African Energy Developments Demand Sustained Investment with new projects in Mozambique, Uganda, and Senegal
April 13, 2021 | 0 Comments
|A recent uptick in direct investment activities in Africa’s energy sector sheds light on the role of sustained investor interest in catalyzing socio-economic growth|
In the past twelve months, the African energy sector has seen several encouraging developments – in the form of both Foreign Direct Investment (FDI) and strategic partnerships – that have advanced the sustainable development of its natural resources. In fact, despite a global downturn in investment in 2020, FDI flows to developing economies accounted for 72% of global FDI, the highest share to date. Given the magnitude of Africa’s oil and gas reserves – not to mention its abundant renewable resource wealth – the continent remains a highly attractive market for inbound investment, which is vital for its growth.
Take Uganda, for instance, which is home to one of the largest onshore discoveries in sub-Saharan Africa. Following multiple petroleum discoveries in Uganda’s Albertine Graben – estimated to contain 6.5 billion barrels of oil, of which 1.4 billion are considered recoverable – foreign investments into the country are expected to reach nearly $20 billion. Last April, Total E&P Uganda B.V. signed a Sale and Purchase Agreement with Tullow Oil PC, through which Total will acquire Tullow’s entire 33.34% interests in Uganda’s Lake Albert development project and the East African Crude Oil Pipeline (EACOP). Five months later, the Ugandan Government and Total signed a host government agreement for EACOP, representing a significant step toward reaching a final investment decision. The deal pushes along an extended development process – slowed by infrastructure issues, tax complications, then COVID-19 – that not only promises to bring first oil by 2022, but also provides a pathway to monetization via associated transport infrastructure.
In addition to developments at Lake Albert, the Ugandan Government has proven its commitment to attracting FDI to its hydrocarbon sector through its second licensing round held last year, as well as its invitation to local and foreign entities to forge joint-venture partnerships with the Government. By prioritizing the establishment of mutually beneficial partnerships, the emerging East African producer aims to facilitate the successful transfer of skills, knowledge and technology, initiating an influx of technical expertise and working capital into the country.
“Those who have been locked out from access to opportunity want the same from the energy sector that the energy sectors want from governments. We must not forget local content, local jobs, local opportunities especially for young people and women” Stated NJ Ayuk Executive Chairman of the African Energy Chamber ,
Meanwhile, in West Africa, Senegal has been reaping the rewards of a long-standing partnership with Germany, which has resulted in more than one billion Euros in funding, including significant support for small-scale power plants and renewable energy projects. Holding sizeable potential for solar and wind energy development, Senegal serves as a regional leader in renewable deployment as a means of rural electrification. Indeed, energy is a central component of poverty alleviation across Africa, with electricity access enabling greater independence, clean cooking and potable water, as well as dramatically improving the well-being of individuals, businesses and communities alike. Rural populations are cognizant of the challenges posed by a lack of stable electricity supply – increased urban migration, lack of access to basic services, low economic competitiveness, to name a few – and distributed renewables can represent the fastest and least expensive path to electrification.
European interest in Senegal has shed light on and served as a model for co-operation opportunities between renewable-rich African countries and developed partners, which offer cutting-edge technologies and technical expertise to transform raw resources into viable off-grid and mini-grid solutions.
Furthermore, while the cost of deploying renewable technology has never been lower, the availability of renewable-focused capital has never been higher. Investment in commercial and industrial solar has demonstrated resilience against the pandemic, continuing to be seen as a safe investment in light of rising utility costs and increasing distribution of both solar and financial technologies. Yet resource potential and low costs of equipment are not enough; Senegal and other resource-rich African nations require active investor interest and strong government support to unlock diversified energy mixes. In turn, a lack of investment represents a pointed threat to the achievement of long-term energy security.
“Young people and women have shown their great resilience, and it is our hope we close these deals in the renewable energy sector, Africans can have a sense of some hope that they will be included in the industry contracts and opportunities. It is no longer correct for the African to be the last hired and the first fired” Concluded Ayuk.
Moreover, without sustained levels of FDI continuing to move the needle on oil, gas and renewable developments, energy export revenues run the risk of being stranded and resources left undeveloped. For emerging producers like Uganda – as well as Tanzania, Kenya, Mozambique, among several others – this would mean foregoing critical government revenues that could aid in a much-needed, post-COVID-19 economic recovery. FDI is vital to Africa’s growth, and while it may be challenging to procure capital in a tepid global economy, it is even more difficult not to. Yes, COVID-19 has put emerging producers in a tough spot: new exploration is seen as risky, and new producers lack existing assets or low-cost development of marginal fields on which to fall back. However, it is not an option to slow or postpone time-sensitive developments that promise to harness natural resource wealth and make sustainable improvements in standards of living across the continent. Africa requires a sustained flow of investment and has proven time and again that it offers the scope of projects and magnitude of resources that are worthy of foreign capital.
The Securities and Exchange Commission’s (SEC) circular on the trading of foreign securities by investment platforms in Nigeria
April 13, 2021 | 0 Comments
By Ibrahim Moshood*
The apex regulator of securities in Nigeria, the Securities and Exchange Commission (“SEC”) has issued a circular, with respect to technology investment platforms providing the Nigerian public with access to foreign securities. The circular dated 8 April 2021, issues a strong warning to these investment platforms and Capital Market Operators (“CMOs”) in partnership with them to provide brokerage services. Both categories of players in the financial space were warned to desist from providing the Nigerian public, with access to foreign securities. This is pivoted on the grounds that these securities are neither registered with the SEC nor listed on the Nigerian Stock Exchange (“NSE”).
From 2018, technology start-ups have pioneered major disruptions of the financial space in Nigeria. These disruptions have been lauded by Nigerians, particularly at a time when there has been a persistent devaluation of the Naira. Savvy and upwardly mobile Nigerians have then opted to use these technology platforms, to save in foreign currencies and also purchase foreign stocks that are being offered. Some of these technology investment platforms include Trove, RiseVest, Chaka and Bamboo etc. They typically partner with CMOs in Nigeria for their expertise and already-procured brokerage licence.
As a background, recall that in December 2019, the SEC had published a statement to notify the Nigerian public of its interim orders to restrain an investment platform called Chaka Technologies Limited (“Chaka”). This order came about as a result of the advertisement and sale of foreign securities of companies such as Google, Alibaba, Facebook, Tesla etc. in Nigeria by Chaka. The SEC had informed the Investment Securities Tribunal (“IST”) that Chaka had offered securities for sale “outside the regulatory purview of the Commission and without requisite registration as stipulated by the Investment and Securities Act (“ISA”).
Chaka responded to the allegations above by releasing a press statement, denying the wrongdoing entirely. However, in March, Chaka announced that it had obtained a newly created licence from the SEC which allows it to offer the services above i.e. advertising and sale of foreign securities to the Nigerian public.
Notwithstanding the development above, the SEC had kept quiet for months on this issue until this recent circular, which Nigerians have reacted to as a deliberate attempt to stifle innovation by the regulators, create a multiple licensing regime, an inordinate drive for revenue and a shoddy attempt at stabilizing exchange rate of the Naira.
Currently, two major questions should be addressed by the SEC.
- Is the sale of foreign securities by these platforms prohibited in Nigeria?
- Is there a licence issued by the SEC or some other regulatory agency that would allow these investment platforms carry on the business of selling foreign securities in Nigeria?
Hopefully, the SEC will release a more informative circular or press statement clarifying what investment firms should do to continue offering these foreign securities. In the meantime, investors and investment firms alike are enjoined to consult professionals for more clarity.
*Associate, Centurion Law Group,.
U.S. Africa Energy Forum 2021 Launches: Promotes U.S. Role as Primary Investor in African Energy
April 7, 2021 | 0 Comments
|The multi-day forum unites U.S. and African policymakers, energy executives and industry leaders to create new linkages and foster discussions|
The U.S. Africa Energy Forum 2021 – organized by Africa Oil & Power, in partnership with the African Energy Chamber’s U.S.-Africa Committee – will foster alignment between U.S. and African governments’ energy policies and highlight African oil, gas, power and renewable projects across the energy value chain for U.S. investors; the multi-day forum unites U.S. and African policymakers, energy executives and industry leaders to create new linkages and foster discussions that drive long-term policy formation and project execution; the in-person, two-day summit and gala dinner will be hosted in Houston, Texas (October 4-5, 2021) and an online seminar and in-person networking event will be held in Washington D.C. (July 12).
Africa Oil & Power (AOP) (www.AfricaOilAndPower.com) and the African Energy Chamber are excited to announce the launch of the first-ever U.S. Africa Energy Forum (USAEF). This event aims to create deeper cooperation between the U.S. and Africa on energy policy, to reach alignment on long term sustainability goals, to stimulate greater American investment in the African oil, gas and power sectors, and to engage and reposition the U.S. as the primary partner of choice for African energy developments.
Under the theme “New Horizons for U.S. Africa Energy Investment” the forum will explore diverse foreign investment and export opportunities across the continent, including natural gas as a vital fuel for the energy transition; energy storage and battery minerals; Africa’s place in global energy supply chains; the benefits of the African Continental Free Trade Area; evolving energy technologies and how they relate to the future role of petroleum resources; and on-and off-grid power developments.
An online seminar and in-person networking event will be held in Washington D.C. on July 12, 2021, building up to the in-person U.S. Africa Energy Forum summit and gala dinner, to be hosted in Houston, Texas, on October 4-5, 2021. Africa Oil & Power and the African Energy Chamber invite all U.S.-based companies with an interest in engaging with African industry leaders and project developers to participate in the USAEF Houston summit.
This initiative comes at an important juncture in U.S.-Africa relations. The Biden Administration’s announcements of its intentions to proactively build a stronger U.S.-Africa partnership coincides with the fact that African projects are seeing rising interest from U.S. companies and lending institutions alike. The USAEF event is thus dedicated to enabling dialogue between its participants that advances these developments.
“Our mission has always been to showcase the resource potential that Africa has to offer while at the same time showing its growing preference for sustainable energy policies and technologies. Toward that end, we hope it becomes evident that Africa does not just want investment capital: it wants smart capital and an accompanying partnership with the investors,” says James Chester, Senior Director of Africa Oil & Power. “The U.S. Africa Energy Forum represents the first-of-its-kind opportunity to catalyze U.S. participation in Africa’s energy transformation – via technology, policy support, capital injection and skills development – and turns a new page in the chapter on global energy investment.”
In partnership with the African Energy Chamber’s U.S.-Africa Committee, AOP will introduce American companies to African opportunities and advance an agenda of sustainable, long-term investment in African energy and other sectors by U.S. organizations.
“The rise in support from the U.S. to the continent is a credit to Africa itself, which is increasingly viewed as a favored destination for global investors, multilaterals and export credit agencies,” says Jude Kearney, President of Kearney Africa and former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce during the Clinton Administration. “Africa continues to command a healthy share of global FDI in oil and gas industries. It has for decades shown that investment in those sectors is favorable compared to other jurisdictions and can be successful by many measures. Even as Africa and the rest of the world wrestles with a global pandemic, Africa’s energy sector shows vitality and resiliency – not only in hydrocarbons but in regard to new opportunities in mining, liquefied natural gas, and agriculture.”
Both African governments and private sector sponsors of African energy projects value highly the combination of investment and partnership that US investors famously convey. The USAEF seeks to enable successful partnerships between its participants such that the energy development goals of U.S. investors and strategic partners and their African counterparts can be achieved.
To find out more on opportunities for U.S.-African energy investment and cooperation, as well as information on the inaugural U.S. Africa Energy Forum, please visit www.AfricaOilAndPower.com and to participate in the USAEF, reach out directly to Senior Director James Chester at firstname.lastname@example.org.
*SOURCE Africa Oil & Power Conference
African Energy Thriller Becomes a Wall Street Journal Best-Seller List and Tops US Market
April 6, 2021 | 0 Comments
|Billions At Play became number one on Amazon in several categories only a few days after its initial release in 2019|
Following the widely acclaimed release of NJ Ayuk, Managing Director of Centurion Law Group and Executive Chairman of the African Energy Chamber’s second book, Billions At Play: The Future of African Energy and Making Deals, the resourceful and bold book has become #1 Amazon Best Selling eBook overall, #2 Wall Street Journal Best Selling eBook, #4 USA Today Non-Fiction Business Best Selling eBook and #10 Wall Street Journal Non-Fiction Combined best seller.
Billions At Play became number one on Amazon in several categories only a few days after its initial release in 2019, making it one of Africa’s energy best-seller. This second edition, which opens once again on a foreword by H.E. Mohamed Sanusi Barkindo, Secretary General of the Organisation of Petroleum Exporting Countries (OPEC) and features a new chapter dedicated to the impact of the COVID-19 pandemic on African oil markets, which is narrated by Adera Gandy and Boet Schouwinck.
In a strong indication of Ayuk’s popularity around the world, Billions At Play: The Future of African Energy and Making Deals sold 7,020 units with peak sales of 2,803 units in a single day. ‘’This is great news because we can still tell Africa’s complex energy story with a hopeful narrative and still be a bestseller in the US. We don’t have to be negative or continue the crab in a barrel mindset that has not helped us. Any achievement is meaningless without thanking all the hands and hearts who helped us get there. I thank you a lot and continue to express my thoughts and experiences the best way I know how,’’ NJ Ayuk said.
The Amazon bestseller outlines the continents road to recovery plan that seeks to dissect the need for energy policy legislation, the lack of access to power, the role that access to reliable, sustainable, and affordable power can play in the acceleration of economic growth and most importantly, why the continent’s energy industry needs more women.
The book is currently available through leading retailers including Exclusivebooks.com , TakeAlot.com , Google Books , eBooks.com , Kindle and many more!
NJ Ayuk is a leading energy lawyer and a strong advocate for African entrepreneurs. He is recognised as one of the foremost figures in African business today.
A Global Shaper with the World Economic Forum, one of Forbes’ Top 10 Most Influential Men in Africa in 2015, and a well-known dealmaker in the petroleum and power sectors, NJ is dedicating his career to helping entrepreneurs find success and to building the careers of young African lawyers.
As founder and CEO of Centurion Law Group, NJ strives through his work to ensure that business, and especially oil and gas, impacts African societies in a positive way and drives local content development. He is the current chairman of the African Energy Chamber and author of ‘Big Barrels: African Oil and Gas and the Quest for Prosperity’.
*SOURCE African Energy Chamber
API and African Energy Chamber Sign First MOU to Expand Natural Gas and Oil Industry Standards and Initiatives
March 31, 2021 | 0 Comments
The American Petroleum Institute (API) and the African Energy Chamber (AEC) have signed a Memorandum of Understanding (MOU) to collaborate on capacity building initiatives and standardization to enhance safety, environmental protection, and sustainability in African countries producing natural gas and oil.
“API is pleased to collaborate with the AEC to expand use of our world-class standards and programs to help enhance the safety, transparency and sustainability of natural gas and oil operations across the African continent,” API Segment Standards and Services Vice President Alexa Burr said. “This is our first partnership with an African based organization, and we look forward to supporting AEC’s efforts to drive industry-wide technical knowledge.”
The number of petroleum producing countries in Africa has increased substantially, coinciding with a movement across the continent to enact robust, equitable and imminently more transparent policies. This continent-wide pursuit to increase the technical capacity of local organizations is of paramount importance in these natural gas and oil economies. It will be vital for public and private representatives of African host economies to work with the international petroleum industry and help ensure the developmental needs of the local markets are met while maintaining policies that allow for oil sector investment in these economies and accelerating the adoption of industry practices that enhance safety and environmental protection.
The MOU will facilitate collaboration between API and AEC members in several areas, including:
- Development of training programs and seminars
- Coordination, collaboration and sharing of the natural gas and oil industry’s good practices for environmental, health, safety, security and sustainability
- Organization of joint forums, conferences, roundtables, workshops, about energy issues and the continued multifaceted uses of natural gas and in the world’s energy future
“Our association with API is a milestone for the work we do, and we are confident we will see American ingenuity – a key component of the partnership between African producing nations and IOCs – at its best,” US-Africa committee Chair of the AEC Jude Kearney said. “America has a tried, true and tested tradition of developing and deploying best-in-class standards, and industrial ingenuity to safely develop natural resources in America and around the globe. We also have a proud history of partnering with the earliest oil producing countries in Africa to create stable petroleum sectors and sustained economic contributions. Our goal is to work with the API to further support African nations and businesses to build technical capacity, harmonize standards and attract investment to help Africans monetize their resources and combat energy poverty while growing their economies while prioritizing safety and the environment.”
Given the economic and transformative potential which Africa’s natural gas and oil industry holds – including the focus on human capital growth, supply chain development and local and international partnerships for talent and infrastructure development – the AEC is determined to place this collaboration at the forefront of its mission.
API represents all segments of America’s natural gas and oil industry, which supports more than ten million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency, and sustainability.
Urgent International support needed to support the Government of Mozambique to Combat Terror in Cabo Delgado
March 27, 2021 | 0 Comments
By NJ Ayuk*
The terror attacks on Palma are not simply targets of opportunity. They are strategic targets. The goal is to destroy Mozambique’s government’s ability to produce, export gas, fight poverty, create jobs and to make it clear that the government cannot protect oil company personnel or assets.
This is terrorism and must be condemned in all forms. These terrorist attacks if not taken seriously will cost the Mozambican government billions of dollars in lost investment and LNG earnings.
The African Energy Chamber is encouraged by the response of the President Nyusi and the Mozambique government. We continue to closely monitor the situation in close co-ordination with authorities in Mozambique and the energy companies.
