The African Energy Chamber (EnergyChamber.org) organized a Power Breakfast yesterday in Malabo to mark the launch of its Africa Energy Outlook 2021. The event gathered all of the Chamber’s partners and industry stakeholders in Equatorial Guinea as the market embarks on a path to recovery in 2021.
Despite its remarkable resilience, Equatorial Guinea’s oil sector is facing the same dire situation as the rest of global energy markets: plunging oil prices, uncertain demand and dry of capital on the back of the energy transition. In such a context, the country has embarked early on an ambitious investment outreach programme with the Year of Energy 2020 and the Year of Investment 2021. Key priorities include boosting local content, expanding midstream and downstream gas infrastructure, opening up the Rio Muni to onshore oil & gas activities, and leveraging on the country’s tremendous minerals and mining potential to further diversify the economy.
In its latest 2021 Outlook however, the African Energy Chamber has called on African governments and industry stakeholders to come together and do more to support the sector’s competitiveness and attractiveness. A key concern for Equatorial Guinea’s oil & gas industry remains the lack of competitiveness of its fiscal terms and the lack of an attractive enabling environment that supports local private sector growth and jobs creation. “The time for fiscal reforms in Equatorial Guinea and the CEMAC region is now. If we do not act now, our companies risk going bankrupt, our economic parameters will worsen and our jobs will be in jeopardy,” declared Leoncio Amada NZE, CEO of APEX Industries and Head of the CEMAC Region at the African Energy Chamber.
The time for fiscal reforms in Equatorial Guinea and the CEMAC region is now
To support recovery and boost investment, the African Energy Chamber’s 2021 Outlook offers several pragmatic solutions. The Chamber has issued a call to action to policy makers and stakeholders around the adoption of bold fiscal reforms and the modernization of regulatory frameworks to bring back investors’ confidence. Similarly, the Chamber is increasingly engaging with financial institutions and banks on making capital more easily available to local entrepreneurs.
Finally, the 2021 Outlook also calls for a much wider adoption of natural gas across the economy, and a stronger industry dialogue to boost capacity building. “It would help if governments across the region caucus with international oil companies and the petroleum industry as a whole when drafting policies that are going to affect the industry. The voices of local and international investors need to be heard in order to adopt market-driven policies,” declared Simon Smith, Vice President and Country Manager at Marathon Oil Corporation.
Equatorial Guinea is ideally positioned to lead such a recovery, because of its political will and leadership and its established gas industry. “There is tremendous pressure from NGOs and green energy lobbyists, but there is still a future for the oil and gas industry in Africa. We have the right to exploit our natural resources to build our economies, and our natural gas potential offers such an opportunity,” added Oscar García Bernico, General Director of State Entities at the Ministry of Mines and Hydrocarbons. The Chamber has indeed highlighted how Africa’s gas potential, much more important than oil, is a key advantage for the continent as it seeks to embraced the energy transition and retain foreign capital.
The high-level reunion highlighted that, once again, the future is in the industry’s hands but the ability of policy makers and industry stakeholders to work together on a more ambitious set of reforms will be a deciding factor of the upcoming recovery. In doing so, the country will be ably to rely once again on leadership of H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons. Both at home and abroad in key institutions such as OPEC, GECF or APPO, he has always been central to advocating for the interests of the local industry and the rest of Africa at large. In this context, Equatorial Guinea has strong cards to play, and is thankfully already embarked on landmark projects that can set it apart from years to come, from the development of an offshore gas megahub in the Gulf of Guinea to the expansion of its refining and gas monetization infrastructure at Punta Europa.