Your Excellency Salva Kiir Mayardit, President of the Republic of South Sudan, Excellencies Ministers of APPO Member Countries here present, Excellency Puot Kang Chol, Minister of Petroleum of the Republic of South Sudan, Excellencies Ministers and Ambassadors, the indefatigable champion of the African energy voice, Mr. NJ Ayuk, Mr. Zakaria Dosso of the AEICorp, captains of the industry, Energy Capital and Power, the organizers of this conference, all sponsors of and exhibitors at South Sudan Oil and Power 2023, ladies and gentlemen.
I should like to thank Minister Puot Kang Chol for the invitation extended to the African Petroleum Producers’ Organization, APPO, to deliver a Keynote Address at this 6th edition of the South Sudan Oil and Power Conference.
In the invitation to me, Minister Chol described the South Sudan Oil and Power Conference as playing a central role in the national effort to build international partnerships, attracting investment and technology and improving the performance of the South Sudan energy sector as well as the East African region more broadly. These, no doubt, are laudable objectives which every patriotic South Sudanese and lovers of South Sudan should gladly support. And now more than ever, South Sudan needs to attract investments, develop local content in oil and gas technology and expertise and find lasting markets for its oil and gas.
Excellencies, these objectives that the Republic of South Sudan is pursuing largely alone are what APPO Member Countries have come together to pursue collectively. And as the African adage goes, if you want to go fast go alone, but if you want to go far, then go with others. That first option, of going alone, has been foreclosed for African oil and gas producing countries by the energy transition. I will come to this later.
In the meantime, permit me to say a bit about the Organization I represent, the African Petroleum Producers’ Organization, APPO. Founded as the African Petroleum Producers’ Association, APPA, in 1987 by eight oil and gas producing African countries, with the modest objective of providing a forum for “fostering consultation and cooperation among African petroleum producing countries in the areas of development of hydrocarbon resources,’’ the association underwent major reforms between 2015 and 2019, in response to the global paradigm shift away from fossil fuels to renewable energies, euphemistically called the energy transition.
The unanimous adoption, by APPA Member Countries, of the reform program which consisted of fundamental changes to the mission and vision of the Association as well as the organizational, policy and key decision making structures and processes signaled the beginning of a break from the silo mentality that had characterized the relationship of industry players in APPA countries. For the first time, APPO Member Countries were ready to abandon their earlier position as a loose association of oil and gas producing countries primarily for consultation on hydrocarbon matters in favor of an Organization that sees greater partnership, cooperation and collaboration, not only in policy matters but also in oil and gas operations as the solution to the imminent challenges that the global energy transition poses to their individual and collective interests, and by implication, the interest of the African continent.
Also for the first time in the over three decades history of the Organization, a forum of the CEOs of APPO NOCs was recognized in the structure of APPO. I am pleased to say that this forum of APPO NOC CEOs has been the most active body of the organization, having met four times in the last one year. The Forum has been hosted twice by Sonangol of Angola, once by the NNPC of Nigeria and the last edition held in March this year was hosted by Sonatrach of Algeria.
In addition, a Long Term Strategy Committee was established to constantly review developments in the global energy industry and reshape APPO’s position in order to continue to be relevant in the scheme of things.
In recognition of the critical role that legal and regulatory regimes play in the oil and gas value chain, a Forum of Member Countries’ Oil and Gas Legal Experts has also been formed.
Meanwhile, membership of the Organization grew from strength to strength. By the end of the reform in 2019, APPA had grown from eight to 15 Member Countries. Last year alone, APPO added three additional members making a total of 18 full Member Countries with one Observer, the Bolivarian Republic of Venezuela.
These developments are testimony to the increasing realization by African oil and gas producing and potential producing countries that the solution to the imminent challenges that the energy transition poses to the African oil and gas industry lies not in continuing to do more of what we have been doing since independence, admittedly with some minor adjustments, but in developing a different mind-set, a mind-set that critically questions the givens that we have grown to accept. For example, we are conditioned to believe that we have been blessed with raw resources while others have been blessed with the technology for finding, producing and refining the resources as well as providing the capital for transforming the raw materials that we have into usable products. In other words, we have been conditioned to believe that we cannot benefit from our God-endowed resources without depending on others for their technology and their capital.
