- My colleagues members of the press
- I should like to welcome you all to this press conference organized by the African Petroleum Producers’ Organization, APPO, where I work as the Secretary General.
- For those of you who may not be very familiar with APPO, it is an Intergovernmental Energy Organization, established in 1987, in Lagos, Nigeria, as the Africa Petroleum Producers’ Association, APPA, by 8 oil and gas producing African countries. It has its headquarters in Brazzaville, Republic of Congo.
- At establishment, APPA had a modest objective, namely “to provide a platform for fostering consultation and cooperation among African petroleum producing countries in the areas of hydrocarbon resources development.’’
- Between 1987 and 2015, APPA’s Membership grew from 8 to 15. The Association conducted a number of studies individually and sometimes in collaboration with African regional groups like the ECOWAS.
- While APPA recorded success at cooperation and collaboration at policy level amongst its Member Countries, the same could not be said at policy implementation or petroleum operations level. Our Member Countries’ National Oil and Gas Companies continued to operate in silos, relating more with International Oil and Service Companies outside of the African continent.
- All that was to change from 2015 in response to the global paradigm shift away from fossil fuels to renewable energies, euphemistically called the energy transition.
- ‘In 2015, the Ministerial Council of APPA directed that a major reform of APPA be undertaken to prepare it to address the challenges that the energy transition shall pose to APPA Member Countries, who are also signatories to the Paris Climate Agreement.
- It is important to highlight the fact that a number of APPA Member Countries had, with the discovery of oil and gas in their territories, gradually abandoned the mainstays of their national economies and had become heavily dependent on revenue from the export of oil and gas.
- For many countries, oil and gas revenue constituted a vast majority of government revenue.
- The reform was completed in 2019. The name APPA was changed to APPO to reflect the commitment of Member Countries to working more closely together, and abandoning the silo mentality that had characterized the mentality of our oil and gas operators. Similarly the aims and objectives were reviewed and new organizational structures were introduced.
- In recognition of the key roles that National Oil Companies play in the development of the industry on the continent, the Ministerial Council approved the establishment of a Forum of Chief Executive Officers of APPO Member Countries’ NOCs.
- And I am pleased to say that this Forum has been one of the most active since it was inaugurated in Luanda in May 2022. Since then APPO NOC CEOs have met 4 times. Twice in Luanda, once in Abuja and once in Algiers. The attendance at CEO level has been most amazing, with 14 out of the 18 CEOs attending the Algiers meeting in person, 2 were represented by their deputies and while two were unavoidably absent due to flight challenges.
- Since the completion of the reform APPO’s membership has been growing. Last year alone, APPO added three new members, taking our total membership to 18. These are : Algeria, Angola, Benin, Cameroun, Chad, Congo Republic, Democratic Republic of Congo, Egypt, Equatorial Guinea, Gabon, Ghana, Ivory Coast, Libya, Namibia, Niger, Nigeria, Senegal and South Africa. Venezuela is an honorary member.
- One of the first assignments given to the APPO Secretariat after the reform was to conduct a study on the future of the oil and gas industry in Africa in the light of the energy transition. The findings of that study have continued to shape APPO’s strategy.
- The study found out that the global pursuit of energy transition pose 4 imminent challenges to African oil and gas producing and dependent countries. These imminent challenges are :
- Funding Challenge:
- Technology and Expertise challenge:
- Markets and Energy Infrastructure challenge
- APPO has, since the completion of the study, and its review by the APPO Long Term Strategy Committee, and the approval of the recommendations of the Committee by the APPO Ministerial Council, been diligently pursuing the practical recommendations to ensure that our Member Countries are not forced to declare the over 125 billion barrels of proven oil and 650 trillion cubic feet of gas reserves as stranded assets, when our continent has the largest proportion of the world’s population living in energy poverty.
