Vice President Yemi Osinbajo has advised oil-producing countries in Africa to plan for a world beyond oil, saying they cannot afford to act differently from the rest of the world.
Professor Osinbajo stated this Monday while declaring open the Extra-Ordinary Session of the Council of Ministers of the African Petroleum Producers’ Organization, APPO, in Abuja.
“We cannot bet on the fact that even a few decades from now these natural resources will be as central to the global economy as they are today,” he stated, adding that “all serious economies around the world have realized this, and are making determined plans for a world beyond oil.”
The vice president said African oil producers “must keep in mind that oil and gas are only guaranteed as today’s resources, and not necessarily tomorrow’s.”
Osinbajo called for increased collaboration among members of the APPO to enable them overcome their financial challenges.
“Increased synergy will no doubt help mobilize the investments needed to deliver the major infrastructure required by the industry, like trans-border gas and oil pipelines, joint refineries, gas plants, and so on,” he said.
Vice President Osinbajo said that individual countries often do not have the resources required to make the necessary investments to grow the oil and gas industry as well as to build infrastructure and social services and needed to come together.
“Nigeria, as most of you know, is already leading by example, with our work on the West Africa Gas Pipeline Project, and the Nigeria-Niger collaboration on refining. In the increasingly interdependent world in which we live, greater levels of regional economic integration are required, allowing the free flow of the dividends of research and technology. APPO also needs to seriously look beyond public sector or government ownership of its activities, and tap into private sector competencies and models to a greater degree.”
He assured the African oil ministers of Nigeria’s support in their effort to revitalize and reform the APPO in its quest to become “a major institution of reference on Africa’s hydro-carbon matters, and indeed, the pride of Africa.”
“I am confident that a revitalized APPO will contribute tremendously to the development of the African oil and gas industry, particularly now that Africa is becoming a major global player in the sector.”
Osinbajo listed the achievements in the Nigerian oil and gas industry in the past three years to include the implementation of “a comprehensive blueprint for reform, known as the Seven Big Wins, focusing on seven key reform areas,” which “have all been central to the Change Agenda of the Muhammadu Buhari Administration.”
Others, according to him, were the “long overdue legislation that will provide a modern, transparent and efficient framework for the governance of the Nigerian oil and gas industry – the Petroleum Industry Governance Bill,” and “other pieces of legislation touching on Regulation, Fiscal Issues and Community Issues are in the process of being developed.
“Furthermore, for the first time in decades, modern policies for the governance of Nigeria’s oil and gas sectors have been discussed and approved by the Federal Cabinet. These include the National Petroleum Policy and the National Gas Policy, both of which set clear directions on the role of government in the industry, outline a roadmap for the governance of the sector and for its operations, and highlight the investment opportunities available for investors both from within and outside Nigeria.”
Osinbajo said the APPO Fund for Technical Cooperation, “which is also undergoing recapitalization, could be modelled after similar institutions that have succeeded, like the OPEC Fund; non-APPO Member countries and private institutions should be able invest in the APPO Fund.”
According to Osinbajo, “the APPO Fund ought to operate as an autonomous entity, independent of the APPO Secretariat, in the same way that the OPEC Fund operates independent of OPEC.”
In his speech at the session, Nigeria’s Minister of State for Petroleum, Ibe Kachikwu, said that there were new finds of oil and gas resources across Africa, which requires the necessary finance for exploration.
Kachikwu, who took the mantle of leadership of APPO from the former president, Michel Boukar, said though Africans were enthused by the possibility of further harnessing new natural resource, finding the necessary financing for its exploration was difficult, especially with the tumbling of oil prices.
“The only way growth can happen in this sector in the whole of Africa is an inter-dependence approach. All of us must be able to hold hands and find a way of supporting one another in terms of research, in terms of internal investment potentials and capabilities and help to drive the process,” he added.
In his remarks, the Secretary-General of the APPO, Mahamman Laouan Gaya, said the development of shale oil in the United States of America has tended to undermine the exploitation of conventional reserves and the major producers of oil in the Middle East.
He said “if Africa were be considered as single producer, it is certain that our continent could challenge Saudi Arabia, Australia and the United States of America.”
Mr. Gaya said the reforms being worked out in the APPO would ensure a more united and stronger African oil cartel to stand the challenges of the world oil industry.