“The international community is slowly realizing that the issue of terrorism is not only a Mozambique problem but a global problem. A swift and coordinated global response is needed to confront these band of terrorist, whose only goal is to inflict pain and poverty into a population that is already in distress” stated NJ Ayuk, Executive Chairman of the African Energy Chamber.
“President Nyusi and Mozambique should not be left to solve this alone. The International community must support President Nyusi with the needed assistance to secure peace and stability. After that the President can also start the process of rebuilding what has become quite a fractured population in Cabo Delgado.” conclude Ayuk
The tangible improvements to the security environment in Cabo Delgado have enabled energy companies to resume activities. The resumption is very positive, and credit must be given to the government and the energy companies who see their work as contributing to the growth of Mozambique. Investments of billions of dollars have already been made, but an escalation of violence is putting the future of these investments at risk.
We also note that the interruption will result in minor delays in development schedule of key projects however, we are confident that the operators can minimize those and continue a rapid ramp-up of the projects.
There will be peace in Mozambique. It is not impossible. The Mozambican people are resilient and understand what is at stake. It will take time, diligence and discipline on the part of the government, and buy-in by the oil companies. The Mozambican economy will benefit from LNG earnings and more exploration.
*Executive Chairman of the African Energy Chamber
Russia-Africa Energy Committee to drive investment and deal-making in the energy sector
March 24, 2021 | 0 Comments
|Russia can play a great role in financing energy projects and gas development in Mozambique, Senegal, Tanzania, Nigeria and other countries|
The inter-party online conference drew attention to the developments of Africa’s energy market, navigating relations on the continent for Russia-Africa partnerships and highlighting the announcement of the creation of the Russia-Africa Energy Committee aimed at developing clean power and strategic framework towards the continent’s energy crisis.
While the agenda for the United Russia Party is aimed at growing Russian presence on the continent, Presidents and delegates across Africa were able to address their countries economic challenges, technological advances, and declare a call for vaccines to be produced in Africa and distributed to the frontline workers in healthcare and energy workers working offshore, onshore and on public utilities.
“Attention needs to be focused on moving away from MOU’s with African companies to closing deals. Russia can play a great role in financing energy projects and gas development in Mozambique, Senegal, Tanzania, Nigeria and other countries. Russian companies working on training and building logistics infrastructure can be a path to building a strong local content framework that drives our energy sector” said NJ Ayuk, Executive Chairman of the African Energy Chamber.
Russia continues to be a powerful player in the global energy market as it raised concerns on how Russia-Africa relations can create strong relationships to support an enabling environment, together with Africa’s role in implementing innovative smart power solutions for a post-COVID-19 world and ensuring a sustainable and diversified energy mix.
“We will be setting up a special Russia-Africa Energy Committee with our advisory board to focus on developing energy projects and closing deals. Many young people in Russia and Africa want results and not talk. We need to look at the mirror of the Russian-Africa relationship. We need to not only reflect what we see but correct what we see,” concluded Ayuk.
Across Africa, new systems and networks can be designed around future environmental stressors and energy demands without considering the limitations of old infrastructure. With advanced use of mobile technology in Africa and the lack of existing electricity transmission networks, these developments allow communities in Africa to gain access to power by leapfrogging the traditional model of centralized generation and transmission of power.
*SOURCE African Energy Chamber
Brazil Africa Institute Takes On Renewable Energy In Upcoming Seminar
March 22, 2021 | 0 Comments
By Ajong Mbapndah L
On March 30, the Brazil Africa Institute (IBRAF) will hold a seminar on renewable energy in Africa with the goal of promoting in-depth discussions on the main trends in the energy sector, sustainable economic development and climate change, in response to the challenges brought about by the Covid-19 pandemic
“We chose renewable energy for two reasons: first, to reinforce the agenda of sustainable development, which has been the object of disinformation, and is key for us to avoid a climate crisis in the next few decade; second, to show that the Global South, despite its developmental struggles with poverty, unemployment and inequality, can’t and won’t neglect the green economy as the sole alternative for the future,” says Prof João Bosco Monte ,President of the Brazil African Institute .
In an interview with PAV, Prof Monte says the event is an opportunity for Brazil and Africa to share successful projects, encourage smart investments, and discuss inclusive policies in the energy sector.
Prof Monte, thanks granting this interview, could we start with an update on how the Brazil Africa Institute has readjusted its schedule to cope with the COVID 19 pandemic?
This pandemic is affecting every country in the world. Right now, we are trying to do everything we can to keep everyone safe while adopting the model of remote work. As an international organization, it is not easy to be distant from other parts of the world. But with all the new technologies we are finding ways to shorten distances. We turned the Brazil Africa Forum 2020 into a 100% online edition. The Seminar Renewable Energy and Africa is going in the same direction.
IBRAF will be hosting a seminar on Renewable Energy in Brazil and Africa, why the focus on energy at this time? How relevant do you see renewable energy as an instrument of economic development for both Brazil and Africa?
IBRAF’s mandate is to find areas in which Brazil and Africa can exchange good practices and solutions. Infrastructure, and the several areas that revolve around it, are key in this sense. We chose renewable energy for two reasons: first, to reinforce the agenda of sustainable development, which has been the object of disinformation, and is key for us to avoid a climate crisis in the next few decade; second, to show that the Global South, despite its developmental struggles with poverty, unemployment and inequality, can’t and won’t neglect the green economy as the sole alternative for the future. Renewables are essential for Brazilian and African development: we have the single strongest renewable matrix in the world, and Africans have the one with the greatest potential.
Currently what is the situation like with regards to renewable energy in Brazil today and what could your country offer Africa catch up renewable energy?
Brazil currently has a relevant percentage of its energy matrix based on renewable sources and 83% of our electricity is derived from hydroelectric plants, bioenergy, solar panels, wind turbines, and geothermal stations. In general, the interest of the Brazilian public and private sector with Africa needs to be stimulated. The country used to be a leader in South-South Cooperation and we need to engage in it again. The transfer of knowledge and technology is an important field of cooperation.
African still needs to overcome the challenges of social inequality, since a considerable portion of its population does not have access to energy of any kind. On the other hand, renewable energies are a reality in many countries and investments have been increasing. The event is an opportunity for both sides to share successful projects, encourage smart investments, and discuss inclusive policies in the energy sector.
May we know some of the key personalities or professionals who will animate or lead discussions at the seminar?
Sure! We are going to have so many important names dialoguing on our event. Damilola Ogubiyi, the CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All is going to be joining us. We’re also going to have NJ Ayuk, Founder and President of the Centurion Law Group and Executive Chairman of the African Energy Chamber; Rentia Van Tonder Head of Power, Client Coverage, Corporate and Investment Banking at Standard Bank; Patrick Dlamini, CEO and Managing Director at the Development Bank of Southern Africa (DBSA); Alessandro Amadio, Head of Mission for UNIDO in Brazil and Venezuela; and many other. The list is on our website.
One of the core projects of IBRAF is its Fellowship Program on South-South and Triangular Cooperation (IFP), how is that going and is it serving the purpose for which it was created?
The IFP is up and running since February, and will extend until late 2021. We are engaging with researchers from 9 different countries – Brazil, Argentina, Mozambique, Nigeria, Egypt, Uganda, Zimbabwe, Burkina Faso and South Africa —, giving them the opportunity to research themes that can further approximate the Global South, like agriculture, trade, investments, technology and public health. The project has been very successful in serving the purpose for which it was crafted, as it gives both IBRAF and our research fellows the tools to build bridges between professionals and organizations in the two sides of the South Atlantic. Our research fellows are having a very practical and realistic experience of how SSTC works: they dive deep into a research theme, speak with leaders and specialists from their fields, and build a solid research project that can give insights on policy-making focused on the needs of the Global South. This gives IBRAF an opportunity as well, to start dialogues and work with a vast network that is also interested in finding solutions for LDCs.
Any plans yet for the 2021 Brazil-Africa forum and what else is on the calendar at IBRAF for the rest of the year ?
Yes, the Brazil Africa Forum 2021 is just around the corner. We will announce the dates and theme of our flagship event very shortly, and we are hoping to have an even greater debate than the ones we had in 2020. The world is still facing the COVID-19 crisis, so the format of the event is yet undecided. Still, as long as we have strong and encouraging voices with us, as we are sure we will do, the form is merely a detail. There is much more in IBRAF’s pipeline for 2021: we will have more seminars as the one we are currently promoting, but focusing on other strategic themes that can be used as leverage for Brazil-Africa approximation. We are promoting new ways to engage in capacity-building, through our Online Professional Learning (OPL) project, exchanging Brazilian solutions with African learners. IBRAF will also strengthen its presence in the research front, producing more high-quality research on policies, markets and social development, and will create new channels to dialogue with the general public via the creation of content. The year has just begun, and despite a sad scenario worldwide, we remain optimistic.
For those who read this interview and are interested in the seminar on Renewable Energy in Brazil and Africa, what is needed from them to be part of the event?
The event is taking place on March 30th. Registrations are free of any charges. To join us, all you need to do is go to the registration page on the event’s website (https://ibraf.org/projects/renewable-energy-seminar/registrations/) and fill out a very simple form. And that’s it. We want everyone to engage with us and share their thoughts.
NJ Ayuk On Making The Most Of Africa’s Energy Potential
March 20, 2021 | 0 Comments
By Ajong Mbapndah L
As many were wailing in disbelieve at the impact of COVID-19 on African economies, NJ Ayuk was one of those who rolled up his sleeves, put on his thinking cap and took the lead in proffering solutions and charting the way forward.
From robust engagement with OPEC, to a multitude of webinars to key stakeholders, helping governments navigate complex situations and building bridges with partners in Africa and the world, NJ Ayuk, Executive Chairman of the African Energy Chamber spared no efforts in the quest for solutions to sustain and keep the African energy sector ticking.
“Africa’s voice must therefore be heard loud and strong as part of the global energy discourse. The Chamber has identified this and therefore has as one of its objectives to federate the different aspirations of Africans in the energy sector and articulate this in a constructive manner that will foster investment in the African energy sector, says NJ Ayuk in an interview with PAV magazine.
Bullish on the way forward, Ayuk believes that Africa must make the most of its energy potential and this starts with getting activity levels across the entire energy value chain in Africa back to pre-COVID-19 levels, says Ayuk. In a show of its seriousness on the way forward, the African Energy Chamber recently published its road to recovery book which provides practical guidance on how African countries can enhance compactivity globally to attract investment.
“The energy sector’s challenges, and the trials and tribulations have made the African Energy Chamber’s work more important now, more than ever. We are committed to helping Africa’s energy sector stakeholders navigate a complex and ever-changing global energy landscape. We will continue our mission to support the dynamic private sector and unlock the continent’s remarkable energy potential,” says Ayuk.
After a tough year, what do African countries need to do to get the energy sector back on the rails so it can continue playing its role in the economic development of the continent?
In order to change the tide and spur a post covid recovery in the energy sector that will also enhance overall economic growth in Africa, African countries must double their efforts to attract investment into their energy sectors. They must put in place timely and market relevant strategies to deal with external headwinds like the drive to decarbonize globally and evolving demand patterns for energy internally and hydrocarbons globally. They must end restrictive fiscal regimes, inefficient and carbon-intensive production, cut bureaucracy and other difficulties in doing business which are preventing the industry from reaching its full potential.
2020 was a year of unprecedented challenges for Africa’s energy sector. The target must be to get activity levels across the entire energy value chain in Africa back to pre Covid-19 levels and beyond. Companies in the oil and gas sub-sector for example responded by cutting costs and delaying projects, with planned capital expenditure for 2020-2021 dropping from $90 billion pre-COVID-19, to $60 billion.
As a leading actor in the Energy sector, may we get your assessment on the response from key power players in the continent like Nigeria, Equatorial Guinea, Angola, and others, what are they getting right and what are there missing or needs to be improved upon?
The response on the continent has been a mixed bag. A number of African countries were slow in responding to market realities, largely due to bureaucracy and the absence of generally agreed principles on how to deal with the COVID -19 pandemic. Others on the other hand, especially countries with a notable dependence on their oil and gas sectors responded swiftly to minimize disruptions in their countries.
For example, OPEC member Equatorial Guinea moved swiftly in the early months of the pandemic to implement best practice protocols that enabled the industry to operate uninterrupted during the pandemic. The government also suspended and deferred several fees usually borne by companies in the sector, in an attempt to support a reduction of costs in the sector. The result of these measures was that production in EG were kept at the levels projected prior to the pandemic and the sector did not witness mass retrenchment as was the case in several other oil producing countries.
Angola responded in a similar manner, after consulting with major stakeholders in the industry. Special health and safety protocols were adopted for the industry that allowed for undisrupted activity in the oil and gas sector. The government has also been able to maintain the momentum in its ongoing bid-round by facilitating access to seismic data and passing additional legislation that will facilitate exploration and drilling activity. Despite the associated economic crisis, the government has held on to its strategic power infrastructure projects like the completion of the Lauca dam and associated transition infrastructure which will boost power supply in the country significantly. The chamber believes that this project is key to enable the development of industry and the mass creation of jobs in Angola.
In Nigeria, there is a realization, across political lines, that the long-awaited Petroleum Industry Bill must be passed in order to give clarity and predictability to the industry, both key components that drive investment. The bill was therefore tabled in parliament and it is likely, that it shall be passed and enacted in law in the 3rd quarter of this year. Furthermore, the Nigerian government in response to the growing importance of Gas globally and also for power generation internally is investing significantly to enable gas to power infrastructure in-country. This is a good development for Nigeria and Africa, as we seek to reduce the number of those without access to affordable and reliable power and to promote industry that will provide jobs for Africa’s youthful population.
The energy sector’s challenges, and the trials and tribulations have made the African Energy Chamber’s work more important now, more than ever. We are committed to helping Africa’s energy sector stakeholders navigate a complex and ever-changing global energy landscape. We will continue our mission to support the dynamic private sector and unlock the continent’s remarkable energy potential.
What role has the African Energy Chamber played and/or what initiatives have been taken to help the continental wide response and recovery efforts?
The African Energy Chamber is at the forefront of Africa’s response to COVID-19, and the associated economic crisis. The Chamber is the voice of the African energy sector and is leading the industry’s response in a number of ways;
- Together with OPEC and other stakeholders, the Chamber is working on an initiative to combat energy poverty in Africa, which is increasing even faster in a post covid era.
- The Chamber together other partners like the International Association of Geophysical Contractors – IAGC championed the streamlining of permits for the obtention of seismic data in several African countries.
- The Chamber emitted several guidelines (AEC Common Sense Agenda) after consultations with industry stakeholders on how best to ensure continuity in the energy sector and increase investment post-COVID-19
- The AEC is a trusted advisor to key stakeholders in the industry. We engaged with several governments and advised them on ways to increase quality local participation in their energy sectors, in a manner that ensures global competitivity in a post COVID-19 environment.
- The Chamber launched a jobs portal to take opportunities to young Africans
As things stand now, and with everything that has taken place, how much of a factor or key player is Africa in shaping global decisions in the energy sector, how strong is the African voice in articulating and defending its interests?
According to The Africa Energy Chambers 2021 outlook, Africa consumes just over 710 terawatt-hours (TWh) presently. This is expected to triple in the next 3 decades. This represents just 6% of global consumption, and 7% of global production, despite Africa having 17% of the world’s total population. Africa also holds over 7% of total proven global oil and gas reserves. However, the continent is significantly underexplored. Recent discovery trends indicate that the continent is well placed to become a key global supplier of LNG, with major recent discoveries in Mozambique, Nigeria, Tanzania and Senegal/Mauritania.
Africa’s voice must therefore be heard loud and strong as part of the global energy discourse. The Chamber has identified this and therefore has as one of its objectives to federate the different aspirations of Africans in the energy sector and articulate this in a constructive manner that will foster investment in the African energy sector.
African stakeholders must federate around initiatives like those of the chamber in order to have the stance taken into account. `individual countries are unlikely to have an impact.
Under your leadership, the African Energy Chamber has sort to broaden its reach in Africa, with representations in Central and West Africa, how is this expansion shaping or moving the agenda of the Chamber forward?
The Chamber and our regional Presidents have done an amazing job with creating awareness about the Chamber and our work in their respective regions and beyond. Our footprints in Angola, East Africa, Mozambique, and Central Africa and their success allow us to keep abreast with the issues facing the energy industry in these regions and find solutions that work in these regions. The chamber will continue to grow regionally as we seek closer cooperation with the energy industry and stakeholders in-country. It is imperative, that the aspirations of every African and other stakeholders in each African country are reflected in what we do at the chamber. I want to take this opportunity to thank the regional teams for all what they do.
In an op-ed last year, you said now will be a good time for American independent oil and gas producers to consider opportunities in Africa, may we know what Africa stands to gain from more US presence?
I lived, studied and worked in the United States at the start of my career and one thing that has always stood out to me was this: The American sense of optimism and ingenuity that drives American entrepreneurship. In that same light, I think the ingenuity of American oil independents will lead to a win-win situation for both the companies and African countries in which they might operate. Africa’s energy sector needs that spirit of entrepreneurship which has led to the creation of tremendous wealth in America. Many of Nigeria’s major oil discoveries were made by such companies. In Senegal, AFRICA FORTESA Corporation, headed by US Upstream veteran Roger Beall is already producing and supplying gas to the domestic market. This is a trend that is expected to define the development and industrialization of Africa in the coming decades. Mr Beall founded Fortesa in 1997 and employs over 200 employees in his onshore E&P project in Senegal. Fortesa is exactly the kind of US company that we seek to attract to Africa. Not only do such companies create good paying jobs for young Africans, but they also provide training, tax revenue and most importantly demonstrate the kind of entrepreneurship that Africans must emulate in order to develop their continent.