- Africa, as most of you know has over 900 million of its 1.4 billion people living without access to any form of modern energy for cooking or domestic heating. These people use wood, sticks, cow dung and other unhealthy sources of energy to cook and heat their homes, causing millions of deaths from respiratory illnesses especially among infants, children and the aged. As for electricity, which the developed world has come to take for granted, over 600 million Africans do have access to it.
- It is these realities that informed the position of Africa on the energy transition.
- While climate activists have tried to encourage all countries, irrespective of the level of their socio-economic development to aggressively pursue net-zero, by proposing to provide financial support in the form of climate funds, the history of these countries redemption of previous commitments has left Africa doubtful if this time, things are going to be different.
- Moreover, there is a growing realization on the African continent that the solution to Africa’s problems should come from Africa, not our continuous dependence on some external powers.
- Coming back to the practical steps that APPO is taken to address the identified imminent challenges that Africa faces from the successful pursuit of the energy transition, APPO is actively pursuing the following initiatives:
- To address the funding challenge, APPO and Afreximbank have reached an advanced stage in the preparations to establish the Africa Energy Bank. The AEB shall be an independent supra-national financial institution whose main objective is to close the gap resulting from the decision of Western financiers of the industry to discontinue funding the industry, especially in Africa. The bank shall be open to all investors who share our vision that Africa shall need to use all forms of available energy for the fore-seeable future in order to eliminate the huge poverty on the continent. That is not to say that AEB shall not look into other energies.
- To address the technology and expertise challenge, a team from the Secretariat undertook an assessment tour of oil and gas research, development, innovation and training institutions in APPO Member countries, with a view to establishing the professional level of these institutions. We were pleasantly surprised at the level of advancement of many of the institutions visited, in terms of their training programs, facilities and equipment as well as faculties.
- We concluded that given the huge financial requirements for establishing high class oil and gas research and training institutions, APPO Member Countries need not all establish these institutions. Instead, each country can establish institutions for training oil and gas technicians and well as middle level personnel. For the highly skilled sectors, we plan to have regional centers of excellence in the various sectors of the industry. In this regard, Sonatrach, the National Oil Company of Algeria hosted the inaugural meeting of Directors of Oil and Gas Research and Training Institutions last June, in Bourmedes, Algeria.
- Nigeria is hosting the 2nd Africa Roundtable on Local Content next month while Angola has indicated interest to host the next one in the first quarter of 2024.
- In pursuing this objective, we believe that partnership with players from the technological countries will be fruitful. The oil and gas industry in Canada is one place that we believe we can come to for technological support. Partnership is critical to our success and we are prepared to partner with all like-minded institutions to pursue our objectives.
- On the final challenge, namely the challenge of markets and energy infrastructure, APPO is working on producing a blue print for the integration of the African continent by establishing cross border energy infrastructure. Unfortunately, most the energy infrastructure that exists on the continent today, were established to serve extra-Africa interests. That is why our pipelines run from the fields to the sea ports for export. The time has come for us to route these pipelines from areas of plenty to areas of need within Africa.
- For too long we have been told that Africans do not have purchasing power, so our energy needs external markets. But we all know that energy is the biggest catalyst to economic development. So, if the people cannot access energy because they do not have the purchasing power, when will they ever get out of poverty.
- In APPO, we believe that that poverty cycle cannot be broken if we continue believing on this received wisdom. Deliberate policies must be created to make our people have access to energy and with that, the poverty cycle shall be broken. Give the people energy not just to light their homes but to do cottage industries and you will be shocked at the quantum leap in the national Gross Domestic Products.
- Before I conclude, I should like to emphasize that APPO does not contest the science of climate change. Nor are we against energy transition. What we are saying is that giving our peculiar situation in terms of socio-economic development, and the fact that the problems of climate change were caused, not by us but by the economically advanced countries of the world, using fossil fuels, calling us to join the same speedy train to net-zero is unfair and punitive.
- I thank you for your kind attention.
Omar Farouk Ibrahim, PhD
Secretary General
African Petroleum Producers’ Organization, APPO
Brazzaville, Rep of Congo
Monday 18 September 2023