishment of the Bank’s African Development Fund 15 - to which Canada contributed substantially with $355 million - will allow the Bank to deploy an additional $1.2 billion to address fragility, strengthen resilience and sustain peace and economic security,” he said. 

Here Are 3 Sessions To Watch Out For At Nigeria International Petroleum Summit

Three years after the Federal Executive Council of Nigeria took the final decision to approve the Nigeria International Petroleum Summit (NIPS), an African Petroleum Technology and Business Conference, the third edition of the event is set to hold in its capital city, Abuja from 9 - 12 February 2020.

The event, which is highly touted to be the official government-endorsed event has been designed to be the rendez-vous for Nigeria and indeed, Africa's oil and gas sector where principal decision-makers from the public and private sectors exchange innovative ideas.

The African Energy Chamber, as the credible voice of the African petroleum industry and the foremost African advocacy association representing all facets of the African oil and gas industry, will be on the ground to bring you the front row access to the over 20 sessions that will hold in the 4-day event.

Here are 3 of the top-recommended sessions to watch out for, which we believe will have a wide global impact and firmly place the West African country on the top burner, and certainly on the continent.

Launch of the National Gas Transportation Network Code

Nigeria’s Ministry of Petroleum Resources, in conjunction with the Department of Petroleum Resources, will formally launch the National Gas Transportation Network Code as part of the opening events of the NIPS.

Nigeria recently proclaimed the year 2020 as its year of gas, a move that NJ Ayuk, Executive Chairman of the African Energy Chamber noted could become “the most relevant political action anyone has taken in Nigeria in years”.

The National Gas Transportation Network Code aims to ensure that the wrong quality of gas does not go into the pipeline, in addition to guaranteeing gas pipeline integrity, open access to pipelines and common understanding on metering.

It is also expected to provide a uniform platform in terms of guidelines for agreements between buyers and sellers which will ensure transparency and eliminate existing bottlenecks.

We look forward to the launch and hope that it will rightly position Nigeria to experience 2020 as its Year of Gas. 

Ministerial Session: Technology, Policies and Investment – A Conversation

This is perhaps the most important session as it will bring together Oil and Gas Sector cabinet Ministers from Equatorial Guinea, Gabon, Egypt, Libya, Algeria, THE Republic of Congo, Mali, Mauritania and Nigeria, and the OPEC Scribe in a genuine and honest conversation that will perhaps speak to the overarching theme of this year’s conference: “Widening the Integration Circle”.

It will seek to provide a high-level response to such questions as: how Africa can evolve into a significant actor on both the regional and international energy stage and how oil-producing and oil-consuming countries can better cooperate in Africa, amongst others.

Governors’ Forum: What More Can We Expect from the Oil Bearing States?

This session will put the Governors’ of oil-bearing states in Nigeria on the spot during the Governors’ Forum segment to match the opportunities as oil-bearing states and interrogate their various roadmaps on what should be and where they are headed to.

The discovery of oil and gas deposits in Nigeria has been viewed as both a blessing and a curse for the Nation with the insecurity seen as the greatest challenge right next to environmental degradation.

The expected outcome of this session will be the new solutions that will be proffered to create a conducive environment for the investments that will grow the Nation’s hydrocarbon reserves and drive development.

Last Words

James Shindi, the Managing Director of Brevity Anderson, the event producer, in reference to the conference, recently stated that “It has been our tradition from inception. We gather the best brains and key policymakers from across the continent to chart the way forward and posit strategies for the management of Africa’s huge hydrocarbon resources.” We look forward to this year’s edition and will be on the ground to appraise the delivery.

African Economic Outlook 2020 Positive Despite External Shocks

Africa’s economic growth remained stable in 2019 at 3.4 percent and is on course to pick up to 3.9 percent in 2020 and 4.1 percent in 2021, the African Development Bank’s 2020 African Economic Outlook (AEO) revealed Thursday.

The slower than expected growth is partly due to the moderate expansion of the continent’s “big five” — Algeria, Egypt, Morocco, Nigeria, and South Africa – whose joint growth was an average rate of 3.1 percent, compared with the average of 4.0 percent for the rest of the continent.

The Bank’s flagship publication, published annually since 2003, provides headline numbers on Africa’s economic performance and outlook. The 2020 edition, launched at the Bank’s Abidjan headquarters, was attended by former Liberian president Ellen Johnson Sirleaf, African ministers, diplomats, researchers, and representatives of various international bodies.

Johnson Sirleaf commended the Bank for upholding the confidence of the people of the continent “… because we trust you. As simple as that. Because we trust you to share our vision. We trust you to understand our limitations.”

Referring to Africa’s fastest-growing economies, she said, “There are stars among us…and we want to applaud them. We want to see more, particularly for countries like mine, which have been left behind, so that more can be done to give them the support that they need.”

In 2019, for the first time in a decade, investment expenditure, rather than consumption, accounted for over 50% of GDP growth. This shift can help sustain and potentially accelerate future growth in Africa, increase the continent’s current and future productive base, while improving productivity of the workforce.

Overall, the forecast described the continent’s growth fundamentals as improved, driven by a gradual shift toward investments and net exports, and away from private consumption.

East Africa maintained its lead as the continent’s fastest-growing region, with average growth estimated at 5.0 percent in 2019; North Africa was the second fastest, at 4.1 percent, while West Africa’s growth rose to 3.7 percent in 2019, up from 3.4 percent the year before.

