….As Nigerian Government Calls For Continental Collaboration In Oil & Gas Projects Financing Following Exit Of Major Multinational Oil Companies
Governments across Africa have been urged to come together and fashion out reliable funding alternatives for their oil and gas projects as major international oil companies exit the continent in agreement with the decision of their various countries to completely move away from fossil fuel.
The Minister of State for Petroleum Resources, Chief Timipre Sylva made the call at the maiden edition of African Local Content Investment Forum in Lagos.
The forum which was organised by the Nigerian Content Development and Monitoring Board (NCDMB) had the theme, ” Pan-African strategy towards sustainable funding of Africa oil and gas projects”
Chief Timipre Sylva who was represented by the Permanent Secretary in the ministry, Dr. Nasiru Gwarzo noted that the Lagos event was a follow-up to a roundtable held last year in Yenogoa, Bayelsa State.
He said the roundtable was on evolving alternative funding for oil and gas projects in Africa towards securing the energy future of the continent, accelerating job creation and fostering people’s wellbeing.
Chief Sylva said African nations must act fast to bridge the gap created by the exit of major international oil companies.
The Minister identified some of the ways to abridge the gap to include, addressing dearth in projects funding, building indigenous manpower and development of market for petroleum products from the continent.
Chief sylva underlined that while Africa is not entirely against transition to cleaner energy sources as being preached by environmental advocates and climate change experts, there was need for the continent to maximally develop its vast hydrocarbon reserve to enable a smooth transition.
In his words, “
“It is a great pleasure that in less than one year, we have gathered here to discuss the major outcomes of the African Local Content Roundtable held in Yenogoa Bayelsa State. It is centered around sustainable funding of the African oil and gas Industry.
” The theme of this forum “evolving a Pan-African strategy towards sustainable funding of Africa oil and gas projects” as it demonstrates our commitment as a community to redefine funding hydrocarbon development for the economic growth, job creation, technology development and energy security.
“The AFREXIMBANK has been engaged and the bank has already conveyed its full commitment to the objectives of the board as evidenced by their presence here and all the projects enumerated by the representative of the bank.
“No doubt, the emerging trend where leading multinational oil companies have factored environmental, social and corporate governance issues on their decisions and their seeming withdrawal, is a wake up call for Africa to provide alternative funding and I stress alternative funding to sustain hydrocarbon development and secure our energy future.
“In December 2021, the council of the African Petroleum Producers Association met and approved the implication of a study conducted on the future of oil and gas industry in the light of the energy transition. It is good that they met to deliberate on the study done. It is not just to come up with an idea, there was a finding behind it to guide their decision.
“What are the findings of their decision? Africa has over 120 billion barrels of proven crude oil and about 600 trillion cubic ft of proven gas reserve.
“That the council of APPO member countries are heavily dependent on oil and gas revenue to meet their socioeconomic needs, is a reality.
“For Africa to attain energy security and ensure value addition, it must address the following;
- financing of oil and gas sector projects, limitation in technology, skill gap, inadequate energy Infrastructures and over dependence on sale of crude oil for foreign exchange and budget”.
Contributing, the Secretary General , African Petroleum Producers’ Organisation, APPO, Dr. Omar Farouk, sounded it loud and clear that Africa was not contesting the position of scientists as regards impact of fosil fuel on the environment, but that under the present circumstance , it must prioritize the wellbeing of it’s people.
To that effect, Dr. Farouk said it was a better decision for the continent to fully develop its vast hydrocarbon reserves to tackle energy problem affecting the majority of Africans, rather than abandoning the abundant crude oil for non-fossil energy sources that it presently lacked adequate capacity for their development.
The APPO Secretary General stated that it was a matter of national security and interest for Africa not to abandon its huge petroleum deposits, adding that it is going to be a gradual process.
He warned that Africans should realise that their salvation lies in their hands.
On his part, the Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB , Mr. Simbi Wabote stressed on the need for all oil producing countries in African to team up in coming up with a framework that enables the creation of a pull of fund for sponsoring key projects in the petroleum industry.
Mr. Wabote pointed out that about 600 million Africans representing more than half of the population have no access to modern energy, saying the problem must be fixed immediately to enable the continent progress.
So many speakers suggested that as part of strategies to fund oil and gas projects within Africa in the absence of international oil companies, Oil producing nations in the continent should implement a policy that mandates their governments to set aside certain percentage of the profits from petroleum for developing the industry.
They also called on financial institutions across the continent to make funding of oil and gas projects their priority.
The event was attended by delegates from at least 18 Countries and 140 financial institutions in the African continent as well as representatives of ECOWAS, AFCFTA, among others.