Based in Cape Town, South Africa, Guillaume Doane is the CEO and co-founder of Africa Oil & Power (AOP), the continent’s leading forum for energy development and discussions. This year, the third edition of Africa Oil & Power’s annual forum brings together top African leaders from the oil and energy sectors in Cape Town from September 5 to 7.
This year’s conference honors the Secretary General of OPEC, H.E. Mohammed Barkindo, as Oil Man of the Year just as Africa’s participation in OPEC increases. With now 7 African countries as members, what is the extent of the continent’s influence in OPEC?
When we began piecing the program almost a year ago, it was becoming evident that global oil and markets were finally outlasting the commodity price constraints that had crippled the industry since late 2014. The oil market downturn was particularly harsh on petroleum-dependent African economies. As the industry in 2018 enjoys a year of positive growth, we believe it is important for Africa Oil & Power to not only be an enabler of investment but to also promote increased cooperation between the world’s energy institutions to support Africa’s energy agenda. We cannot understate the important leadership role that OPEC has fulfilled in guiding the industry through dark times and providing new African members like Gabon, Equatorial Guinea and the Republic of Congo with a global outlet to vocalize their interests. Moreover, with several new African oil and gas producers emerging (Senegal, Uganda, Kenya and others), there is a great opportunity for legacy producers like Angola, Equatorial Guinea and Nigeria to support the newcomers. We are proud that Africa Oil & Power is a venue to facilitate this cooperation with the participation of important institutions like the International Energy Forum, the Gas Exporting Countries Forum and the African Petroleum Producers Organization. It is our profound hope that cooperation through dialogue will eventuate in cooperation through trade and infrastructure like cross-border pipelines, LNG terminals, refineries, petrochemical facilities and power plants that are critical to Africa’s development.
How do you see new African oil and gas producers contributing to the continent’s energy profile?
The Atlantic Margin and other prolific basins in West Africa have played a prominent role in making the African continent one of the leading regions for world-class oil and gas discoveries. Senegal, Côte d’Ivoire, Mauritania, The Gambia and other countries in the region have all emerged as exploration hotspots. They will all eventually join the ranks of oil and gas producers and contribute to Africa’s rising share of global oil reserves. These are very encouraging developments. Africa remains one of the most exciting places in the world to explore for oil and gas. Something which we pay attention to at Africa Oil & Power is how many of these discoveries actually make it to production and how fast. We try and be an effective forum for discussing whether African countries have the right legal and regulatory frameworks and local content policies in place, as well as sufficient access to investment capital, international know-how and technology to bring these discoveries online.
members constitute 17 percent of OPEC’s total production”.
What place does local content have on the Africa Oil & Power program? What are the challenges and opportunities?
Part of Africa Oil & Power’s mission statement is that we are dedicated to empowering Africa’s indigenous companies and giving them a platform to promote leadership, local content and entrepreneurship. Every conference program includes at least one panel on local content or public-private partnerships and we host multiple Country Spotlight sessions that feature indigenous companies with a prominent role in the energy industry across the value chain. Africa has a wealth of homegrown companies with incredible success stories. We could name so many but I think of impactful companies like Deltatek Group, Centurion Law Group, Nile Petroleum Service Company and countless Nigerian organizations from Oando and Sahara Petroleum to Seplat and Atlas and Oranto that have been pioneers for other local brands to emerge. Sometimes we see the discussion over local content get lost on questions of policy and enforcement and we forget that so many indigenous companies became successful without the support of local content regulations.
This year’s conference honors the Secretary General of OPEC, H.E. Mohammed Barkindo, as Oil Man of the Year just as Africa’s participation in OPEC increases. With now 7 African countries as members, what is the extent of the continent’s influence in OPEC?
Nearly half of OPEC’s membership is now African countries but put together African members constitute 17 percent of OPEC’s total production. So the biggest producers like Saudi Arabia (and to a large extent major non-OPEC producers like Russia) are still leading the discussion on OPEC policy. Nevertheless, membership in OPEC is undeniably attractive for African producers, giving access to data and information and a seat at the decision-making table of one of the world’s most influential energy organizations. It is better for African producers to join a venue that represents their interests than to be on the outside looking in.
Does Africa Oil & Power work with other African countries that are interested in joining OPEC, like South Sudan and Uganda?
Since Equatorial Guinea became a member last December and the Republic of Congo joined earlier this year, no other African countries have expressed formal interest in joining OPEC. But we can expect African engagement with OPEC to intensify. Many African non-OPEC producers, including Chad, Sudan and South Sudan, joined OPEC’s oil production cuts. Even non-producers like Uganda and South Africa have participated in OPEC technical discussions. This is an unprecedented level of cooperation.
Africa Oil & Power 2018 is putting a spotlight on South Africa this year. What do you think about the new administration’s energy policies?
Overall, the new administration has been effective in clarifying its energy agenda and providing the investment community with greater regulatory certainty. By distancing itself from a confounding nuclear energy narrative and putting stronger emphasis on IPP-led gas-to-power and renewable projects, the South Africa Department of Energy is presenting a more dependable and more encouraging investment framework. Inevitably, coal will continue to be a dominant source of South Africa’s electricity needs, but the increasing energy balance is a positive step. On the oil side, there is no doubt that the industry has languished in the absence of a new Minerals and Petroleum Resources Development Act amendment bill. Despite real resource prospectivity in South Africa’s offshore, current regulations are deterring drilling activity and interest in acquiring exploration permits. At the beginning of the year, President Ramaphosa was committed to accelerating the passage of a new law. Doing so would empower the industry with the same clarity that has emboldened the power sector.
Do you think the NOPEC legislation being proposed in the US has potential to pass?
Believe it or not, NOPEC dates back to 2000. Since then Congress has made more than a dozen failed attempts to pass the bill. Each time it was met with veto threats from Presidents Bush and Obama. President Trump has been scathing in his criticism of OPEC but that is not necessarily a sign that NOPEC will pass this time. Trump’s tirades on Twitter seldom translate into radical changes of policy. And we should also remember that NOPEC is a recurring symptom of American consumer anger over rising gasoline prices, an important issue as the US prepares for midterm elections this November. Michael D. Ehrenstein wrote a terrific article unpacking this issue on our website.