Lest we are misunderstood. We are not against economic partnership. But no partnership should assign Africa to a permanent position of raw materials providers while others are the providers of technology, finance and markets. Unfortunately, our oil and gas partnerships since many of our countries found oil and gas has been exactly that. And sadly, we have been comfortable producing oil and gas for others, while making foreign exchange with which we buy consumer goods and services. We did not use the money we got from the sale of oil and gas to acquire the technology for oil and gas exploration, production and refining.
We behaved as if the world will continue to depend on our oil and gas forever, while we shall continue to get the foreign exchange with which to import manufactured goods and services including goods and services that add little value to our economies.
Now the chickens have come home to roost. The West that we have depended on for nearly a century to explore, produce and refine our oil and gas has decided to abandon fossil fuels, ostensibly because they are injurious to humanity and the planet, but in reality because they want to have energy security. In a matter of decades, beginning from 1973, when oil embargo was placed on the USA and some European countries during the Arab-Israeli war, but especially since 2015, when global leaders met at COP21 and signed the Paris Climate Agreement, these countries have succeeded in turning the world against fossil fuels.
The demonization of fossil fuels has been orchestrated at every conceivable level. A lot of resources have been expended and are still being expended to mobilize global public opinion against the use of fossil fuels. Educational institutions, media houses and civil society groups have all become climate champions. It will be interesting for someone to commission a study on the sources of funding of Africa’s climate champions, especially the civil society groups.
A few questions beg for answers regarding the speed at which climate activists are asking the world, especially African countries, to go for energy transition. The world was given 35 years from the Paris Agreement to make the transition to net-zero. The impression one gets from the urgent need for speedy energy transition is that the world only recently got to know about the dangers of GHG emissions to the atmosphere. And that the world needed to act urgently to avoid a global catastrophe. But how correct is it that the science of climate change only recently got to know that burning fossil fuels is harmful to the atmosphere?
This knowledge has been available to the Americans and the Europeans as far back as 1859 and 1896 when their own climate scientists published studies that showed that emissions from burning fossil fuels are harmful to the atmosphere and therefore dangerous for mankind. But because these countries were industrializing and they needed a lot of energy to consolidate their industrialization, they carefully hid the results of those studies from the general public. And the world continued to use fossil fuels, with over 90% of the oil being burned in Europe and America alone.
Now that their countries have graduated from relying on energy intensive mode of economic production, to wealth creation through knowledge and artificial intelligence, and at the same time Africa is on the verge of industrialization, we are being told that the energy that propelled Europe and America to become what they are today, is not good for other nations. We are asked to abandon it in a hurry. We are being encouraged, cajoled and even threatened to abandon the hundreds of billions of proven oil reserves and hundreds of trillions of proven gas reserves for renewables that we do not have the technology for, even if we have the mineral resources.
To many people in Africa and across the world, there is more to the rush to energy transition than what we are being told. While many do not question the science of climate change, the question they keep asking is: Is the energy transition agenda primarily aimed at protecting the atmosphere for the good of all mankind as being claimed, or is it to quicken process of energy security for some countries that have come to the conclusion that they do not control the bulk of today’s energy source and do not trust those who control the resources to guarantee uninterrupted supply in the short, medium and long term, and therefore need to develop their own reliable source of energy.
If the concern is truly about emissions, there are better ways to handle the challenge than abandoning oil and gas altogether. Science and technology can be deployed to minimize to the barest minimum the emissions from fossil fuels. There are already technologies that can be perfected, commercialized and popularized to limit GHG emissions in the industry. Unfortunately, the people with the capacity to develop these technologies and deploy them are the very ones that see the need to demonize fossil fuels in their quest for energy security.