The African Energy Chamber recently appointed a US-Africa Committee to serve in its advisory board, how would the committee help in growing and strengthening cooperation and investment between the US and Africa in the energy sector?
The African Energy Chamber appointed the US-Africa Committee to serve on its Advisory Board as a means to support the development of stronger energy cooperation and investment between the United States and Africa. Across the entire energy value chain, the committee aims to facilitate US investment into Africa’s energy sector and provide a platform for continuous dialogue between US energy stakeholders and their counterparts in Africa. America has long viewed African energy resources, especially oil and gas as key to its strategic interests. Africa has also cherished this relationship, though perspectives have changed over time due to the changing dynamics of each stakeholders’ economies and global demand patterns. The chamber sees the US as a key partner; and with the support of incredibly talented and experienced board members on that committee, commits to ensuring that frequent exchanges between US and African stakeholders lead to more investments in Africa. The committee is chaired by KearneyAfrica Legal Advisors President and former Deputy Assistant Secretary at the US Department of Commerce, Mr Jude Kearney.
To unlock future growth potential in the US-African energy cooperation, we will need to open up to SMEs and entrepreneurs and not be limited only to large and traditional corporations. The need to encourage African investments into the US was also brought to the table as a way to further support a win-win relationship that would support further capital flows going both ways.
What is your take on the issue of vaccines for COVID 19 and do you this has a role to play in the recovery that you envisaged?
I believe vaccines are the only solution for the world to return to some form of normality, similar to pre-covid -19 times. The pandemic has been devastating to the world economy overall and even more so to Africa in particular. Ending the pandemic rests on the successful delivery of COVID-19 vaccines to every country but the challenge goes beyond just having vaccines available. There is also significant convincing to be done for populations in Africa and globally to have confidence in the vaccine. Our assessment at the chamber, is that most of the developed world will have opened up their economies fully in the fourth quarter of 2021 in response to the majority of their populations having been vaccinated. Unfortunately, vaccination is likely to be slower in Africa mainly due to lack of access to vaccines. However, a rebound in economic growth in developed nations and china will spur activity in the sector in Africa.
We end with a last word from you on the way forward for Africa as the continent grapples with COVID-19, what gives you hope and what are you are your fears?
Africa’s oil and gas industry is facing extraordinary circumstances. An ongoing energy transition and new efforts to decarbonize the world are weighing on oil demand. The shale revolution exacerbated these pressures. And of course, the COVID-19 pandemic has wrought havoc on markets around the world, accelerating and intensifying existing trends. External headwinds are forcing African petroleum producers and the entire African energy sector to re-examine their strategies. Conventional petroleum resources here must be globally competitive, if the industry is to compete and survive when compared to new frontiers like Guyana and Suriname. Growth has lagged because of conditions above the ground and not below. Restrictive fiscal regimes, inefficient and carbon-intensive production, and difficulties in doing business are preventing the industry from reaching its full potential. These conditions need to improve, if Africa’s energy industry is to remain competitive and thrive.
Africa’s young generation gives me hope. Studies show that the younger generation is more likely to hold their leaders accountable, a key component to demand and drive change that will propel development.
Energy industry outlines aggressive African recovery in new book
March 17, 2021 | 0 Comments
The book details recommendations, case studies, and solutions for how the industry can reshape itself to enable a post-COVID-19 comeback.
The African Energy Chamber officially launches its book titled, ‘African Energy Road to Recovery: How The African Energy Industry Can Reshape Itself For A Post COVID-19 Comeback’; The book details recommendations, case studies, and solutions for how the industry can reshape itself to enable a post-COVID-19 comeback.
Africa’s oil and gas industry is facing extraordinary circumstances. An ongoing energy transition and new efforts to decarbonize the world are weighing on oil demand. The shale revolution is exacerbating these pressures. And of course, the Covid-19 pandemic has wrought havoc on markets around the world, accelerating and intensifying existing trends.
The African Energy Chamber hosted its virtual book launch for its first book titled ”African Energy Road to Recovery: How the African energy sector can reshape itself for a post-COVID-19 comeback” alongside its advisory board members, moderated by Verner Ayukegba, SVP at the African Energy Chamber on March, 16th at 4PM SAST.
The advisory board members, who lead the narrative within the book, provided insight into what the book has to offer and presented their own opinions and solutions to the sector’s recovery. “The book is an amazing thought process and is highly recommended to everyone as it gives important insight into the value chain. The opportunity for African independents is the prolific, hydrocarbon- rich basins within the continent. A credible plan for execution, supported by a strong management team, will always attract capital,” stated Kola Karim, CEO of Shoreline Natural Resources.
The book provides an in-depth look at the current African energy landscape through the provision of resources including maps and graphs, detailed analysis of risks and opportunities, and key insights from industry giants that provide a framework not only for moving forward in a post-COVID-19 context, but excelling. Through the presentation of interviews with industry experts and informative articles that seek to examine the entire energy value chain, the book is particularly critical in understanding the current context and catapulting Africa’s energy industry to success.
“There are some great discussion points in the book which seek to outline skills training and local content. NOC’s are working daily with international operators and having projects to foster the local content is really the right way to build skills and transfer knowledge,” stated Remi Mouchel, Director of Operations and Chairman of the Executive Board, IFP Training. “Everyone should take the time to buy this book,” stated Akinwole Omoboriowo II, Chairman, CEO of Genesis Energy Group. “The book is power packed with a lot of information and case studies. The beauty of energy transition is that it has been a deliberate policy for most African countries pre-Covid-19. The notion around producing power around technology has been very significant and as a result, reshaped Africa’s comeback post Covid.’’
“The book is power packed with a lot of information and case studies”
With the abundance of sizeable discoveries, emerging large-scale projects, and Africa’s exponential range of opportunities for investment and growth across the continent, the book provides information and recommendations critical for the continent in moving forward post-COVID-19. The book is based on the advice and knowledge of the AEC’s advisory board, a group of industry executives and experts that offer the best solutions to Africa’s industry, and is critical for every current and potential stakeholder.
“You need to create a good system upfront that addresses the physical, cyber and technological components of assets and addresses those issues in a way that maintains operational resiliency,” stated C. Derek Campbell, CEO of Energy & Natural Resources, Inc. “The book does a good job of explaining technology and operational technology environment that comes together with African operators that need to look at how they operate in this industry 4.0 environment.”
“I am encouraging people who have not bought their copies to do so. As we look into the future, post Covid-19, we are going to see this continued infusion, conversions of the operational technology world which is where the oil and gas industry has deep experience.,” stated Jovita Nsoh, Regional CTO Strategy & Innovation, Microsoft. “I think South Africa is ready,” stated Nosizwe Macamo, Executive Chairman & Founder of Raise Africa Investments. “In the book, there is a whole section which talks about regulatory certainty. In South Africa, we are finally at a point where we have a bill that deals directly with what the upstream should look like. When I look at the mature oil producing countries, like Nigeria, there is so much African countries can actually learn from each other.’’
The Road to Recovery addresses these challenges head-on, detailing all of the major challenges facing African oil and gas stakeholders, as well as workable solutions that will keep the industry on a strong and stable growth path. Again and again, our oil and gas sector has proven its resilience and adaptability. The world still needs oil and gas, and Africa still holds enormous untapped potential. The African Energy Chamber will remain a committed partner of choice for the industry as we advance into an uncertain future.
The digital copy is currently available on Barnes and Noble: bit.ly/38RBoDT and pre-orders on the following major platforms:
Amazon – amzn.to/30PcSib
Google Play – bit.ly/30OhEN8
Barnes and Nobles – bit.ly/2P2UMqB
The African Energy Chamber’s Road to Recovery: How the African energy industry can reshape itself for a post-COVID comeback offers a commonsense strategy for the public and the private sector from leading industry experts
March 17, 2021 | 0 Comments
By NJ Ayuk*
African Energy producers and the governments are facing an unprecedented economic crisis due to the Coronavirus, unemployment, recession, and energy poverty and energy transition concerns.
The African Energy Chamber’s Road to Recovery: How the African energy industry can reshape itself for a post-COVID comeback offers a commonsense strategy for the public and the private sector from leading industry experts.
It calls on all of us to take bold actions when it comes to job creation and opportunities that get people back to work, build infrastructure, capitalize on AFCTA and diversify our economies.
We understand that we have an obligation as an energy sector to build and support African economies that attract investment and position our continent, its people and investors for prosperity.
It’s a plan for today that provides hope for the future. Register for the virtual book launch here: bit.ly/38FfWlo
After spending a week in Mozambique, I came to believe more in this mission and what we can do to create opportunities especially for young people. We must never waiver on our commitment to work with international partners to bolster energy security and independence matters.
Let’s face it, creating an environment that attracts investment and job creators is key to getting Africans back to work in the well-paying jobs our energy sector offers.
I love this book and commonsense strategy because it calls on all of us to stand up for something bigger than our own personal interest. We must not be ashamed of our energy sector and the working men and women are good people and we must stand up for them and the investors. African countries must understand that to reinvigorate our energy sector and economy, we must all do a lot more when it comes to investment in infrastructure; job creation; and diversification. We must move beyond words.
Our continent needs to be competitive in the global marketplace because every continent is doing everything to attract the same investment opportunities and capital. We in Africa must stand out from the other continents – so investors will choose the African energy sector as the best place to invest.
We must also be proud of the work we have done so far and in countries like Senegal, Mozambique, Ghana and others have a good foundation, but they must build upon it and grow. The Chambers work is to work with businesses and help governments to build on our existing strengths to make African countries as one of the most desirable places to live for our young people by creating a good quality of life with our vast natural resources. We can build an entrepreneurial culture that calls on young people to be go getters rather than wait for some government bureaucrat or foreign aid worker for a handout. But we must also challenge and push governments on creating a business-friendly environment and improving a culture of good governance.
*NJ Ayuk is Executive Chairman of the African Energy Chamber.
African Energy Chamber’s new book outlines the importance of structuring deals that benefit local economies
March 12, 2021 | 0 Comments
16 March 2021 at 4PM SAST the African Energy Chamber will be joined by some of its advisory board member for the launch of its latest publication.
JOHANNESBURG, South Africa, March 12, 2021/ — The African Energy Chamber will be hosting a virtual launch for its first-ever advisory board publication African Energy Road to Recovery: How the African energy industry can reshape itself for a post-COVID-19 comeback ; The public event will take place on 16 March 2021, 4PM SAST; Register here to attend ;The event will feature the participation of advisory board members Kola Karim, CEO of Shoreline Natural Resources; C. Derek Campbell, CEO of Energy & Natural Resource Security, Inc; Jovita Nsoh, Principal Program Manager at Microsoft and Akinwole Omoboriowo II, Chairman and CEO of Genesis Energy Group; Nosizwe Nokwe-Macamo, Executive Chairman and Founder of Raise Africa Investments and Rémi Mouchel, Operations Director and Executive Board President of IFP Training; Book a media interview by emailing email@example.com.
16 March 2021 at 4PM SAST the African Energy Chamber (Chamber) will be joined by some of its advisory board member for the launch of its latest publication, African Energy Road to Recovery: How the African energy industry can reshape itself for a post-COVID-19 comeback .
The open to public one-hour session will discuss key topics explored in the book and allow a Q&A session to all media. All media are also invited to contact firstname.lastname@example.org to book interviews with the Chamber and some of its advisory board members.
The launch event will be moderated by Verner Ayukegba, Senior Vice President at the African Energy Chamber and feature the participation of Kola Karim, CEO of Shoreline Natural Resources; C. Derek Campbell, CEO of Energy & Natural Resource Security, Inc; Jovita Nsoh, Principal Program Manager at Microsoft and Akinwole Omoboriowo II, Chairman and CEO of Genesis Energy Group; Nosizwe Nokwe-Macamo, Executive Chairman and Founder of Raise Africa Investments and Rémi Mouchel, Operations Director and Executive Board President of IFP Training.
As global energy investment reaches record lows, the ability of sub- Saharan Africa to finance large scale infrastructure projects depends on the successful implementation of transformative trade, investment and governmental reforms.
The impact of COVID-19 on energy investment flows cannot be understated. At the onset of 2020, global investment in the energy sector was anticipated to increase by two percent – the largest increase in six years – and instead, is estimated to have dropped by 20% year-on-year, according to the International Energy Agency’s World Energy Investment 2020 report.
In the oil and gas industry alone, investment is estimated to have declined by one-third, while investment in shale contracted by 50%. If investment levels were to remain the same in 2021, oil output would drop by nine million barrels per day by 2025. Global investment in the power sector is estimated to have declined by 10%, coupled with a nine percent reduction in electricity network investment.
While renewable investment has been less affected by the pandemic – with the share of global expenditure in clean energy technologies increasing from approximately one-third to 40% – it is still significantly less than the level needed to facilitate the energy transition.
In the short-term, volatile demand, reduced cash flow, ongoing lockdowns and disrupted supply chains caused oil and gas companies to cancel or postpone new projects, with greenfield investment in Africa decreasing by 58% year-on-year in the first three months of 2020, according to the U.N. Conference on Trade and Development.
Large debt liabilities and shifting project economics threaten to hinder investment in the long-term, in conjunction with limited financing options for emerging markets. For its part, Africa represents the second-fastest growing region globally (after South Asia) – with an estimated annual growth rate of 3.9% between 2017 and 2022 before the pandemic, and associated opportunities in infrastructure, agriculture and energy. In the face of COVID-19, African governments are tasked with implementing transformational domestic reforms to spur foreign direct investment in a limited capital environment, with a view to growing local economies.
The African Energy Road To Recovery: How The African Energy Industry Can Reshape Itself For A Post COVID-19 Comeback book is currently available for pre-order across all major online retailers including Amazon , Barnes & Noble , iTunes, and Google Play.
African Energy Chamber’s Energy Transition Committee Advocates for a Unique Energy Mix for African Countries
February 13, 2021 | 0 Comments
|The Committee’s discussion unpacked the complex intertwined issues around energy production, access to energy, energy poverty and global equity|
The African Energy Chamber’s (www.EnergyChamber.org) Energy Transition Committee held its first meeting of the year, to discuss the pressing issues surrounding the global trend towards energy transition, from the viewpoint of African countries. The energy transition phenomenon has gained significant traction as a direct result of the coronavirus shutting down economies and growing concerns for the devastating effects of climate change. Countries and companies around the world are increasingly investing into renewable and low carbon projects, while simultaneously divesting and putting a stop to traditional fossil fuel projects. Some companies are even changing their names to reflect this trend: Total just recently launched its new name, Total Energies; Statoil has become Equinor; Savannah Petroleum has become Savannah Energy. What does this mean for the African continent, which emits just under 3% of the world’s carbon emissions and still has close to 700 million people without access to power?
The Committee’s discussion unpacked the complex intertwined issues around energy production, access to energy, energy poverty and global equity. As the African Energy Chamber, representing a wide range of stakeholders in the industry, it is imperative that we must continue to critique the rhetoric of energy transition and bring out a nuanced viewpoint on how this applies to the incredibly diverse African continent. For instance, should we agree to Africa’s transition mirroring that of more developed regions like North America and Western Europe? The premise implies that there is an existing embedded and established energy infrastructure in Africa, similar to Western Europe, from which the continent will transition from. The reality on the ground is that the average citizen across Africa lacks reliable, affordable, easily accessible energy to be able to pursue opportunities and live a dignified life. Therefore, we at the African Energy Chamber cannot embrace a one size fits all narrative, pushing the energy transition agenda where it is not in fact fit for purpose.
Akinwole Omoboriowo II, Chairman and CEO of Genesis Energy Holding, Board Member with the Chamber emphasised: “The African continent will continue to require a balanced energy mix to meet its needs. In the short-term, that’s to say the next 30 to 50 years – we must continue to industrialise on the continent. Gas will play a critical role in making that happen and renewable energy, where appropriate also has a role to play.”
Moreover, fellow Committee Member Rémi Mouchel, Director of Operations and Chairman of the Executive Board at IFP Training and Chamber Board Member went on to add: “Part of the energy transition for African countries will include looking at ways to apply technology to produce cleaner fossil fuel energy. We must extend the perimeter of this energy transition discourse.”
Indeed, while projects on the African continent represent a mere 6% of International Oil Companies’ global footprint, since the start of the pandemic, project after project has been delayed or cancelled, heralding a change in investment priorities. This has had devastating effects on hundreds of millions of Africans. From loss of jobs, to lost revenue for governments and the increase of dependency on imported energy. Millions of people living across Africa need reliable, affordable and easily accessible energy to be able build businesses. That much is not up for debate.
Climate change is real and must be addressed. The African Energy Chamber, with the support of its members and Advisory Board will continue to champion a sensible path towards energy transition in Africa. We believe, that the realities of the millions of Africans who rightfully aspire for affordable and reliable energy must be an integral part of the global energy transition discourse. We shall continue to strongly advocate for that, even when it goes against the grain. We must showcase the bold, innovative and enterprising projects that require funding, we must push for using Africa’s energy resources to bring about socio-economic development and prosperity for all.
*SOURCE African Energy Chamber
Miracles of Our Own Making: How CEMAC Countries Can Emerge Stronger from the Economic Crisis
February 9, 2021 | 0 Comments
By Leoncio Amada NZE*
When the International Monetary Fund (IMF) said that the pandemic-ravaged global economy shrunk by 4.4% in 2020, the news probably surprised no one. The world has not experienced an economic decline so dramatic since the Great Depression, and very few of us have escaped COVID-19’s financial tumult. Over the past 12 months, only China’s economy grew. Everywhere else, stock markets cratered, businesses shuttered, and unemployment rates climbed to new highs.