Central Africa grew at 3.2 percent in 2019, up from 2.7 percent in 2018, while Southern Africa’s growth slowed considerably over the same period, from 1.2 percent to 0.7 percent, dragged down by the devastating cyclones Idai and Kenneth.

Urgent call to address Africa’s education, skills mismatch

The 2020 AEO, themed Developing Africa’s workforce for the future, calls for swift action to address human capital development in African countries, where the quantity and quality of human capital is much lower than in other regions of the world. 

The report also noted the urgent need for capacity building and offers several policy recommendations, which include that states invest more in education and infrastructure to reap the highest returns in long-term GDP growth. Developing a demand-driven productive workforce to meet industry needs, is another essential requirement.

“Africa needs to build skills in information and communication technology and in science, technology, engineering, and mathematics. The Fourth Industrial Revolution will place increasing demands on educational systems that are producing graduates versed in these skills,” the report noted.

To keep the current level of unemployment constant, Africa needs to create 12 million jobs every year, according to the report. With rapid technological change expected to disrupt labour markets further, it is urgent that countries address fundamental bottlenecks to creating human capital, the report said.

“Youth unemployment must be given top priority. With 12 million graduates entering the labour market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” said Akinwumi Adesina, African Development Bank President, who unveiled the report.

“Let’s look at the real lives beyond the statistics. Let’s hear their voices, let’s feel their aspirations.”

Although many countries experienced strong growth indicators, relatively few posted significant declines in extreme poverty and inequality, which remain higher than in other regions of the world.

Essentially, inclusive growth — registering faster average consumption for the poor and lower inequality between different population segments — occurred in only 18 of 48 African countries with data.

“As we enter a new decade, the African Development Bank looks to our people. Africa is blessed with resources but its future lies in its people…education is the great equaliser. Only by developing our workforce will we make a dent in poverty, close the income gap between rich and poor, and adopt new technologies to create jobs in knowledge-intensive sectors,” said Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the Bank.

The African Economic Outlook provides compelling up-to-date evidence and analytics to inform and support African decision makers. The publication has built a strong profile as a tool for economic intelligence, policy dialogue and operational effectiveness.

E. Guinea To Boss Cross-Border Gas Cooperation In Gulf Of Guinea

Equatorial Guinea is positioning itself as a hub for gas in the Gulf of Guinea and hopes to deliver where others have failed: developing the first successful cross-border gas venture on the continent.

Gas is a key priority for Equatorial Guinea and its neighbors. While Cameroon brought on stream Africa’s first Floating LNG project in 2018, Nigeria has declared 2020 the Year of Gas and both countries continue to push for the development of a gas-based economy.

On its side, Equatorial Guinea launched Africa’s first offshore gas mega hub last year when it signed Definitive Agreements with Marathon Oil, Noble Energy, Atlas Petroleum, Glencore and Gunvor to process stranded gas from its Alen and Aseng gas fields, and offset production decline at the country’s Alba field.

The project is of strategic importance for Equatorial Guinea because the Alba field had been until now the sole supplier of gas to its Punta Europa complex, which feeds several industries including an LNG train and a methanol production unit, both seeking expansion.

But such receiving infrastructure could also be a godsend for Nigeria and Cameroun who both have several stranded gas fields right across Equatorial Guinea’s maritime boundary and in need of off-take infrastructure.

Equatorial Guinea’s vision for gas is simple: it wants to become that gas mega-hub for the sub-region by developing several offshore hubs to monetize neighboring gas reserves and develop downstream gas industries spurring industrial development and economic growth.

At home, its industries need gas. EG LNG needs long-term gas supplies for its existing LNG export facility and is considering the development of a second LNG train. Meanwhile, the Atlantic Methanol Production Company has agreed to support the ongoing Year of Investment initiative by expanding its methanol production unit and diversify output into methanol derivatives.

As demand for gas grows, Equatorial Guinea’s message to its neighbors is very straightforward: we provide the processing and off-take infrastructure, you provide the feedstock.

While similar projects have been developed in Africa before, they have fallen short of expectations. The West Africa Gas Pipeline for instance is the first regional natural gas transmission system on the continent, yet remains unable to deliver stable gas supplies to Benin, Togo and Ghana.

The gas mega hub Equatorial Guinea is developing in the Gulf of Guinea will have its own challenges. Nigeria does not belong to OHADA and operates under a different legal regime than that of Equatorial Guinea and Cameroon. The three countries also have different petroleum legislations, fiscal regimes and PSC terms. These are all factors that need to be addressed to turn vision into reality.

In a multilateral meeting in Malabo on Wednesday, H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, took a proactive step in creating an Executive Committee tasked with the acceleration of the progress of the gas mega hub.

The team is also tasked with ensuring that gas be transported in and outside of the region. The meeting, which gathered Marathon Oil, EG LNG and state-owned entities like GEPetrol and Sonagas, sends a clear signal that a public-private partnership is in the making.

What is left to be seen is if Minister Obiang Lima can put a deal together to bring stranded, associated and even flared Nigerian gas to EG LNG on Bioko Island. The same will be said of the Etinde gas from Cameroon.

Nigeria and Cameroon have enough gas, but its viable commercialization lies across the neighboring maritime border with a facility like EG LNG.

Similarly, the ability of Nigerian Petroleum Resources Minister H.E Chief Timipre Sylva to make a deal work is key to the realization of Nigeria and Equatorial Guinea’s gas dreams.

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