Regional energy stakeholders, leaders and global financial institutions have been asked to mobilise funds required to aggressively monetize the full power of regional natural resources for economic development. Mr. Ibe Kachikwu, Nigeria’s former Minister of State for Petroleum Resources made this known in a document obtained by EnergyDay.
The former Minister revealed that over 30 billion dollars worth of hydrocarbon investments have been offloaded in the last four, five years, due to the exit of major oil companies all over Africa.
He therefore charged African energy, financial organizations and oil producing countries to unleash potentials by taking over the investment left by the IOCs.
Kachikwu who is now an energy industry consultant said, “ Global hand-holding within the African region is absolutely urgent to secure the continental energy future. We need to move forward in terms of applications and development of these resources.
“It is also time for regional and global institutions like OPEC, ARA and APPO, and supportive global and regional financial institutions like IMF, AFDC, IFC, amongst others, to begin serious dialogue on how to monetize a lot of latent resources still undeveloped and use the resulting revenue for programmed development in these countries.
He asked OPEC and African Petroleum Producers’ Organization (APPO) in collaboration with reputable global financial institutions to provide needed guarantees and financing packages that would help these resource-rich countries grow. The financial institutions according to him, may also package the countries for stock exchange funding.
He said, “Africa is in a very critical time in the growth process of the energy sector. He warned that within the few years global push for energy transition will assume much wider dimension.
“This is a very critical period for the continent of Africa, because there are lots of African economies who are looking for opportunities to be able to grow, and join the league of oil-producing nations.
“We are getting to the stages where major oil companies and IOCs are basically walking away from their investments or selling their investments. This is about the concerns of emissions.
Balancing investment in African hydrocarbon industry and energy transition
Kachikwu also warned that beside the need to develop the continent’s hydrocarbon industry, commensurate efforts should be given to the energy transition in the continent. He cautioned that it is dangerous to wait until when the industry mature before playing active role in energy transition.
He said, “Unfortunately, it’s almost like African countries are not leaping ahead well enough. Our transition from firewood to coal to oil period over the years has been very slow. We are always miles behind, and so that is why the warnings that African should join the energy transition process is very critical.
“As we begin to make bounding leaps towards the next generation movement in this sector. Otherwise, again, by the time we get there, we will be lost in the transition.
Development of infrastructure to avoid resource misappropriation
He urged African leaders to focus more on infrastructure and private sector driven policies. This according to him will limit the pool of free funds available to corrupt political leaders, as the fund will be put into long term ventures.
Kachikwu said, “We need to start reflecting on Africa in the context of the ever recurring questions of resource income misapplication, underdevelopment and under transparency. I believe such global initiatives and dialogue will help refocus countries on the urgency
“It astounds me how intellectual creative resources unleashed by private individuals like Elon Musk, Mark Zuckerberg, Bill Gates, Jeff Bezos, have been continuously monetized even before full nurture to expand the resultant corporations.
“Yet, African countries struggle to unleash their natural resources to fund adequate development. There remains a gaping opportunity to explore new paths to successful funding of infrastructural development in resource-rich nations.
“But I think it is also a huge opportunity period for oil investors or national investors in the African continent, both individual and corporate, and both individual and national.
Collaborations between national oil companies
Kachiwu also called for a long term bonding between African national oil companies. According to him, unifying and bonded relationship between these national oil companies, obviously led by the likes of Nigeria and Angola, will help to catalyse this group of national oil companies as the next vehicles of development in this sector.
He said, “It is very critical that we begin to find forums in which we all come together, share thoughts, and look at what investment potentials are. Nigeria has done quite a lot in the last couple of years in terms of energizing private sector investments by Nigerians, and I’m beginning to see a lot of Nigerians get outside Nigeria to own blocks in very many countries in Africa and to indeed join as investors and financiers of foreign exploration and production activities in those areas.
“But the sort of funds that we have are not enough. We need to leverage on regional organizations who have requisite funding for this to be able to grow.
“Whether it is places like Senegal, which have been able to at least transition out into being able to find and discover their own oil and beginning to create a mix of production. To the likes of Kenya and the rest who are beginning to grow in those areas. Or the likes of Liberia, which has some of the most versatile fields available in the African continent right now.
“Or Nigeria, which continues to grow and continues to look at new opportunities. It will be nice to see what each country is doing and what the opportunities are.
Investment of local oil major in other African countries.
The former Petroleum Minister challenged private sector players in the oil and gas sector to get into these counties and invest in their hydrocarbon industry.
Kachikwu noted that the African counties are very aggressive in developing their oil and gas sectors. He added that the discoveries and development are happening at a time when there is global push for energy transition.
He said, “The volumes of oil and gas that are going to be hitting the market over the next ten years are fairly massive. And if the energy transition moves at a fairly rapid pace, then Africans have certain things to worry about.
He therefore urged the major oil companies at the forefront of transition process to maintain leadership positions in terms of investment in African countries.