As vaccines have started their roll-out, however, signs of recovery, however tentative, are emerging. While this sounds a hopeful note, what the future looks like remains difficult to predict. Uncertainties abound, and how they play out will determine who’s right: the optimists, who believe that renewed spending and investment are just around the corner, or the pessimists, who fear a relapse in global consumption and even more pronounced economic slowdown are imminent.
In the initial phase of any recession, as well as in the exit phases, psychological components and the tension between optimism and pessimism play an important role. How we think things will evolve can influence what happens. Still, we can’t simply wish ourselves out of a pandemic or into economic health. In the world of money, miracles do not exist.
But the countries of the Central African Economic and Monetary Community (CEMAC) — Gabon, Cameroon, Republic of Congo, Equatorial Guinea, Central African Republic, and Chad — might be able to make our own miracles happen. The first step? Recovering our confidence through action. Historical trends show us that countries that adopt courageous and aggressive policies in the face of crises are better positioned in the medium- and long-term to emerge stronger than before. Through vigorous leadership, the implementation of difficult and even unpopular policies, and our own intrinsic spirit, we can begin climbing out of the abyss.
Lessons from History
Though the economic effect of the pandemic has drawn well-deserved parallels to that of the Great Depression, the two resulted from significantly different circumstances. The Depression was the culmination of progressive economic deterioration, not the result of a global lockdown event that brought spending to a grinding halt.
Yet by studying the Depression, we can learn something about how to craft a recovery. The political leadership of U.S. President Franklin D. Roosevelt is particularly instructive.
After World War I, the United States was considered the great world power, an indispensable actor in international trade, and a lender to other countries. This meant nations worldwide depended on the American economy to keep humming along. When it slowed, a global recession followed. And when the U.S. stock market crashed in 1929, it created a deep economic crisis replicated throughout the world.
The pain wasn’t easy to alleviate, but when Roosevelt took office in 1933, he moved quickly to try to repair the damage, at least in his own country. The interventionist measures known collectively as the New Deal included public spending to restore the financial system, regulate free enterprise, and develop job programs that would put millions of unemployed Americans to work. The government intervened in numerous sectors of the economy, including banking, foreign trade, insurance, and pension systems.
Little by little, Roosevelt’s public plan worked, economic indices improved, and private enterprise grew stronger again. The New Deal became the model for similar public spending programs in the UK, France, and Germany, all of them successful.
A Bold Plan
But what about now? The world is vastly different than it was in the 1930s, including being even more globalized. Can the same mechanisms that worked then be effective today?
If the 2020 example set by German Chancellor Angele Merkel is any indication, the answer is yes.
To mitigate the economic hit from COVID-19, the German government in June adopted a tax and spending stimulus package worth more than 1.3 trillion euros — an amount unmatched by Germany since World War II. That was on top of a €750bn rescue package agreed to just two months earlier. The new program included massive aid to companies and workers, particularly the self-employed and small businesses, as well as hundreds of billions of euros to support the German health system. The sweeping package included a financial rescue plan, as well, to keep struggling corporations from falling into the hands of foreign investors. The government also contemplated an aid fund of up to €600 bn through which Germany could buy shares in companies that were at risk of bankruptcy. The fund was proposed to benefit the tourism, business services, and transportation sectors simultaneously.
Contrasted with these historical and current examples, the way the CEMAC zone has confronted the economic impact of the pandemic is disheartening at best.
Rather than a coordinated effort to prop up companies, communities, and people, we’re seeing inaction on one hand and the continuation of counterproductive policies on the other. This includes the disastrous Foreign Exchange (FOREX) regulations imposed by the Bank of Central African States (BEAC), which impede foreign direct investment (FID), prevent the free flow of capital, and destroy the incipient local business fabric. Considering that the zone’s extraction sector depends heavily on international markets and is among the least economically integrated and diversified regions on the African continent, this seems counterintuitive, if not destructive.
To pull the CEMAC sub-region out of the economic morass, we need coherent economic coordination to make the area more attractive to FDI, not less. We have to remember that the market is an efficient resource allocation mechanism, and letting the market operate freely is like giving the zone a hand up.
Moving forward, the CEMAC countries must prioritize the following:
- Restructuring the financial system. Currently, credit is not reaching families and companies. The credit restriction and limited movement of financing flows are due both to the global financial situation and to the BEAC Forex issue. We should create and lower the price of monetary facilities and encourage financial institutions to restore credit flows to the private sector, establishing, if necessary, a private risk mechanism with a partial public guarantee to protect against default.
- Reforming labor markets. To stimulate job creation and promote a change in the production model, reforming the labor market is essential. Immediate actions can include:
- Modernizing employment contract negotiations as they relate to working conditions and productivity;
- Helping less-skilled workers avoid long periods of unemployment through customized training or insertion activities;
- Reducing taxes paid by companies and freelancers; and
- Promoting entrepreneurship by eliminating excessive regulation.
- Reforming the fiscal terms in the extractive industry. This will enable the sector to remain attractive to and competitive for FDI.
- Integrating and diversifying the economies of the sub-region.
- Empowering young people, men and women alike, to reach their maximum potential.
- Capitalizing on the opportunities and synergies from the African Continental Free Trade Agreement (AfCFTA). AfCFTA presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day. Implementing AfCTA will help integrate the economies of the CEMAC zone nations and open the region to continent-wide markets.
The Next Chapter
These recommendations are not a miraculous or magical formula for the CEMAC’s zone economic recovery in the post-COVID-19 era. Things won’t improve just because they hope we will. Instead, the road to economic recovery will be tedious. It will require sacrifices from all of us, along with the drive and determination of our economic and political leaders to make integrative, bold, and responsible policies. Together, we can reenergize the sub-regional private sector and write a new chapter in our collective history.
The Tax and Investment Desk of Centurion Plus Launches the African Continental Free Trade Area (AfCFTA) Impact Report
February 9, 2021 | 0 Comments
The AfCFTA Impact Report is a guide to what businesses need to know about the African Continental Free Trade Area.
The long-awaited African Continental Free Trade Area (AfCFTA) is finally operational, wherein trading commenced on the 1st of January 2021. This marks a celebrated milestone for intra-Africa trade. The AfCFTA eliminates tariffs on 90 per cent of goods produced on the continent, tackles non-tariff barriers to trade and guarantees the free movement of persons. It consolidates a market of 1.2 billion people and a combined Gross Domestic Product (GDP) of $2.5 trillion.
While the private sector in Africa has been grappling with dealing with the effects caused by the COVID-19 pandemic, the AfCFTA provides for key benefits such as open borders, improved contracts, and better structured value chains. The private sector being a key stakeholder and a major beneficiary of the AfCFTA has a lot that it can benefit from the AfCFTA.
The AfCFTA provides an opportunity for businesses to expand into African markets through the liberalization of markets and the progressive reduction of access barriers within the continent. In addition, businesses can take advantage and participate in supporting the diversification of African economies away from low-value-added products and commodities as well as in the development of regional value chains. The AfCFTA enhances competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.
Taking this into account, the Tax and Investment Desk of Centurion Plus launches the AfCFTA Impact Report, which will provide critical business impact assessment, especially for multinational companies and investors conducting business in Africa under AfCFTA protocols. This will be a bespoke report for each entity and will be powered by Centurion’s fully integrated resource base of country-qualified and internationally mobile professionals in all 54 countries in Africa.
The AfCFTA Impact Report is a guide to what businesses need to know about the African Continental Free Trade Area including:
- AfCFTA’s impact on movement and provision of goods and services and the respective taxation outcomes
- Business optimisation opportunities
- Customs and immigration
- Employment, including movement of personnel and potential changes in permit laws and regulations
- Intellectual property
- trade and investment advantages
- Potential anti-trust and market access issues
- Potential environmental obligations
- Legal issues surrounding mergers and acquisitions
- dispute resolution
The guide will assist businesses and investors to identify the major opportunities provided by the AfCFTA, while also identifying the blind spots and shortcomings in terms of the business models to adopt.
While as an Africa-focused Group, we will provide updates and new resources to help you keep ahead of the developments in the AfCFTA. What we have launched here ensures that businesses take full advantage of the opportunities offered by the AfCFTA and transact end-to-end in Africa (including in ultra-frontier markets), with absolute confidence and at the most competitive business cost.
Contact email@example.com to procure a customised AfCFTA Impact Report.
*Source Centurion Law Group
Hawilti Launches New Gas Coalition in Partnership with the African Energy Chamber
February 3, 2021 | 0 Comments
African Coalition for Trade & Investment in Natural Gas (ACTING) will act as the central platform advocating for natural gas across Africa.
The African Energy Chamber is delighted to announce the launch of the African Coalition for Trade & Investment in Natural Gas (ACTING), a non-profit initiative jointly managed with Hawilti Ltd.
ACTING will act as the central platform advocating for natural gas across Africa and will leverage on the core strengths of both the Chamber and Hawilti to promote natural gas as a transition fuel, attract capital in the African gas value-chain and engage stakeholders and societies on the benefits of natural gas consumption.
By leveraging on the Chamber’s pan-African and global network, ACTING will gather leading experts, executives and policy makers around key issues pertaining to natural gas in Africa, from upstream exploration & production, midstream infrastructure, downstream monetization and gas-to-power. The Coalition focuses on all the benefits that a broader adoption of natural gas can bring to Africans, especially when it comes to securing access to affordable, reliable, sustainable and modern energy for all, creating jobs and supporting industrialization.
The work of the Coalition will particularly focus on the collection of key market data and the distribution of high-quality information on opportunities, companies and projects shaping up the future of African gas. By offering the most comprehensive platform on African energy, Hawilti will be dedicating a substantial part of its investment research activities to natural gas in West, Central, East and Southern Africa. The Coalition will notably publish every year a State of Play report providing key market data on African gas, and all of its research will be directly available on the Hawilti platform.
“There is no doubt that 2020 has been a turning point for African gas. We are on the break of a true gas revolution across the continent as African nations seek to diversify their economies, decarbonize their energy mix and fully benefit from the roll out of the African Continental Free Trade Area (AfCTFA). We are seeing tremendous interest from regulators, investors and consumers to adopt gas on a much broader scale and produce cleaner energy, support industrialization and create jobs. ACTING will act as the vehicle accompanying all industry stakeholders on this journey,” declared Nj Ayuk, Executive Chairman at the African Energy Chamber.
“At Hawilti, we continue to believe that the lack of accurate and high-quality market data on African gas markets is a major impediment to investments and to the continent realising its full economic potential. With the launch of ACTING, we have made it a priority to gather, develop and distribute the most updated data on natural gas and develop true ESG reporting practices on African energy markets to inform policy and promote sound investment,” stated Mickael Vogel, Director at Hawilti.
ACTING believes in the promotion of transparent business practices and the adoption of sound environmental, social and corporate governance standards to promote investments across the African gas value chain. With its partners, it will be supporting a broad range of gas industries, including liquefied natural gas (LNG), liquefied petroleum gas (LPG), compressed natural gas (CNG), piped natural gas (PNG), gas-to-power and hydrogen. The work of the Coalition is accessible at www.ACTINGas.org.
About the African Energy Chamber:
Determined to promote growth in the African energy sector, the African Energy Chamber encourages collaboration between businesses and government and takes a leadership role in shaping policies, sharing best practices and using resources to create local value. The African Energy Chamber is the only pan-African and non-profit institution advocating for a better use of African natural resources to create jobs and work towards shared prosperity.
About Hawilti Ltd:
Hawilti Ltd is an investment research and sustainability reporting company that runs the www.Hawilti.com platform and the Hawilti App. The company notably works with public and private corporations on the disclosing and distribution of key ESG information in order to make African markets more transparent and competitive globally. Within a single digital space, Hawilti offers the most comprehensive resources on African energy, allowing its users to get the latest information on African markets, track ongoing and upcoming projects and develop solid sector analyses on competitors and market trends.
*SOURCE African Energy Chamber
A Pragmatic Solution to the BEAC’s FOREX Regulations Will Not be Reached Without the Involvement of Local Stakeholders
February 3, 2021 | 0 Comments
The African Energy Chamber continues to advocate for free-market policies across sub-Saharan Africa as the best enablers of economic growth and jobs creation.
The FOREX regulations imposed by the Bank of Central African States (BEAC) remain one of the major impediments to investments in Central Africa’s energy markets: Equatorial Guinea, Congo, Cameroon, Gabon, Chad and CAR. Even though their implementation was postponed from January 1st, 2021 to December 1st, 2021, their unchanged terms continue to make them anti-African and anti-jobs. Unfortunately, the industry lacks a coordinated action to engage with policy makers in the region, and most lobbying against the regulations has been done by international operators without the involvement of local stakeholders and companies.
Reaching a fair and just resolution that puts forth the interests of Africans, businesses and investors cannot be done without involving local services companies, local entrepreneurs and the local business community. They are set to suffer the most from such regulations and need to be part of the solution.
“A post-Covid19 recovery strategy can only work when it relies on international oil companies working with national oil companies and local services companies. Addressing market issues in restricted groups out of London and Paris is a practice that belongs to the past. Excluding African stakeholders from the debates and negotiations that can help them secure contracts and create jobs is not going to help take the industry into a sustainable and prosperous future,” declared Nj Ayuk, Executive Chairman at the African Energy Chamber.
The African Energy Chamber continues to advocate for free-market policies across sub-Saharan Africa as the best enablers of economic growth and jobs creation. The adoption and promotion of such policies cannot be a process done without the involvement of local industry groups and organisations whose interests are aligned with their foreign partners on such issues.
Consequently, the African Energy Chamber has decided to fund the establishment of a Committee dedicated to work on the FOREX matters in Central Africa, and led by Leoncio Amada NZE, CEO of APEX Industries and President for the CEMAC region at the Chamber. Under this Committee, the Chamber is inviting all local and international stakeholders to meet and consider a cohesive approach to push for an enabling environment in Central Africa that benefits local companies and entrepreneurs.
*Interested parties may express their interest by sending an email to firstname.lastname@example.org
Suriname Oil Discoveries are Cause for Celebration, but Only If We Apply Proven Lessons to Make it Work for Everyone
February 1, 2021 | 0 Comments
By Clarence Seedorf and NJ Ayuk*
Suriname has put in place a producer-friendly regime that the oil and gas industry has been quick to notice.
There’s no question that the COVID-19 pandemic has sent global energy markets reeling. Oil and gas has undeniably been one of the hardest-hit industries, with prices still struggling to rebound from the collapse in demand during the first quarter of 2020. Coupled with increasing concerns about climate change and its effect on conventional energy production, it seems difficult to find a bright spot.
But there is one, and it’s Suriname.
In the year since news reports first began describing a novel coronavirus in China, the resource-rich waters off the South American nation have become the target for increased drilling activity, and a growing number of producers are taking a chance on the region’s potential.
Last April, for example, Apache Corporation and Total reported a significant oil offshore discovery. The successful Sapakara West-1 well was actually Apache-Total’s second find in the 1.4 million-acre Block 58; they made Suriname’s first-ever offshore discovery at the nearby Maka Central-1 exploration well In January 2020. In fact, Apache is so convinced of the promise this region holds that it dropped its Permian Basin rigs in Texas to concentrate more fully on Suriname. And though Apache and Total may have been among the first to achieve drilling success offshore Suriname, they are clearly not alone. Exxon Mobil and Petronas announced a discovery in December 2020, and Shell has purchased Kosmos Energy’s participating interests in the region.
Friendly Fiscal Policy
With the U.S. Geological Survey putting the resource potential of the Guyana-Suriname basin at more than 13 billion barrels of oil — and only 26 wells currently in place — there’s no question why majors and independents are drawn to the area.
But what makes drilling offshore Suriname even more attractive is the favorable business environment being touted under the leadership of President Chan Santokhi, who took office last year.
Suriname has put in place a producer-friendly regime that the oil and gas industry has been quick to notice. Suriname’s 30-year production-sharing agreements are considerably longer than those offered by neighboring countries, giving oil companies more time to ramp up activities and continue producing. Suriname also takes a smaller cut of the proceeds compared to its neighbors. Combined with a lower overall cost of production, oil companies can achieve profitability even if oil trades in the $30 to $40 per barrel range.
This is all very good news, indeed. This is just the kind of strategy that’s necessary today to attract international oil companies (IOCs), and we encourage African countries to follow in Suriname’s example.
What remains unclear is how Suriname will steward the potential opportunities and revenues arising from its hydrocarbon bounty. Will it take its lead from Ghana, Norway, Guyana, Trinidad and Tobago, and other nations that are leveraging natural resource wealth to help the local population? And how can it avoid the mistakes of oil states that have seen their riches primarily line the pockets of foreign companies?
We are advocating for Suriname to harness the transformative power of oil and gas. We want to see everyday people benefit from these major oil discoveries. We envision oil-based wealth leading the country on a sustainable, profitable path. Built upon best practices from around the world — as reported in Mr. Ayuk’s book, Billions at Play: The Future of African Energy and Doing Deals — we would like Suriname’s leaders, civil society and business community to consider a plan incorporating local content, empowering women, improved governance, and more.
Local Level Impacts
Let’s focus first on how the oil and gas industry can support economic development through local content, as that has far-ranging consequences. As explained in Mr. Ayuk’s book, local content policies are derived from a simple philosophy: A nation’s natural resources belong to the people, so the people should benefit from their development. To a large extent, however, indigenous workers and supply industries have not historically reaped the kinds of economic and social rewards one would expect.
But increasingly, enlightened companies are adopting stronger local content initiatives in host companies. That includes ExxonMobil in Guyana.
