As the global push for energy transition away from fossil fuels gather momentum, the African Petroleum Organization (APPO) has re-emphasised the need for the continent to develop the market for it’s oil and gas resources in order to address the prevalent energy poverty
APPO secretary general, Omar Farouk Ibrahim, said the future of the African petroleum industry lies in the hands of Africans and so must develop its own market.
Speaking at the just concluded Nigeria International Energy Summit (NIES) in Abuja, Ibrahim said, the global paradigm shift away from fossil fuels to renewable energies which began from the last quarter of the last century and gathered greatest momentum at the Paris Climate agreement of 2015 sent the red signal to other members whose governments are dependent on petroleum revenue to meet the basic obligations of the state that the industry on which they depended is threatened.
“On the challenge of markets, for our oil and gas., we believe that the coming into effect of, AFCFTA. provides an excellent opportunity to work on developing cross-border and interregional energy infrastructure.”
“We believe that with the level of energy poverty in Africa. We can use up all the energy we can produce and still need more.”
“We are promoting the development of cross-border, regional infrastructure. We see this as critical to making energy accessible to our people.
“We want to banish the mindset that our people are too poor to buy energy. So we have to look for those with the purchasing power to buy our energy.
“That mindset entrenches the poverty cycle in Africa. We have to break that cycle by empowering the people to have access to energy. with which their productivity will increase manifold, and with it, the growth of the national economies, of our continent.
He revealed that the organization will soon launch its African Energy Bank.
According to him, the organization is partnering the Afrexim bank to establish the energy bank.
He noted that there are indications that international oil companies will dump the continent’s oil and gas as soon as they find alternatives.
He said: “For those who have in the last 75 years or so provided the finance and technology in the market will dump us as soon as they can find alternatives. And they are working hard to find those alternatives.
“What is APPO doing about this? For the funding of oil and gas projects across the continent we gone into partnership with the Africa exim bank (Afrexim) to establish the African Energy Bank. “Its primary objective is to finance oil and gas projects in the continents.”
Ibrahim said for several decades that Africa has been producing petroleum it has relied essentially on external financing for its projects.
The second challenge, said the APPO boss, is technology and expertise.
He added that Africa has proven reserves in 100 of thousands of billion barrels and trillions of Standard Cubic Feet of oil and gas respectively, stressing it has always depended on foreign technology and to some extent, expertise to produce the resource.
Continuing, he said: “The final challenge is that Africa has not been able to develop market for its resources as it is always relying on foreign market. These challenges have been the focus of APPO in the last three years.
“We have come to the conclusion that the future of the African Petroleum industry lies in the hands of Africans.”
According to him, negotiations on the charter, establishment agreements and governance of the bank’s projects have reached advance stage.
“Very soon a decision will be taken on where to locate the headquarters of the bank and set a date for its take off.
“It is important I mention that given African’s experience with other institutions we are making sure that APPO member countries interests are always protected.
“Shareholding shall be opened to all African oil companies and their national companies as well as other investors.
“Their banks shall work out participation of LOC outside Africa. “But no sovereign outside if the African continent or any investor outside of Africa shall be allowed to participate who has no shared our vision of the bank,” he said.
