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Africa’s main Oil Producers and Exporters are meeting in Luanda, the Angolan capital to discuss the need for increased investment in the oil sector and to work out a strategy for the energy transition. UNCTAD was actively involved in setting the agenda of the meeting, which was attended by oil-producing countries on the continent
Africa’s main Oil Producers and Exporters are meeting in Luanda, the Angolan capital to discuss the need for increased investment in the oil sector and to work out a strategy for the energy transition. UNCTAD was actively involved in setting the agenda of the meeting, which was attended by oil-producing countries on the continent.
Omar Ibrahim, Secretary-General of the African Petroleum Producers’ Organization said that there was a growing perception that African countries were not serious about the energy transition. When energy security was threatened, the concept of energy transition was overlooked to produce more oil and gas, and even coal. The lack of investment in Africa’s oil and gas sector over the past few years has led to a sharp decline in production.
The meeting highlighted the reasons for the spurt in oil prices in recent times. With the sanctions on Russian energy, OPEC and its allies have set a target to meet a larger share of the global market. In March, Angola, and Nigeria, according to OPEC data, accounted for almost half of the deficit in oil supply to the global market.
The tension between Russia and Ukraine has caused supply disruptions in the market. There is a shortage of supply in the market. But that did not affect Nigeria because the country has a high grade of crude oil, which has a high demand for blending with other crude oil in the world.
The theme of the two-day meeting was “government-oil company-civil society triangle”. Oil companies are by now aware of the need for good community relations but still find it difficult to define what is a charity and what is development. How can these firms take care of business while also enhancing local linkages, which seem to be the major takeaway of the meeting?
There is also a paradox. In sub-Saharan Africa, gas is mostly flared off in the midst of a serious electricity deficit in virtually all countries in the region. UNCTAD has presented new financing schemes that would make it possible to invest in power plants that use this gas, contributing to a better business environment and reducing CO2 emissions in the process.
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Technological advances are making it possible to find and exploit oil reserves at previously impractical depths. Apart from providing a boom to countries like Angola and Nigeria, this is turning some countries, such as Equatorial Guinea and Sao Tomé, into new oil exporters. The summit will explore the possibility of applying this model to other countries on the continent.
Other topics discussed at the event included US-Africa energy cooperation; LNG projects in Africa; and methods for negotiating certified emission reductions with Western companies using the “clean development mechanism” created under the Kyoto Protocol.