In the oil and gas business, progress isn’t made overnight. Including exploration, the discoveries off the waters of Guyana were 10 years in the making. But from the start, ExxonMobil and its direct contractors prioritized local hiring. By the time production in the Stabroek Block began in December 2019, 1,700 Guyanese were among the company’s rank-and-file, comprising more than half the total local workforce, in fact. Since first oil in 2015, ExxonMobil and its direct contractors have spent $180 million with more than 630 local suppliers, setting the economy ablaze. Predictions by the International Monetary Fund (IMF) that Guyana’s economy would expand by 86% in 2020, compared to just 4.4% a year earlier, are now being tested by the coronavirus outbreak. However, an eventual return to business as usual could still result in unparalleled economic and gross domestic product growth.
Unfortunately, we can’t always rely on businesses to do enough of the right thing without encouragement—and regulations that safeguard against exploitation. Governments that create clear, reasonable local content regulations, develop resource corridors and special economic zones, provide tax relief, address skills gaps, and create a strong framework for industry partnerships can help oil and gas companies move local content practices forward.
In a growing number of countries, local content isn’t being left to chance or the benevolence of Big Oil. For example, in 2010, acting President Goodluck Jonathan signed the Nigerian Oil and Gas Industry Local Content Development Bill 2010 into law. Designed to build the capacity of indigenous firms, the law obligated upstream oil companies to provide opportunities for participation by local companies and workers. That included backward linkages through procurement of locally produced materials.
Other countries, including Kuwait, Iran, Iraq, Bahrain, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE), have all incorporated local content requirements into their legal frameworks through various avenues, including legislation, regulations, guidelines, industry contracts, and bidding practices. As Billions at Play notes, Tanzania requires a succession plan where foreign workers will be replaced by nationals. The government of Ghana will only permit a company to be labeled as “indigenous” when 80% of its executives and senior managers are Ghanaian citizens.
Employment is just one area where local content is being legislated, however. To support state-controlled training programs for indigenous personnel, the government of Angola levies a tax on petroleum production, refining and processing companies equal to US$0.15 per barrel produced. Companies engaged in prospecting must contribute an annual fixed amount of US$100,000; for companies in the exploration stage, that number jumps to US$300,000.
Local content development is essential, but it’s just part of what Suriname must do to capitalize on its new-found resource wealth. We believe leaders must also:
- Establish gender diversity policies for extractive industries. I think we can all agree that there is a serious lack of women working in oil and gas at all levels, but particularly in leadership roles, and the dearth is detrimental to companies as well as the countries where they operate. But the government of Suriname doesn’t have to submit to the same old standard. The country can require that companies working within their borders hire women, compensate them fairly, use women-owned suppliers and subcontractors, provide adequate family leave protections, and create education and training for girls and women, including STEM.
- Ensure strong governance. National oil company Staatsolie should follow Guyana’s lead and create an oil and gas industry regulator, removing itself from any oversight role. In addition, Suriname must refuse to allow corruption and authoritarianism to continue within its borders. This is hardly an isolated issue. As described in Mr. Ayuk’s book, during the period from 2000 to 2011, high oil and gas prices sent Africa’s economic growth to new levels. Yet most of the money never made it to the people. Instead, it was siphoned off by political elites through shell companies. The world is watching how Suriname will manage its oil revenues, especially as it rebounds from the economic slump of 2017-2018.
- Promote industrialization. Suriname can take a page from Trinidad and Tobago’s playbook. The twin nation’s robust natural gas industry and monetization strategies have enabled the development of a strong manufacturing sector, including the Port of Point Lisas Industrial Estate. For decades, Trinidad’s ample natural gas reserves were considered nothing more than a cheap way to keep its oil production, refining, and power generation facilities going. With Port of Point Lisas, Trinidad is attracting natural gas users who consume large amounts for both export and downstream industries. In Suriname’s case, oil can be used as feedstock for petrochemicals, creating jobs and injecting cash into the national economy.
- Form strategic partnerships with neighboring nations. Trinidad and Tobago has also been a major exporter of liquefied natural gas (LNG) from offshore areas. But when output began declining, the country sought a new supply source for its LNG plants, which it found offshore Venezuela. A 2007 agreement between the two nations allows for cross-border reservoir exploitation.
Apply Lessons Learned
Trinidad Prime Minister Dr. Keith Rowley recently said the Caribbean is “being heralded as the next major oil and gas province,” and the discoveries in Guyana and Suriname further bolster his claim. But to take full advantage of the economic opportunities they present, the Surinamese government, Citizens, civil society, and business community needs to apply lessons learned from other areas and to consider the expertise of those who have helped those nations reach their potential. Only then can Suriname’s people be assured that the celebration around new oil includes them, as well.
*Suriname-born goodwill ambassador Clarence Seedorf is one of the greatest football players in history and the only one to win the Champions League with three different clubs. In addition to his distinguished career as a midfielder, Seedorf coached on four continents. His mission to make the world a better place was recognized by Nelson Mandela, who named him a Legacy Champion in 2009. This select group of philanthropists is helping to ensure that Mr. Mandela’s legacy lives on. Seedorf holds an Honoris Causa degree in humanities, has earned the highest civil decorations from the Netherlands and Suriname, and has served as both a UEFA Global Ambassador for Diversity and Change and juror for the FIFA Diversity Award. He is a business consultant and public speaker.
*NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.
*SOURCE African Energy Chamber
The African Continental Free Trade Area (AfCFTA): Future of Sports and Entertainment in an Economically United Africa
January 22, 2021 | 0 Comments
It is still too early to gauge how the AfCFTA will affect the sports and entertainment industry, since the agreement is still in its early stages of implementation.
January 1st, 2021 marked the start of trading under the African Continental Free Trade Area (AfCFTA) agreement. In ratifying the agreement, 34 African countries have created the largest free trade zone in the world by country participation. This is a historic point for the continent, it is the beginning of what is hoped will, at the very least, form a workable framework for a modern African economy. An African economy that will allow free movement of labor and goods within member States – a drastic change from the current siloed economic structures, and hopes to foster intra-African trade, industrialization and self-reliance.
Economic co-dependency or cooperation between sovereign States is not a new economic strategy. Europe has sought to achieve this at the regional or supranational level through the establishment of the European Union. However, the recent decision of the United Kingdom to leave the EU shows that the goal of integration is not without its challenges.
The United States has functioned for so long as a collage of economic co-dependent states that few pay much attention to the analogies with modern supranational regional organizations such as the European Union. However, on closer inspection, it is clear that the same rules of a shared currency, open borders and the full economic integration of the states played a large and important role in the growth, stability and development of the US. There are similar associations in Asia – the Association of Southeast Asian Nations (ASEAN); and in the Arab region – the Council of Arab Economic Unity (CAEU).
Africa has also championed regional economic integration, but never at the level or scale of the AfCFTA and, indeed, not as successfully as in other world regions. African economic communities like ECOWAS, SADC, EAC and others, have failed to substantially integrate their disparate national economies which would have served to protect the region from exploitation by its neighbors to the east and the west.
With consumer population projections favouring Africa, and a combined consumer and business spending projection of $6.7 trillion by 2030,  the time is now for Africans to look inwards for solutions to the continent’s economic woes. The sports, media and entertainment industry is one space where the continent continues to show promise. African content competes favourably on the radio and streaming networks on a global scale, spurring key investments from media giants like Disney and Netflix. The continent is also a major contributor in the world sports industry particularly in consumption and talent exportation. The discussion must now revolve around the question of how the AfCFTA and intra-African collaboration can be best employed to secure these industries’ futures.
The answer: developing local industrialisation, production and distribution infrastructures for the consumption of sports, media and entertainment. This is key to the success of the AfCFTA in these industries. It will be near impossible to unlock the true value of this agreement without Africa first fixing its infrastructure deficit and this is relevant even beyond the sports and entertainment sectors. African countries must aim to localize its production and distribution processes as much as possible to control a larger part of the African market.
For example, the music industry today is primarily dominated by streaming consumers and with the rise of movie streaming platforms like Netflix and Amazon TV, the film industry is leaning towards this model as well. From the onset of the digital revolution, China was branded “isolationist” for regulating the entrance of businesses like Google and Facebook into the country to give local alternatives a chance to develop. This move may have been branded as a security move, but it has also proven to be an economic boon to Chinese competitors in these spaces. With this agreement, the time is ripe to develop African digital infrastructures to leverage upon the continent’s population resource in industries like music and film where there is already an appreciable global presence. It is indeed the right time to create our own entertainment giants!
In the sports arena, rather than constantly exporting our best talents, local investment in sports like football, for example, can provide the required infrastructure to ensure that African athletes can thrive right here on the continent. This will serve to effectively reduce talent flight, a major challenge in the industry today. It could eventually place African leagues at par with the popular European leagues where so many players of African descent consistently perform excellently.
It is still too early to gauge how the AfCFTA will affect the sports and entertainment industry, since the agreement is still in its early stages of implementation. We are also yet to observe how committed member States are to this intended collaboration. One thing is for sure though; any initiative that welcomes the free movement of goods and services within Africa and promotes intra-African investments and cooperation on intellectual property rights is a huge step in the right direction for a continent with much to benefit from greater economic integration.
It’s Time to Rethink Licensing Rounds: For Africa’s Oil- and Gas-Producing Countries, Negotiating the Current Environment May Require…Negotiation
January 19, 2021 | 0 Comments
By NJ Ayuk*
While the details vary by country, the licensing round process has, in general, become too prone to delays and uncertainty.
In late 2019, as the African oil and gas industry was looking to the future with optimism, Offshore Engineer wrote that the continent was had reason to expect a “more productive 2020.” Instead, the unforeseen happened, and the COVID-19 pandemic had a devastating impact on the oil and gas industry in Africa and around the world.
But even at the end of last year, during a fairly strong period for oil and gas, the publication mentioned that “delays and hiccups” were impacting licensing rounds — that is, the processes by which investors can seek oil and gas exploration licenses from the government – and argued that improvements would have to be made going forward.
This is correct. Licensing process improvements were already needed in late 2019, and now that the oil and gas industry is in the survival mode, it’s more urgent than ever to streamline licensing.
While the details vary by country, the licensing round process has, in general, become too prone to delays and uncertainty. All too often, exploration and production (E&P) companies have to wait one or two years before the exploration projects they propose are sanctioned. These practices, which help protect the interests of oil-producing nations, made sense when crude sold for $100 a barrel. But they don’t make sense now.
After all, conditions are still uncertain. True, crude pricing forecasts for 2021 are cautiously optimistic at the moment, and Goldman Sachs has said Brent oil prices could reach $65 per barrel by this summer, up from the $50-range we’re seeing now. But the outlook for Africa’s petroleum market remains shaky at best.
And it’s not just Africa: The global oil and gas industry continues to feel the negative impacts of the COVID-19 pandemic, which dramatically lowered demand for petroleum products. As a result, oil and gas companies have made dramatic cuts to their capital spending programs, resulting in the postponement and cancellation of numerous exploration and production (E&P) projects around the world.
Under these circumstances, it’s up to African oil and gas producers to do everything possible to encourage as much E&P activity as possible, particularly by international oil companies (IOCs). In the long term, of course, African producer states do need to lessen their reliance on oil and gas revenue. But for now, a number of them rely on it for much of their budgets. And as long as they do, they ought to ask for more. They should lobby for knowledge transfers, training, gas monetization programs, and other significant opportunities so that their strategically managed oil and gas operations can create pathways for economic growth and diversification.
I’ve made a case for the importance of strategic fiscal policies, from revised production sharing contract (PSC) requirements to reduced tax and royalty requirements. Some of my friends in government have strongly criticized me for this and called me a sellout and a whiteboy. I disagree with them and I still love them, but resource nationalism is not the way to go and it is actually dangerous. I truly believe that these changes are necessary to give IOCs an incentive to explore in Africa during the current downturn. But we can’t stop there. We need to consider other pain points that discourage foreign operations in Africa and find ways to eliminate those challenges as well.
The licensing round process is one of those challenges. So why not remove this hurdle? Not all countries use licensing rounds; some use direct negotiation to approve exploration and production rights. I believe it’s time for more African oil and gas-producing states to choose this route. Negotiating with trusted explorers would help them avoid unnecessary delays and bureaucratic red tape. Making these changes would still allow them to emphasize their own priorities – and it might also make IOCs more likely to keep exploring within their borders.
Licensing Rounds Sound Good In Theory
Generally, during licensing rounds, companies submit bids or grants to issuing governments in hopes of being awarded an exploration license – that is, the right to search for commercially feasible petroleum deposits. In the case of bids, the highest ones get a license. Grant approvals, by contrast, are based on prospective explorers’ experience and capabilities. Licenses are awarded for set periods of time, and if commercially viable amounts of oil or gas are discovered, the explorers can negotiate contracts with the government for the right to extract what they find.
The licensing round process does have benefits. For participating countries, it helps make sure interested companies have the necessary financial resources and technical capacity to explore successfully. It ensures that projects are completed in a timely manner. It also helps E&P companies, since the process lays out their rights.
But again, even with their strengths, licensing rounds can create unacceptable hardships for oil companies: Countries tend to take a long time to make their licensing decisions. And when capex budgets have been slashed, waiting one (or even two) years to learn if an exploration project has the green light just won’t cut it. In today’s economic environment, it just isn’t realistic to insist on putting much-needed resources aside on the chance that they’ll be needed in a year or two.
And if we’re going to be honest with ourselves, we have to admit that we’re seeing more and more examples of licensing rounds gone wrong, from extended delays in getting the bidding process started to instances of little to no company participation.
Licensing Rounds Yielding Disappointing Results
Consider Algeria, where oil and gas production rates were already declining in 2019, before the pandemic, largely because of repeated project delays caused by, among other challenges, slow government approval. During four licensing rounds, Algeria saw minimal interest from investors.
Nigeria, too, is known for the less than speedy pace at which it sanctions exploration projects. Even before COVID-19, its slow movement on this front contributed to a decline in oil production over a 10-year period.
And in 2019, as I mentioned, there were licensing round mishaps in multiple countries. “Some rounds, for example, Ghana’s First Licensing Round, have seen limited successes, while others have suffered delays or suspension,” GlobalData Upstream Oil & Gas Analyst Toya Latham told Offshore Magazine. “Gabon’s 12th Licensing Round and Somalia’s First Offshore Licensing Round have been extended in 2020 (in part due to delays in enacting pivotal legislation), whilst Madagascar’s long overdue licensing round has been suspended.”
And we saw licensing rounds go wrong before that. In early 2018, for example, only one company responded to Cameroon’s licensing round, in which eight blocks had been available. Think about it, just one and the bureaucrats still think all is right. These issues haven’t been limited to Africa, by the way. In 2017, only one bidder responded to an opportunity to explore five offshore blocks in Lebanon. Brazil had a couple of licensing rounds fizzle in late 2019: the Transfer of Rights Surplus Round, which only brought in two bids, and the Sixth Production-Sharing Bid Round, which only attracted one bid.
We Must Consider Investors’ Perspectives
Fast forward to the oil and gas industry of 2021. In today’s reality, delayed licensing round starts and long waits for decisions are more likely than ever to dim companies’ interest. These challenges aren’t trivial, since operating in Africa already represents significant risks and expenses for IOCs. Companies must, for example, factor in the possibilities of security concerns and lapses in infrastructure along with the risks that come with every exploration project, including the failure to find commercially viable petroleum stores. Then there are the additional expenses of operating overseas, complying with local content policies, supply costs, and a myriad of taxes and fees, among others.
I’ll be the first to trumpet the opportunities for IOCs in Africa, from our vast stores of oil and gas to large swaths of unexplored territory. But we have to be realistic about how businesses work. Companies need to be able to make a reasonable profit in order to justify their outlays. And when the oil and gas industry is in the midst of a downturn, as it is now, excessive risks and expenses are the last things IOCs can consider. So we have to work with IOCs and do what we can to help them profit in order to convince them to choose African sites over other options.
Direct Negotiations Could Be a Win-Win
That’s why I think a transition from licensing rounds to direct negotiations makes sense for African countries. For one thing, negotiation periods would not be tied to rigid opening and closing schedules as licensing rounds are, minimizing the risk of unreasonably long waits for a decision. Even better, direct negotiations would allow E&P companies to work with countries to discuss, and possibly adjust, the major terms of their production contracts.
With that kind of flexibility, companies with concerns about a country — whether they have questions about tax laws or local content requirements — might be willing to pursue exploration opportunities that they would have turned down, had they been required to participate in the bidding process.
We Can Make This Work
True, even with a different licensing scheme, African countries will have other unique risk factors to address – factors that could make IOCs hesitant to invest in Africa. High on that list are concerns about corruption. That’s why the African Energy Chamber pushes so strongly for meaningful transparency measures.
And again, we can’t overemphasize the importance of creating fiscal regimes more favorable to IOCs. Those measures should include, along with fairer tax and royalty requirements, the creation of natural gas-specific production-sharing contracts, rather than relying on crude oil PSCs as a one-size-fits-all template. A lot of countries have a difficult time working with companies to get to FID on natural gas discoveries. Not only will gas PSCs help make it easier for companies to conduct profitable gas projects, they also could help prevent problems and lengthy negotiations when explorers find gas, rather than crude.
IOCs are, and can continue to be, invaluable allies to African nations. Their E&P activities contribute revenue that many oil and gas-producing countries rely on now, but we also can work with them to foster economic growth and diversification for tomorrow. African countries need IOCs to create job and business opportunities today, but we also can work with them to achieve capacity building and technological know-how that will pave the way for a better future. It only makes sense to do everything possible to give explorers the certainty, predictability, and incentives they need to be competitive in Africa.
*NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.
