(4 minutes read)
· The African Energy Chamber (AEC) has been taking concrete steps to engage U.S. companies and investors to counter the often-wrong preconceptions about investing in the continent
· Significantly, US energy majors like Chevron, ExxonMobil and Kosmos Energy are making significant discoveries in multiple countries like Angola, Mozambique, Nigeria, Equatorial Guinea, Senegal, Ghana, and others
· These US companies fully understand the risks involved in the continent and the steps to be taken to mitigate risk factors due to their long term handson experience
President Biden’s Interim National Security Strategic Guidance signaled for continued growth in partnerships with African economies. Taking cue from that the African Energy Chamber (AEC) has been taking concrete steps to engage U.S. companies and investors to counter the often-wrong preconceptions about investing in the continent. The chamber has been advocating as Africa has some of the fastest-growing economies globally and possesses significant investment, U.S. companies could play a significant role in ensuring a lower-carbon future in the continent
Significantly, US energy majors like Chevron, ExxonMobil and Kosmos Energy are making significant discoveries in multiple countries like Angola, Mozambique, Nigeria, Equatorial Guinea, Senegal, Ghana, and others. Large US corporations General Electric, Halliburton, and hundreds of Houston and Oklahoma based companies have successfully developed some of the most important projects in the continent. These US companies fully understand the risks involved in the continent and the steps to be taken to mitigate risk factors due to their long term handson experience.
To sensitize the US corporations and others about investing in Africa, the AEC will put in public domain a series on “Changing the Risk Perception About Africa,” to motivate more and more energy companies to invest in Africa. The first article is relating to opportunities in Africa’s natural gas, gas-to-power, rare earth elements (“REEs”) industries, as well as the opening of an M&A market from assets left by IOCs. The Chamber says that U.S. firms should take advantage of these opportunities to add lower-carbon projects to their portfolio, to remain at the helm of technological development for energy transition..
The second aspect is mitigation of political and security risks. Many African countries have shown political resilience, changing policies, practices, and procedures to provide certainty to energy projects. A number of private companies including U.S. companies, have participated jointly with the governments in such efforts, and have become experts in mitigating those risks\
The chamber also will sensitize the return on capital for investments in the energy sector. Companies and investors should not be afraid of developing projects on the continent, as most projects have reasonable returns. Aspects like mitigation of legal risks, misconception of corruption and how exploration and operational risks could be hedged also would be treated in the series of articles to be published.