Excellencies, it should not be all lamentations. Africa has had enough of lamentations. The new Africa we are building for this and future generations is Africa of hope. And that requires practical solutions not theorizing or lamentations.
And this is where APPO is making its mark on the continent. A couple of years ago, the APPO Ministerial Council commissioned a major study on the Future of the Oil and Gas Industry in Africa in the Light of the Energy Transition. The study established four imminent challenges for the industry in Africa, namely: finance, technology, expertise and markets. The study noted that for the nearly one century that Africa has been producing oil and gas, it has depended heavily on external financing for its oil and gas projects – upstream, midstream and downstream. International financial institutions and International Oil Companies bring finance to produce the oil or gas and African governments only take their share. Little effort was put into raising local capital for developing the industry. Similarly, with oil and gas technology, Africa came to depend heavily on external providers. Even though the resources are on our continent the major oil and gas research institutions are located in Europe and America. In terms of expertise, a number of African countries have made some good progress. One of the biggest challenges that the study noted is the market for our oil and gas. Africa’s oil and gas infrastructure was developed to service others, not Africans. That explains why all the oil and gas pipelines ran from the fields to the ports for export, like our colonial railways and feeder roads that were constructed to carry cash crops from the hinterland to the ports for export.
The study further noted that with the determination of Europe and America, on whom we have come to depend for so long to operate our oil and gas industry, to make a quick transition from fossil fuels to renewables, Africa’s oil and gas industry faces imminent challenges.
What did APPO do? Fold our arms and lament the situation? No. We took practical steps to address those challenges.
Beginning with the funding challenge, APPO, last year, went into partnership with the Afreximbank to establish the Africa Energy Bank, AEB. As I speak, negotiations on the Establishment Agreement, Charter, and the Host Country for the Bank have reached advanced stage. When established, AEB shall focus on funding oil and gas projects on the continent. We are pleased with the enthusiasm that has heralded this laudable initiative. AEB shall ensure that its constituency is the African continent and shall do all it could to protect the interest of Africa and Africans.
On technology and expertise, the Secretariat from late last year to early this year, embarked on an evaluation of the existing oil and gas research, development and training institutions in some of our Member Countries, with a view to identifying those that can readily be recommended for upgrade to centers of regional excellence in the various sectors of the industry. This evaluation is still work in progress. Our objective is to encourage the pooling of our scarce resources across the regions to establish highly professional institutions that are open to industry operators from all our Member Countries.
And finally, on the challenge of markets as those on whom we have relied for ages have decided to abandon oil and gas, APPO believes that with 1.37 billion population, 600 million of who have no access to electricity, 900 of who have no access to modern form of energy for cooking and domestic heating, Africa cannot be looking for markets for energy if we set our priorities right. All we need to do is to empower the people to be able to access energy and the long awaited economic revolution of the continent shall become a reality.
Towards this end APPO is working with the Central Africa Business Energy Forum, CABEF, on developing a major energy infrastructure across the Central African sub region, the Central Africa Pipeline System, CAPS. The CAPS shall link 11 Central Africa states by oil, gas and products pipeline. When completed, CAPS shall integrate the energy systems of a population of over 200 million across the region. APPO notes that other similar projects are taking place in other parts of Africa and we support these initiatives. Our ultimate objective is to have a network of integrated energy infrastructure across the continent.
One of the major findings of the study on the future of the oil and gas industry in Africa in the light of the energy transition, is that no one African country has all it takes to be able to address the identified challenges that the energy transition shall pose to Africa’s oil and gas industry. However, working together, the continent has all it needs to be able to overcome the challenges and turn them into opportunities.
Excellencies, ladies and gentlemen, with what I have said about APPO and our vision for the African oil and gas industry, I believe that the Republic of South Sudan cannot have a better place to build international partnerships, attracting investment and technology and improving the performance of the South Sudan energy sector as well as the East African region more broadly, than with APPO.
I thank you all for your kind attention.