Senegal already produces Gas: Investors should look Onshore
January 16, 2021 | 0 Comments
|The emergence of Senegal as a regional energy power is an exciting story|
|DAKAR, Senegal, January 15, 2021/ — Senegal is the hotspot for energy investment in West Africa right now, owing to a string of huge offshore hydrocarbons discoveries since 2014 (as well as its compelling renewables potential). The emergence of Senegal as a regional energy power is an exciting story. But for almost two decades, in fact, the country has been producing its own natural gas onshore, an hour’s drive from Dakar. Further investment could unlock Senegal’s onshore potential.|
Introducing Onshore Senegal
Fortesa International, led by CEO Rogers Beall, started exploring in Senegal in 1997 and from the start, Beall aimed to create a business that was fully Senegalese. Today, the company has a staff of 125, with two expatriate mentors and some African expatriate staff, but the vast majority (around 98 percent) is Senegalese nationals. Beall has continually advocated for Senegal with U.S. companies and now serves on the U.S.-Africa Committee for the African Energy Chamber.
As AOP drove out to the Fortesa production site this week, Beall pointed to a plateau in the far distance, while we passed through a shallow valley. That, he said, is the edge of the 120-square-kilometer Thiombane Dome geological formation. It sits on the eastern side of the carbonate shelf edge that runs north to south along the coast of West Africa.
Volcanic eruptions in the sea 175 million years ago, joined up by sand blown in from the Sahara, created the Dakar peninsula. That same feature on the carbonate shelf edge extends deep into the Atlantic Ocean, and this is the basis for the massive offshore oil and gas fields generating so much excitement globally. This is where North America used to connect to Africa, and where we are driving now used to be the state of Georgia before it was the deep ocean bed. The African plate itself never moved.
“The single place between Morocco and Guinea where that shelf comes onshore is east of Dakar,” says Beall. Here, on land and a short drive from the capital, Fortesa is operating seven wells (one out of service temporarily due to an accident – the company’s first serious one – on December 20, 2020) tied back to a gas processing plant. The manifolds and tanks were built in Senegal, the whole facility was assembled by a local team, and on our visit, we met with dozens of Senegalese workers who had trained with Fortesa and were operating the facilities.
The Gadiaga field usually produces 3 million cubic feet (mcf) per day and could produce 7 mcf per day. This small field has produced just over $95 million of natural gas. But, as Beall says, “This is small potatoes compared to what Senegal needs.” The geology says that Gadiaga may sit next to a much larger gas field situated on the edge of the shelf in the Thiombane Dome. This strong potential is what Fortesa wishes to explore and develop, with fellow investors.
Natural Gas Could Do More
Fortesa’s operation may look familiar in the Niger Delta, where local companies have been producing onshore from marginal fields since 2002. But in this region, Fortesa’s gas production business is unique, and like the most effective Niger Delta marginal field companies, it enjoys the support of the local community to staff and safeguard the well sites, pipe yard and processing plant.
Energy independence is the key to Senegal’s success, says Beall. Energy poverty is a trap that ties people down to subsistence living from Senegal to Somalia. Natural gas, available in abundance onshore as well as far out to sea, can be a fuel to remove those limits.
“Right now, this country is paying $14 per mcf by using heavy fuel oil. [In doing this] they are making six times the pollution, six times the negative effect on the planet, and nearly double the cost,” says Beall. “We are able to make the investment and take the risk of drilling onshore, and [in this region] only Fortesa is doing this.”
Natural gas is cleaner and cheaper than the alternatives. It provides direct and indirect jobs for hundreds at Gadiaga, and more of it is available onshore. The company is keen to expand within its acreage to find and develop the onshore elephant that the geology points to, as well as optimizing current production. But with European and other Western financing institutions now shutting down funding for hydrocarbons, few options are available to fund expansion.
The Foundation Is Already There
Fortesa built a foundation for Senegal’s emergence as an energy player. Beall believed in the potential of Senegal before many in Europe and North America had thought to examine the country’s subsurface. His company worked with or trained many of the people now going on to run the sector or work at the national oil company Petrosen and others.
Onshore gas growth is possible and would lead to direct job creation and sustainable energy provision to households and businesses – and save on costly and high-polluting fuel oil imports.
“This is one of the most cost-effective operations in Africa. Fortesa has essentially unlocked the value of Senegal’s energy resources. The projects run by Rogers and his team are sound and are an example of projects that can generate cash and deliver the return on capital that investors are looking for,” said NJ Ayuk, Executive Chairman of the African Energy Chamber, to AOP. “I see a team that is focused on improving asset-level economics, reducing capital outlay, and stretching their dollars to do more with less.”
AOP’s mission is to bring investment to African energy of all kinds, with a view to making life better for people and businesses. Issues of climate change and sustainability must be addressed urgently. But comparatively clean natural gas and the people that produce it (and industries that can use it) should not pay the price for Western institutions’ opposition to funding hydrocarbons. “We need to give a chance to people to advance,” Beall told us. “Let’s do things that work.”
*SOURCE African Energy Chamber
OUT NOW! 2nd Edition of “Billions At Play” charts recovery path for African Oil & Gas Sector
January 14, 2021 | 0 Comments
Loyal to his upbeat approach and straightforwardness, NJ Ayuk offers pragmatic answers and solutions to the historic challenges the industry has faced throughout 2020.
Talking about oil & gas isn’t easy, especially at a time of widespread anxiety about the link between fossil fuels and climate change. But NJ Ayuk, the experienced oil and gas dealmaker who heads the Pan-African legal conglomerate Centurion Law Group and serves as Executive Chairman of the, African Energy Chamber has never been one to shy away from difficult conversations. Instead, he embraces opportunities to approach thorny questions head-on, with a spirit of optimism about the future.
Following the widely acclaimed release of his second book, Billions At Play: The Future of African Energy and Making Deals, Nj Ayuk has now released a 2nd edition of the best-seller that takes into account new market realities in a post-Covid19 era. Loyal to his upbeat approach and straightforwardness, he offers pragmatic answers and solutions to the historic challenges the industry has faced throughout 2020, detailing how a recovery can rely on better gas monetization, wider energy cooperation, stronger capacity building, an a more sustainable development of African natural resources.
This second edition opens once again on a foreword by H.E. Mohamed Sanusi Barkindo, Secretary General of the Organization of Petroleum Exporting Countries (OPEC) and features a new chapter dedicated to the impact of the Covid-19 pandemic on African oil markets. It is now available on Amazon and has for the first time been narrated by Adera Gandy and Boet Schouwinck as an audiobook also available on Audible and Barnes and Noble’s Nook .
The book is also available through leading retailers including Exclusivebooks.com , TakeAlot.com , Google Books , eBooks.com , Kindle and many more!
In Billions At Play, Ayuk places the energy sector at the center of the continent’s economic growth and argues that the oil and gas sector is well-positioned to turn the African narrative around. Billions At Play became number one on Amazon in several categories only a few days after its initial release in 2019, making it one of Africa’s energy best-seller.
The book’s critical solutions to key issues such as investment deals negotiations, electricity shortage or technology have earned it the support and praise of several leading industry executives from North America, Europe and Africa. At a time when the continent tries to position itself within the global energy transition debate, this second edition will be offering a comprehensive road map for Africa to do a better job at using its vast natural resources to fuel economic growth and improve the lives of hundreds of millions of Africans.
*SOURCE African Energy Chamber
Angolan Legal Reform Shows How Africa Can Use Oil and Gas as a Springboard Towards Job Creation
January 8, 2021 | 0 Comments
–But Only if It Looks Beyond the Obvious Options
By NJ Ayuk*
|Africa’s oil and gas resources have the potential to accomplish so much good for the continent’s people.|
For decades, many of Africa’s oil- and gas-producing states followed a predictable pattern. They treated their oil and gas primarily as raw materials that could be sold abroad for a quick profit, rather than as a means of supporting efforts to make more lasting changes in the economy of the nation as a whole.
This pattern has had unfortunate consequences. It discouraged investment in local capacity, and it fostered the development of arrangements under which most residents of the producing states could not see how the large amounts of money earned from oil and gas exports were improving their lives. In other words, it allowed most hydrocarbon revenues to flow back to the home offices of international oil companies (IOCs) or to go to national oil companies (NOCs) that transferred funds to local governments — and, in many cases, to individual government officials, along with their friends and family members.
Africans already know that focusing on oil exports doesn’t yield the best results. They already know that it ignores the need for long-term investment and fosters corruption.
But corruption isn’t the only issue. Africans also know that the old pattern of focusing on commodity exports doesn’t do enough to put their economies on track for long-term growth and keep them there.
They know, in other words, that the old habits don’t create jobs.
At least, maybe they don’t create large numbers of jobs. Or maybe they don’t create the kind of jobs that last long enough or have enough impact to lead to real change.
And why should it be that way? Africa’s oil and gas resources have the potential to accomplish so much good for the continent’s people – and that includes creating training and job opportunities across multiple sectors, which is one of the keys to sustainable economic growth. This can be accomplished by strategically harnessing oil and gas to monetize value chains and diversify economies. And to do that, we need to create an environment that enables new businesses to launch and thrive.
As the Chamber’s 2021 Africa Energy Outlook says, “Using the stimulus afforded by the natural resources to stimulate jobs in other economic sectors with higher labor intensity is where a significant amount of jobs can be created.”
So it’s time to broaden our view of Africa’s oil and gas resources. Instead of treating them only as a revenue source, we must approach them as a path towards a very important goal: empowering Africans to improve their own lives.
Local Content for Local Jobs
Africans understand the necessity of breaking free of old patterns, and they’ve tried to address the challenge with policy changes. In Angola’s case, they have sought to thwart old oil habits of the past by embarking on a fundamental reform of how the sector works. This entailed taking away regulatory powers for the sector from the national oil company Sonangol and giving those to the newly created National Oil, Gas and Biofuels Agency (ANPG). The restructuring of the sector, that resulted in the creation of the ANPG and the reorientation of Sonangol, is arguably one of the greatest achievements of H.E. Diamantino Pedro Azevedo, Angola’s Minister of Mineral Resources and Petroleum who was brought in to reform the sector. This enabled Sonangol to embark on its own restructuring, at the core of which is the sale of non-core assets and a withdrawal of what Sonangol is expected to do; be a competent partner to foreign operators, and cost efficiently run its own operations. These changes, though very recent, have already stated bearing fruits. The newly created agency, under the chairmanship of a recognized industry expert Paulino Jeronimo, has moved swiftly, to usher in the implementation of new local content guidelines. They have also refocused their efforts on making new acreage in Angola attractive for investment, in an effort to stop the expected decline in output, mid to long-term.
In more general terms, though, they’ve also introduced policy initiatives that aim to create jobs. In Angola, the government recently rolled out a new legal regime for local content requirements after two years of concertation with the various stakeholders.
President João Lourenço, who introduced the new rules last month, has made the job-creation angle clear. He has described Presidential Decree 271/20 as a way to promote Angolan commercial entities’ participation in the development of the oil and gas sector. He has said he hopes the new measure will encourage IOCs to obtain goods and services (including raw materials) from local providers and to replace foreign experts with local workers.
Presidential Decree 271/20 also stresses the Angolan government’s desire to strengthen “national entrepreneurship.” It states that foreign technical assistance and management contracts must include provisions for the establishment of detailed training and professional development programs and the transfer of expertise and technology.
Training Across Sectors
This all sounds like a good idea — and a plan for concrete action as well. Presidential Decree 271/20 doesn’t just talk about increasing local content; it also replaces all the previous local content measures approved between 2003 and 2009. It offers a more detailed description of the factors that qualify an entity as an Angolan company and outlines the procedures that will allow the government to keep an up-to-date list of the parties that are pre-qualified to bid for contracts with IOCs
But does it really go far enough?
In some ways, it does. And by that, I mean that I’m glad to see that the decree talks about the need to make sure that Angolan workers have access to detailed, effective, and sophisticated training programs— and about the need to include provisions for such training in foreign management and technical assistance contracts.
In other ways, though, I’d like President Lourenço and his government to go further. I’d like them to think about exactly what kind of training might serve Angolans best. For example, what if they decided to prioritize training in information technology (IT) and operational technology (OT) skills? Might they find that workers who learn how to operate the control systems used to maximize the efficiency of, say, gas pipelines also turn out to have the skills needed to operate similar equipment in manufacturing plants? And might such workers turn out to have something even more useful, such as the skills needed to set up and promote a new tech hub that could serve as another new source of jobs?
A More Expansive View of Oil and Gas
I also think there’s room for Angola to take a more expansive view of oil and gas. That is, I think the government ought to look further down the value chain so that its new policies don’t emphasize conventional upstream, midstream, and downstream operations (and the ways that Angolan companies can support them) while overlooking other opportunities. Oil and gas aren’t just raw materials to be exported. They can also serve as feedstock for the production of petrochemicals, fertilizers, and other value-added goods. They can be used to power energy-intensive industrial facilities such as manufacturing complexes. They can also fuel power plants that increase domestic electricity supplies to such an extent that life gets better for residential and business customers alike.
In turn, all of these new enterprises will have to hire people. They will need construction workers to build their physical plants, skilled and unskilled workers to keep their facilities running, IT and OT experts to operate and maintain the digital systems that help maximize efficiency, contractors to provide services such as food and transportation, and so on. In short, they will create jobs — and in so doing, they will show that oil and gas amount to something more than exportable raw materials.
Furthermore, if Angola can pull this feat off — if it can use its new policies to lay a foundation for job creation that both includes and transcends oil and gas — it will be in a position to show other countries in Africa how to do the same thing. It will be able to set an example capable of inspiring Africans who want to see the old patterns of hydrocarbon development broken.
Global impact and market stability
Finally, it is important to acknowledge the role that Angola and its current Minister of Mineral Resources, Petroleum and Gas, Diamantino Pedro Azevedo is playing as president of the conference of ministers of OPEC. Without market stability and a realistic price environment for crude globally, all potential benefits from the industry in Angola will be short-lived. OPEC Plus’s January 5th 2021 agreement to allow some of its members to cautiously increase production in February and March in a coordinated manner, is also due to Diamantino’s tact and experience. It is even more encouraging for the global oil markets, that Saudi Arabia is backing the current OPEC Plus deal with additional cuts of its own. This is good for Angola’s oil sector and Angolan jobs.
*SOURCE African Energy Chamber.NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.
What happens to the African Energy Industry if Western Lenders cut off Loans for Fossil Fuel Projects?
January 6, 2021 | 0 Comments
|A little more than a year ago, in November 2019, the European Investment Bank (EIB) declared its intention to phase out funding for fossil fuels|
By NJ Ayuk*
A little more than a year ago, in November 2019, the European Investment Bank (EIB) declared its intention to phase out funding for fossil fuels. Specifically, it said that it would no longer grant loans for projects involving crude oil, natural gas, and coal as of January 1, 2022 (with a scant few exceptions for gas projects that meet rigorous environmental criteria).
In making this announcement, the EIB made history. It became the first major multi-lateral financial institution to make a public commitment to abandon fossil fuels in the name of combatting climate change.
Its pledge did not go unnoticed. In October 2020, Antonio Guterres, the secretary-general of the United Nations (UN), called on the world’s publicly funded development banks to follow suit. Less than a month later, all 450 of these institutions — including, incidentally, the African Development Bank Group (AfDB) — agreed to bring their lending policies into line with the Paris climate accord.
The agreement did not include a categorical ban on fossil fuel loans, since some of the lenders involved, such as the Asian Development Bank (ADB), were unwilling to make this commitment. However, a group of European lenders did exactly that — and they were hardly alone in doing so.
You see, public development banks aren’t the only institutions to have made climate commitments. Since the beginning of 2020, a number of major private lenders — including but not limited to giants such as Barclays, HSBC, and Morgan Stanley — have rolled out plans to reach net-zero in greenhouse gas (GHG) emissions by 2050. Others — such as Blackrock, a major asset management firm — have pledged to make more money available for renewable energy projects. And just a few weeks ago, South Africa’s Standard Bank Group joined the chorus, saying it would no longer fund fossil fuel projects unless the sponsors could demonstrate compliance with strict environmental standards.
And it’s not just the banks. Climate considerations are now driving some of the world’s largest oil and gas firms, with multi-national giants such as BP and Royal Dutch/Shell and slightly smaller operators such as Occidental Petroleum, aiming to hit the net-zero mark by 2050. They may also come to drive the U.S. government’s policies, as President Joe Biden has declared climate change one of the first priorities of his administration.
Is This a Tipping Point?
So what next? Should I follow the Bloomberg news agency’s example and talk about 2020 as a tipping point for climate activism? Should I try to extend the story I outlined above into the future and paint this year as the beginning of the end for fossil fuels?
That’s not what I want to do.
That’s not what I want to happen.
Instead, I’ll try to explain why I think the move away from financing fossil fuel projects has the potential to hurt Africa. And I’m going to do it by imagining what might happen if this move continues.
What Happens If Climate Concerns Dominate?
In this scenario, climate concerns come to dictate the lending policies of Western financial institutions. By 2025, all of the world’s publicly funded development banks have joined the EIB in declining to fund fossil fuel projects (even though a select few organizations are still managing to attract small-scale creditors after agreeing to adopt onerous and costly carbon offset arrangements). Private lenders have followed suit, making it known that they will only support renewable energy schemes (and that they prefer to do business with companies and governments that fall in line with their own net-zero pledges).
As far as the leaders of these financial institutions are concerned, they’ve done the right thing. They’ve done their part to uphold the Paris agreement and prevent the disasters caused by climate change. They’ve responded to the concerns of the public (and of their shareholders). And aren’t fossil fuels a risky investment nowadays? After all, demand never quite recovered after the COVID-19 pandemic hit, and prices have stayed rather low. Oil and gas are quite out of fashion now, really!
The View from Africa
But the view from Africa is likely to be different.
In Africa, climate considerations and ideological commitments to eliminating GHG emissions may well take a back seat to more urgent questions about how to encourage economic growth and supply basic necessities to the continent’s growing population. In countries with large natural gas reserves such as Mozambique, Tanzania, South Africa, Nigeria, Algeria, Equatorial Guinea, Ghana, Cameroon, Senegal, and many others, politicians, businessmen and everyday people should ask their western counterparts why they should decline to extract a resource that could be used to produce electricity cheaply and reliably for both households and businesses. They should ask why they should forego the opportunity to develop an industry that creates jobs, both directly and indirectly, and promotes trade with neighboring states that also need energy. They should ask why they are being discouraged from using the least polluting of the fossil fuels and pushed towards renewable energy solutions that are less reliable and more expensive per unit of power generated. They should ask why Africa should be punished for western nations GHG emissions. They should ask what happens to energy poverty. They should ask who will pay reparations to Africa if Africans have to abandon their natural resources.
They may also ask why they should make the same sacrifices as Western countries when they don’t have the same advantages as those countries — including, say, the complement of legacy, gas-fired power plants needed to ensure that electricity supplies continue all day and night, without interruption, even at times when the wind isn’t blowing, and the sun isn’t shining.
Africans should also question the need to leave crude oil in the ground – and they should! For many of them, their oil industry and service companies are a major source of income. And while they may be willing to see that source phased out gradually, they’re not likely to assent to plans for killing them off abruptly.
Also, what about independent African exploration and production companies? What about African oilfield service companies and midstream operators? Shouldn’t they have a say in their future too?
Meanwhile, what about all the time and resources that a number of African leaders have invested in creating policies that encourage international oil companies to invest in their countries, from improved fiscal regimes to transparency laws to win-win local content policies? There’s no question that these leaders were interested in oil revenue, but there is so much more to gain from these policies, from much-needed technology transfers to business and growth opportunities for local entrepreneurs. In the wake of the COVID-19 pandemic, African economies need these opportunities more than ever.
Leaving China As the Only Option
Amidst all these questions, there may be a few determined types who seek to push forward with upstream oil and gas development despite the lack of support from Western banks. Heads of state may try to subsidize gas projects (or provide other forms of support) in an attempt to build up domestic capacities and promote self-sufficiency in energy. Entrepreneurs may reach into their own pockets or work to drum up local support, in the hope of using abundant natural resources to turn out products for which there is demand.
Without access to Western capital, such initiatives are more likely to fail — or, at least, to falter. If so, their backers may very well look for support elsewhere. And they may find it in China, which has been very willing to provide financial and technical assistance for fossil fuel projects in Africa.
Personally, I find the prospect of Beijing becoming the main source of outside financing for African oil, gas, and gas-to-power projects to be concerning. I’m not saying this because I think African states ought to shy away from cooperation with China. I’m saying it because I want them to have as many options as possible. I want them to be ready to work with a wide range of partners, rather than fall into a pattern of not having to look further than satisfying China’s requirements.
And this won’t happen if Western lenders cut off funding for African oil and gas projects as a consequence of their commitment to curbing climate change.
Instead, China will come to have more influence than any other party over the African oil and gas sector. China, which has already put a number of African countries in the position of handing over important assets when they find themselves unable to keep up with loan payments. China, which has a less-than-stellar track record on environmental protection, despite being a signatory to the Paris climate accord.
Time to Make a Case for Oil and Gas
As I’ve already said, this is not the outcome I want.
Instead, I think Africa should have the chance to use its own oil and gas to strengthen itself especially with the coming into force of the Africa Continental Free Trade Agreement.
I also think Africa should have more than one option when it comes to financing petroleum projects.
Most of all, I think Africa should have the chance to make its own choices without undue pressure from Western institutions that don’t face the same challenges. Africans have to become more visible, more vocal and even more hopeful about the future and the energy sector.
As a result, I think African states ought to push back against the idea that it’s time for Western banks to stop all funding for fossil fuels. I think that African oil and gas producers ought to stand up for themselves and make a case for developing their own resources — particularly for using the least-polluting fossil fuels to deliver as much electricity as possible to as many people as possible.
And the time to make that case is now, while financing for oil and gas is still available.
*SOURCE African Energy Chamber.NJ Ayuk is Executive Chairman, African Energy Chamber.
What the U.S. Political Transition Might Mean for Africa Generally and Its Oil and Gas Sector in Particular
December 30, 2020 | 0 Comments
By Jude Kearney*
US Africa relations will likely improve by virtue of Trump’s exit.
2021 could be the beginning of a much needed reset for US relations with Africa and its various countries and regions. To date, most African governments have responded positively to the results of the recent U.S. presidential election, with many African leaders offering their congratulations to Joe Biden. That is no surprise: Donald Trump’s presidency has been, at best, a mixed bag for Africa and Africans.
President Trump’s Africa Legacy
Unfortunately for Donald Trump, his widely reported use of profane and vile language in a closed door meeting to describe African and other developing countries is now viewed by many, including most Africans, as clear evidence that he is uninterested in any meaningful or supportive relationship with Africa. While I accept it as fact that such derogation of a whole continent of peoples displays bigotry and disdain towards Africans, it is nonetheless true that, by some measures, his administration’s substantive policies and actions towards Africa are not all negative. For instance, it is a fact that Trump played a role in facilitating the April 2020? “OPEC plus” deal which helped to stabilize the oil industry and gave African oil-producing nations new opportunities to recover from COVID-19-related economic hardships. Certain of his administration’s senior officials and agencies have championed policies devoted to creating openings in Africa for US and Western investments, though primarily as a geopolitical hedge against our nation’s chief international hegemonic rivals. Indeed, the Prosper Africa program was launched by his administration pursuant to the stated intention to utilize the resources of the, including the balance sheet of a new, highly capitalized US Development Finance Corporation, to more forcefully compete for partnerships and commercial opportunities for US businesses in Africa.)
But let’s be clear: Among Africans and those in the private sector dedicated to partnering with and developing countries and regions in Africa, the net effect of Trump on US Africa matters is deeply negative. He didn’t win any friends in Africa by the above-mentioned disparagement of Africa as a monolithic “shithole”, nor through his spontaneous and otherwise unsubstantiated issuance of orders restricting travel to the United States from several African states beginning in 2017. In a move that drew criticism from many observers (including myself), his administration also withdrew from the Extractive Industries Transparency Initiative (EITI) in 2017, thereby weakening the critical war against corruption in the extractives industries (including especially the hydrocarbons sector). And the shithole reference was troubling beyond its arresting and unpresidential nature: that comment came as a flourish, of sorts, meant to punctuate his view of the unattractiveness of Africans as immigrate to the United States. As retold by an official present at the meeting, Trump would prefer instead emigres from Norway.
All, in all, where the Trump administration is concerned, US Africa relations will likely improve by virtue of Trump’s exit, even as observers seek to retain and expand on the few Trump policies and initiatives which are useful to the relationship. What remains is therefore to see what in particular the Biden Administration portends for the relationship.
How Substantially Better Will US Africa Relations Be Under Biden?
For a host of reasons, including his standing with the African American community, his reputation for stability and reason, and his renown for foreign policy expertise and diplomatic good will, Biden as president is already viewed by Africans and Africanists as an improvement over Trump. Certainly, Biden is expected to strike a different tone. In addition, throughout his presidential campaign, Biden engaged a group of dedicated Africa and foreign policy specialists to help him define and convey a positive and substantive Africa polity. Indeed, the Biden transition team has already pledged to aim for “mutually respectful engagement toward Africa with a bold strategy,” so it seems safe to assume that the new administration will take a much less confrontational approach to Africa, with an important nod to improving trade and diplomacy relationships between the US and African countries.
It is thus at least reassuring that there will be earnest and polite interaction between the US Government and its various bilateral counterparts in Africa. But will politeness good will be enough? Will the Biden administration be willing to work with Africa in ways that are productive and substantive, or will it offer mostly warm regards and rhetoric? In particular, will the new administration craft true partnerships with certain African governments and, importantly, will the Biden administration navigate a path in its Africa policies that advances US goals while acknowledging the unique juxtaposition of Africa’s continued and growing demand for power generation and poverty abatement, on the one hand, while on the other hand it must rely overwhelmingly on extractive resources, including hydrocarbons, to capitalize the installation of power and abatement of poverty.
Africa’s Energy Conundrum
So, looking more granularly at future of US Africa policy on Africa’s economies, what does the impending US presidential transition mean for Africa’s oil and gas sector? By virtue of my role at the African Energy Chamber, I simply have to ask: How will the Biden administration approach African oil and gas? Is it likely to exert itself to strengthen one of the most important pillars of the continent’s economy, or will it focus on other issues? How will it deal with energy poverty issues? Will the US help to fund an energy transition for Africa and brainstorm with leaders in Africa on the balance of optimizing Africa’s extractive resources while likewise planning a sustainable future for Africa and the planet? Or instead, on these thorny issues, will African countries be left to fend for themselves seek partnerships and support on these issues elsewhere? (It is a safe bet that China and Russia and others will be happy if that latter tack is taken.) Though I certainly don’t expect it, a related question should also be asked: Will the Biden Treasury Department continue policies where its default position is to distrust and punish Africa’s governments through sanctions and punitive monetary and banking restrictions, increasing the chances that certain countries will never get the developmental traction to pull itself out of stagnation? Will there be, in particular, an abrupt anti-funding posture towards Africa’s biggest commodity, hydrocarbons? Will the new administration utilize the good will that it will enjoy with Africa upon inauguration and the administration’s agency initiatives to foster stronger private sector alliances between US and African companies? In regards to expanded trade between the African continent and the US, how might the US provide input and partnership with Africa on the development of the proposed African Free Trade Agreement and how might the US Africa Growth and Opportunity Act be improved and strengthened so as to substantially improve direct trade advantages between the US and certain African countries?
Biden administration answers to these and similar questions will have profound influence on the tenor and success of renewed engagement between Africa and the US.
Relationship Between US Africa Policy and US Domestic Priorities, Especially Including Climate Change
First of all, the incoming administration’s top priority is likely to be COVID-19 — and specifically, the domestic implications of the pandemic. For despite the recent roll-out of several types of vaccines, infection rates are rising in the United States — and may continue to do so for some time yet. At the same time, the U.S. economy has not yet regained the momentum it lost in the spring. The outbreak is still causing companies to go out of business and people to lose jobs.
Under these circumstances, it makes sense for Biden to focus on the home front. What that means, though, is that he’ll inevitably devote more attention to the question of how best to compensate for the loss of many thousands of jobs in the U.S. oil and gas sector than to the question of how best to support upstream, midstream, and downstream projects that might create many thousands of jobs in Africa.
In short, the Biden administration is probably not going to make Africa’s oil and gas sector a priority.
But that’s not just because of the pandemic. The second reason why is that Biden has identified climate change as an urgent threat that requires immediate attention. He said so explicitly at a news conference on Dec. 19, as he named his picks for three cabinet-level posts at the Department of Energy (DoE), Department of the Interior (DoI), and the Environmental Protection Agency (EPA).
“Folks, we’re in a crisis,” he declared. “Just like we need to be [a] unified nation that responds to COVID-19, we need a unified national response to climate change. We need to meet the moment with the urgency it demands, as we would during any national emergency.”
Biden also described climate change as “the existential threat of our time.”
These statements are all perfectly in line with the lofty goals outlined on the Biden campaign website. They suggest the incoming U.S. administration will come down decisively on the side of renewable, zero-emissions energy initiatives at the expense of oil and gas. They suggest the Biden team might not provide any backing, financial or otherwise, for projects that aim to help African and international companies turn the continent’s abundant hydrocarbon reserves into fuel for domestic industry. And they suggest Washington might not be overly sympathetic to African countries that are trying to reduce their carbon footprint by expanding the use of natural gas as a fuel for electricity generation.
China’s Role in Africa: Africa Requests the Favor of US Attention and US Business Practices as Alternatives
If a strictly anti-hydrocarbon policy dominates US posture towards African economies, African states are left with little choice but to push back against such cut-and-dried policies which would essentially disregard the continent’s primary source of economic survival. And it may have the clearly unintended consequence of pushing African states deeper into the arms of other geopolitical suitors who acknowledge the unavoidable role that hydrocarbon resources play in Africa’s economy.
That push back will come not just because gas-fired power stations, a creative and growing use of Africa’s abundant hydrocarbon resources, generate less carbon dioxide other petroleum products–while also supplying the electricity that Africans need to improve their own lives and build their own economies—but also because other foreign investors, while not necessarily favored in many countries, in Africa, don’t place the impossible burden on Africa of ignoring its most prevalent source of income . China is chief among the countries sending such alternative investors into Africa.
I’m hardly the first person to notice that Beijing has taken a strong interest in Africa — in its resources, in its strategic locations, in its potential as a market for Chinese goods. And I’m also not the first person to notice that this interest has led multiple African countries to accept loans from China, which does not follow Western creditors’ practices of imposing requirements for transparency and human rights protections. But I want to add my voice to those who have pointed out that Chinese loans may be a net drag on Africa, since they often do little to support local workers or local companies and are so hard to repay that they sometimes leave borrowers with no option but to forfeit control of important assets.
I also want to point out that billions of dollars’ worth of Chinese credits have flowed into Africa’s oil and gas sector — especially in cases where sanctions and other restrictions have limited opportunities for Western investors. Chinese companies have, for example, played the leading role in developing oil fields in Chad, Sudan, and South Sudan. They have also established footholds in key producer states where sanctions are not a consideration — as in Nigeria, where a Chinese company is building the cross-country Ajaokuta-Kaduna-Kano (AKK) gas pipeline.
In short, China is looking to play a significant role in Africa’s oil and gas sector. What’s more, it’s making clear that it’s ready to invest in hydrocarbons even when the United States and other Western countries won’t do so.
Certainly, African countries aren’t going to be turning their back on Chinese investments any time soon – and they shouldn’t. Even so, I’d like the continent’s oil and gas producers to have as many options as possible. As I’ve already said, I’m concerned.
And I think the United States ought to be concerned, too. Partly because China doesn’t always play fair with respect to trade and currency policy. Partly because China doesn’t necessarily share the U.S. government’s stance on transparency and accountability.
The Biden administration will be in a better position to do the watching if it looks for ways to help U.S. businesses compete in the same sectors that China has been targeting in Africa. It therefore ought to give serious consideration to projects that involve hydrocarbons. It should look for ways to provide financing, risk insurance, and other forms of support for African oil and gas initiatives, and it should pursue closer diplomatic and trade ties with African states that don’t fall in line with Beijing’s demands. It could, for example, back the Sudanese interim government’s decision not to renew PetroChina’s contract for Block 6 in the Muglad basin at the end of 2020.
U.S. DFC, Among Certain Other Agencies, Offers Great Potential for Both the U.S. and Africa
The one key initiative taken by the outgoing Administration which can be most useful to the development of an improved US Africa relationship in the coming years is the consolidation and focus of US developmental objectives through the establishment of the US Development Finance Corporation. The substantially increased balance sheet and proactive charter given to the agency can be used to greatly enhance African development initiatives and foster stronger bilateral ties between the US and many African nations. However, as is widely known in Washington, personnel is policy: the use and treatment of this agency and its resources by new Biden administration appointees will go a long way toward defining the tenor and effectiveness of Biden Africa policy. could also make better use of existing institutions — especially the International Development Finance Corporation (DFC).
The Trump administration had a point when it gave the DFC — which is described as the provider of “an economically viable form of private sector-led investment, offering a robust alternative to state-directed investment which often leaves countries saddled with debt”— the task of promoting U.S. trade and economic interests in the face of stiff competition from China.
What’s more, I don’t expect the Biden administration to set DFC aside — at least not initially, while it focuses so closely on the pandemic and climate change. Instead, I expect the incoming team to let the corporation continue along its current course for the time being.
The problem is that DFC’s course doesn’t do much for the oil and gas sector in Africa. The agency has lent its support to several gas-to-power schemes, such as the Central Termica de Temane (CTT) initiative in Mozambique, but it has shown much more interest in renewable energy projects such as solar farms.
This imbalance doesn’t seem to be the product of any institutional biases against fossil fuels. After all, DFC has awarded funding to a number of upstream and midstream projects in the Middle East and Latin America. Nevertheless, there is an imbalance, and African oil and gas producers could try to correct it by asking this U.S. government agency for help in financing oil and gas production, transportation, processing, and distribution initiatives.
If they succeed, they’ll be in a better position to seek alternatives to Chinese creditors as they work to develop some of their most valuable natural resources. And along the way, they’ll also extract more of the fuels they need to produce more electricity, support local industries, and raise their earnings.
*Mr. Kearney collaborated on this article with NJ Ayuk, Executive Chairman of the African Energy Chamber and CEO of Centurion Law Group
A Few Thoughts for this Generation of Africans in 2021: Be Bold and Cut Out Entitlement, No One Owes Us Anything
December 28, 2020 | 0 Comments
In 2021, African gas projects are going to be in the news
By NJ Ayuk*
In 2021 most opportunities in the energy sector and in business in general will go to those who show up and negotiate better deals and get involved in making African resources work for us. Forget handouts, foreign aid and government handouts.
As I wrote in the second edition of Billions at Play: The Future of African Energy and Doing Deals, in 2021, young African dealmakers, negotiators and lawyers will have to embrace a new mindset to win. They will have to mobilize their resources and advocate for important principles of personal responsibility, smaller government, lower taxes, free markets, personal liberty, and the rule of law.
In 2021, African gas projects are going to be in the news. Companies will push to get them going, from Mozambique to Nigeria and from Equatorial Guinea to Tanzania.
If some extremists have their way, none of these projects should happen and our people should be left in the dark. Question we must also ask is how Africans are going to participate when it comes to jobs and contracts. In 2021, we cannot be bystanders. We all can’t afford to.
Africa’s economic recovery from Covid-19 and our global significance in the era of energy transition and attacks on our energy sector must be driven by the talent and entrepreneurship of its people.
Our continent is still struggling when it comes to establishing democratic and trade institutions, we must push for more democracy. Democracy isn’t perfect but it is the best of all political practices and we must embrace it.
I have a few words of advice for this generation, for Africa’s young attorneys, entrepreneurs, rising stars and dealmakers:
Never lose sight of the significance of your work.
By negotiating effectively for African businesses and governments, you can play a huge role in transforming the lives of hundreds of thousands of Africans. Few things in life are more satisfying.
I am proud of the law group I have built, but I consider the work I have done to get justice for and empower African individuals, businesses, and communities among my greatest successes.
I am the first to advise many young people to avoid feeling entitled to anything. No one owes you or us anything. We have to earn it. Our approach and success in oil and gas negotiations stem from our deep preparation and mindset. More of that is needed in 2021.
I have stated many times: you succeed when you look for mentors and let them mentor you. It’s important to have someone who is promoting you when you are not in the room. Next, be stubbornly loyal. Don’t try to pull a fast one because you know more than others! Further, embrace your trials and shortcomings for they teach you to be a better person and lawyer.
I have seen too many young lawyers or rising stars who get a chance to be on a podium, and then tend to spend more time being celebrities than being around colleagues or supervisors.
Many so-called celebrities have not earned a deal and completed one, so avoid having a big head. For me if you have not closed a deal and are not making money, you need to keep your philosophies to yourself. It is crucial to have a strong focus on building your skills because clients and business partners really want you to be good at what you do. Your writing, critical thinking, commercial mindset and in-depth industry skills cannot hurt you. Most clients want to know who is working on their deals, and they do not care about your race or nationality. They want to know you are qualified and can get the job done.
When you finally get a deal done and you get your first bonus or check, do not fall in the trap of buying that fancy car or getting into fast life. You will get broke so quickly. Spend wisely even when you think you have arrived where you need to be. Always think there is more and stay hungry. Look at the Texas oil boys, they are always hungry. They wear their cowboy boots and continue searching for the next big discovery.
Hashtags do not pay the bills. Get off your phone.
Get offline, social media is nice but it isn’t everything, we have seen people who prefer to seat on their phone even during business meetings rather than engage on real business. How do want a deal when you are busy on your whatsapp group chats? Why have a meeting with someone when you will be on your phone while they are talking? Get out of the room and take the call or send a message. If you decide to work on your Instagram while talking to me, I walk you out of my office or end the meeting. When you don’t get the job or the contract, don’t be so quick on blaming the “White Man” or Racism.
I know this will get the young generation annoyed, but its real. We need to start having a post covid mindset and know we will have to engage again. I am not crazy about Zoom meetings, but we have to do it. Business is not about who had the best tweet two hours ago or who does the best hooting and hollering. Get down on the ground and make money. Do not believe those who tell you money is bad. We know it is bad being broke and we hate being broke. You should never apologise for working hard and making money. To do that, you must be focused and yes, get off your phone.
Commit to work. Pay your dues. Your time to shine will come.
Always ask yourself, “Am I adding value to the firm or the company?” Don’t think you are in the firm to be the labor union representative or the head of diversity.
Do not walk around the firm or even a negotiation with arrogance or give off a sense that you are entitled, or that your opinion matters on every subject. You are not owed anything. It is important not to cry over discrimination on every issue, whether it is sexism, racism, or xenophobia.
You beat them with excellence and success. We see it every day and you will be surprised it comes from the same liberals who claim to love all humans and want to save the world. They will love to patronize you and put you in your place. I have experienced it myself. I just work harder, and success follows.
You must understand that building a successful practice or business calls for something not taught in law school or business school or any school: the ability to hustle and deliver on deals. I have always had run-ins with young lawyers because I can be a tough, goal-oriented taskmaster. I have a fierce sense of urgency that many others don’t share.
Working for Centurion is not for the naïve or the fainthearted—we don’t tolerate young lawyers viewing Centurion as merely a job. Everyone has to give their maximum effort all the time.
The truth is, I am harder on myself. I am never satisfied, and I just believe I can win bigger and do the deal better. The most important outcome for me is to have people around me achieve more than they ever thought they could.
Lean in and take the heat for your client or causes you believe in, and for Africa
In 2021, you will have to visible, be vocal in defending the African energy sector from those that want to end it and you must capitalize on the opportunities that you see. One of the key things you must do in 2021, is take the heat for your clients. I have never had a problem being called an ambulance-chaser in the past. Today I am that ambulance that is being chased and many know i will always stand with them and I built a strategy of taking the heat for them. Don’t let them push on your client or kill your issue. Develop a thick skin and let them hit you. If I can’t take the heat, I have no business being in the kitchen.
I have been pushed, been kicked, sometimes been spat on, lied on, demonized, talked about and even derided in the media. Its does not bother me one bit, I always know I am going to outlast my distractors or competition. In 2020, we made more money than any other year with Centurion Plus, our latest on-demand service. I have also been invited to meet with Presidents, Ministers, CEO’s and even Royals. But I never lost my way.
Never take your eyes off the prize. Be patient, play chess, keep smiling, be ready to take a punch and definitely hit back and do it harder. Maybe a combination of Jabs, Uppercuts and Hooks. That’s going to be you in 2021. Its going to be a fight to stay alive, stay employed, stay in business, stay relevant and stay sane when everything and everyone around you is going crazy.
You are going to be tested. They are going to come after you. sometimes even your own friends and those who laugh with you then stab you in the back. You will be called a traitor to most of your liberal elitist friends who feel entitled, drink latte with soy or almond milk. They sometimes cannot believe that this kid who was their darling and their best boo does not buy into their tree hugging, cry me a river ideology. You and I will have to believe and fight for Africa first, against energy poverty, and for personal responsibility, free markets, limited government and yes we must not be ashamed of being people of faith.
The wisdom and advice my law school mentor and professor John Radsan, who used to serve as the CIA’s assistant general counsel and Ron Walters shared with me hold true for you today: each one of us has a mandate to use our education and skills to impact communities and to promote economic growth and empowerment.
So, yes, seek career success and prosperity in 2021. But, in the end, choose to do good: use your skills to make sure that everyday Africans receive their fair share of the benefits the continent’s natural resources can provide.
*NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including ‘Billions at Play: The Future of African Energy and Doing Deals.’
Pipeline enthusiasm to drive investments worth several billion USD into Niger
December 9, 2020 | 0 Comments
|The pipeline has therefore become a symbol of hope, upon which several major development projects depend.|
Niger’s Secretary General in the ministry of Energy, Balla Mahaman Rabiou announced during a working visit of the African Energy Chamber to Niger, that his country had concluded preliminary studies for the implementation of power projects worth hundreds of millions of dollars nationwide. According to Rabiou, the government has embarked on an aggressive plan, to increase access to power for its predominantly youthful population from currently over 16% to 80% by 2035. Of particular focus, are Niger’s rural areas which have power access levels of less than 5%. Many of the power projects envisaged, are expected to be solar mini-grids, taking advantage of Niger’s abundance of sunlight throughout the year. The recently created Agency for the promotion of rural electrification is at the forefront of this effort.
During its working visit to Niger, (23 – 27 November), the African Energy Chamber pledged to support the government’s initiatives to attract much needed investment into the country. “Niger has embarked on a path we passionately support, to drastically increase access to reliable and affordable electricity for its youthful population” said Verner Ayukegba, Senior VP with the African Energy Chamber. This will not only increase the living conditions of the population, but will also form the basis for increased mechanisation and industrialisation in other sectors such as mining and agriculture. The most important effect of this increase in access to energy will be a steep rise in the availability of Jobs in the country.
There has always been a drive to increase access in Electricity in Niger, supported by donor partners like Power Africa, USAID and the European Union. However, the government’s new plans rely significantly on its own revenues, expected from increased oil production in Niger. Production is scheduled to increase from currently 20,000 barrels per day currently to 120,000 in 2024. This increase shall be made possible, with the completion of the 1950Km Niger-Benin oil pipeline to be built by the China National Petroleum Corporation (CNPC). The pipeline will transport crude to the global markets via the port of Seme in Benin from Niger’s prolific Agadem basin. The pipeline has therefore become a symbol of hope, upon which several major development projects depend. Growth rates overall in Niger are expected to reach double digits, for the decade after the completion of the pipeline in 2024.
Following Petroleum Minister Foumakoye Gado’s role in securing the construction of the all-important pipeline, he was named by the African Energy Chamber as one of the top 25 leaders in the African Energy Sector to watch. Minister Gado’s success in facilitating the deal has significantly de-risked exploration in Niger in particular and the Sahel in general.
The pipeline also symbolises the likelihood of even greater exploration in Niger. British minor, Savannah Energy is leading the way with 5 discoveries from 5 exploration wells drilled and a combined estimate of 6.7 billion barrels of oil Initially in Place in its two licenses. Several other companies are currently negotiating with the government to secure exploration licenses in Niger. Niger’s success is being closely watched by oil companies who in the past have paid less attention to the search for hydrocarbons in the Sahel. This is likely to change, with the successful completion of the pipeline.
Bilateral discussions between the Chamber and several other notable institutions in Niger, revealed a flurry of activities, that will turn Niger into a destination for major investments into the mining and energy sectors especially. The National Oil Company, SONIDEP, which was initially focused solely on the distribution of petroleum products, is now concluding a reorganisation with the mandate to ramp up its activities in the upstream and midstream sectors. SONIDEP is negotiating the obtention of exploration licenses, which it intends to develop, together with experienced technical partners. Similarly, the state mining holding company SOPAMIN is also benefiting from the increased investment projections around Niger, with renewed interest from investors into Niger’s prolific mining sector. The company is currently evaluating several new mining project proposals worth hundreds of Millions of dollars.
Politically, Niger is one of Africa’s most stable democracies, giving more confidence to investors as to the safety of their investments. A further successful transfer of power in April next year, from current President, H.E Mahamadou Issoufou to an elected successor will only help to increase Niger’s attractiveness to investors.
*SOURCE African Energy Chamber
African Energy Chamber Starts a Working Visit to Mozambique to Push for Natural Gas Adoption and Jobs Creation
December 3, 2020 | 0 Comments
The Chamber will be advocating for sound local content policies and development and a broader push for gas monetisation in order to fight energy poverty and create jobs.
The African Energy Chamber is in Mozambique this week on a working visit to meet with the country’s government authorities, representatives of the oil sector and local entrepreneurs and services providers. The Chamber will be advocating for sound local content policies and development and a broader push for gas monetisation in order to fight energy poverty and create jobs.
With the revised development plan for the Temane PSA now approved, and as Eni’s 3.4 mtpa Coral South FLNG and Total’s 12.88 mtpa Mozambique LNG projects move forward, Mozambique is set to become an African gas leader. While Mozambican gas exports are expected to benefit more than just South Africa moving forward, the monetisation of its gas at home is also set to unlock tremendous local value for Mozambicans.
The Chamber continues to firmly believe that gas monetisation stands to change the economic outlook of Mozambique and its people. Natural gas remains the best hope the country has to fight energy poverty, improve security and offer opportunities to young Mozambican women and men.
“The Chamber salute H.E. Filipe Nyusi, President of Mozambique, for providing an enabling environment for gas investors to make a play in Mozambique. The country has a unique opportunity to set new standards for the way Africans develop and monetise natural gas, and the Chamber will be once again expressing its support to all stakeholders for making this ambition a reality in the near future,” declared Nj Ayuk, Executive Chairman at the African Energy Chamber.
*SOURCE African Energy Chamber
African Energy Chamber projects Africa’s Power Demand to Keep Rising Between 4-5% per year
December 2, 2020 | 0 Comments
The African Energy Chamber forecasts that 2021 generation is likely to range between 870-900 TWh if demand picks up aggressively throughout the year.
Africa’s electricity generation capacity has grown at an average of 4.8 percent per annum since 2008; The Chamber remains determined in its commitment to seek a fair and just resolution that puts forth the interests of African people, businesses, investors and economic growth; This is an excerpt taken from the Africa Energy Outlook 2021. Get your free copy today on www.EnergyChamber.org.
Total electricity generation in Africa stood at 870 terawatt-hours (TWh) in 2019, an increase of 2.9 percent from 846 TWh in 2018. Africa’s electricity generation capacity has grown at an average of 4.8 percent per annum since 2008, compared to 2.7 percent globally. Nonetheless, Africa’s share of global electricity generation has been around 3 percent since 2000.
The African Energy Chamber forecasts that 2021 generation is likely to range between 870-900 TWh if demand picks up aggressively throughout the year following the gradual removal of COVID-19 lockdown restrictions and economies opening more fully to international trade. Our base case forecast using a conservative 4.5 percent yearly growth (current stated policies) shows that electricity generation on the continent will increase by 25 percent, 55 percent and 141 percent of 2020 baseline levels to reach 1,057, 1,138 and 2,047 TWh by 2025, 2035 and 2040 respectively. This increases to 1,520 in 2030 and 2,700 TWh in 2040 in a more aggressive push to expand capacity at 6 percent per annum.
The latter assessment is premised on Africa aggressively pushing to expand electricity supply and modern energy services within the framework of the Africa Agenda 2063 on energy and infrastructure development. This will ensure that generation expansion will outpace population growth on the continent (Africa will have 1.8 and 2.45 billion people by 2040 and 2050).
Regarding the supply mix, natural gas (39 percent) constitutes the largest element in Africa’s electricity generation mix, followed by coal (29 percent), hydro (15 percent) and oil (10 percent).
While nuclear energy accounted for another 2 percent, the share of renewables (RE) in Africa’s generation mix is growing, albeit at a lower pace than in other regions (5 percent). Most of the RE growth comes from solar, wind and geothermal power plants, and this expected to continue into 2030. Africa generated 830 megawatts (MW), 5,748 MW and 7,236 MW of geothermal, wind and solar installed capacity in 2019, signifying growth rates of 17.4 percent, 26.1 percent and 60.2 percent respectively since 2010.
Nonetheless, most of these RE developments on the continent are limited primarily to Northern (Morocco, Egypt) and South-Eastern Africa (South Africa, Kenya). Given the declining costs of key RE technologies along with rising concerns over CO2 emissions, the level of renewables deployment, particularly solar and wind energy is expected to increase by 1.5 percent annually over the next decade to 2030.
Regarding sectoral electricity consumption, the industrial sector remains the continent’s largest user (41 percent) followed by residential (33 percent), commercial and public services (18 percent) and agriculture (4 percent). Transport consumes a small proportion (approximately 1 percent) while the remaining 3 percent was accounted for by other sectors.
At a sub-regional level, North Africa and South Africa account for more than 70 percent of Africa’s electricity demand.
This is an excerpt taken from the Africa Energy Outlook 2021. Get your free copy today on www.EnergyChamber.org. Engage with us on our social media using #ChamberNews #ChamberEnergy Outlook.
*SOURCE African Energy Chamber
African Businesses and Officials Demand Justice Against Disgraced Spanish Police Commissioner José Villarejo and Diario Rombe Founder Delfin Mocache Massoko
December 1, 2020 | 0 Comments
|According to a Spanish government indictment, Villarejo received money and worked with Massoko to discredit African businesses and politicians.|
Former Spanish Police Commissioner José Villarejo and Delfin Mocache Massoko, who manages Equatorial Guinea’s digital newspaper Diario Rombe, will be sued and brought to justice. According to a Spanish government indictment, Villarejo received money and worked with Massoko to discredit African businesses and politicians, using privileged information to sell and extort customers and conduct illegal spying activities.
Over the past few years, individuals tied to Diario Rombe have indeed been trying to extort companies and public officials, and threatened to inflict substantial financial and reputational harm on them if their demands were not met. These are serious offences that should no longer go unpunished. As the affairs grows, it is becoming clear that not only did José Villarejo receive USD 5 million in exchange for working with other already disgraced individuals to discredit African companies and officials, but also kept making false public statements alleging wrongdoing from them.
This is a case where a corrupt police officer teamed up with unethical Equatorial Guinea blogger to blow well past the line of aggressive advocacy, and crossing into the territory of illegal extortion and spying in an attempt to enrich himself and his companions by extracting millions of dollars from African businesses and government officials.
Consequently, a criminal and civil complaint is currently being pursued by Centurion Law Group on behalf of the victims. This criminal and civil complaint demonstrates the continuous commitment to unmasking malicious actors behind some of the most egregious attacks on black businesses and everyday Africans. The fight against corruption and mismanagement should be aggressive and we must work together to get results.
The consequences of Delfin Mocache Massoko and Villarejo’s actions are far reaching, affecting not only individuals, but also entire African economies trying to recover from Covid-19 and economic slowdowns. Engaging in abuse of power for extortion purposes is a dangerous and illegal game and African executives and officials are now ready to stand up for their rights. Those found guilty will be held accountable for their actions, and Centurion Law Group intends to continue working with the Spanish authorities and other relevant jurisdictions to vigorously seek justice.
By calling out and seeking justice against those who threaten hardworking Africans, we expose criminals who hide behind their computer and blogs and launch attacks that threaten our public safety, our businesses, our jobs and our ability to get Africans out of poverty. Our firm, with other law firms in Spain, Europe and the United States and with the assistance of Spanish and European authorities, is sending a strong message that we will work together to investigate and hold these criminals accountable.
*SOURCE Centurion Law Group