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Intra-African energy dialogue has remained low — N. J. Ayuk

Africa

By Agbokhese Oboh

Cameroonian-born legal luminary, N. J. Ayuk, is the Executive Chairman of African Energy Chamber, a leading energy law firm, and CEO of Centurion Law Group, a legal and advisory conglomerate with headquarters in South Africa and offices across the continent.

With the publication of his new book, “Billions at Play: The Future of African Energy and Doing Deals,” the leading authority in African energy sector and renowned dealmaker answered questions from Vanguard’s Agbonkhese Oboh on the right local content policies and reforms, the role of women in creating a more economically prosperous Africa, the need for a strong regional economy and many more issues.

Also read: Nigeria, others to mobilise $2bn to finance energy projects across Africa – Kachukwu

Briefly, what is your view of the current state of the African oil and gas industry?

I’m proud to say that Africa’s oil and gas sector is seeing a rebound— I call it our come-back story. Energy has a powerful role to play in uplifting our continent, its economies and its people, but of course, more needs to be done. We need better enabling environments, stronger corporate governance, greater women empowerment strategies, and more aggressive and efficient national oil companies. Finally, we also need to make better deals that work for our citizens and our economies put jobs creation at the centre of the table and result in the creation of local value and local opportunities.

Given the projection that crude oil would lose its relevance in the near future, how should African oil producers position themselves to ensure they are not caught napping?

Get busy and get involved or get left behind. Pursue meaningful routes to change current negative narratives, practical solutions, radical re-thinking of the industry’s operational outreach, and go for a real opportunity that will foster development and job creation. We have got to keep going because oil is not going to disappear from our economies and consumption patterns anytime soon.

With artificial intelligence changing the face of almost every field of human endeavour, how prepared do you think the African oil and gas industry is to advancements in ICT?

The long-standing stereotype of Africa as a technological backwater is dissolving, and rightfully so. It is also true that African tech innovations have mostly drawn attention for their contributions to mobile money, retail trade, entertainment, healthcare, and telecommunications—and not to oil and gas. We haven’t made as much progress with respect to the energy industry, as a result, oil and gas producers and service companies working in Africa have continued to rely on technology imported at great cost from Europe and the United States.

There is great potential for technological innovations such as the development of new ways to drill wells and handle equipment, the design of new seismic data collection programmes, the management of petroleum data systems, and the monitoring and protection of internet-connected equipment.

Better equipment and more sophisticated software will benefit African fields much more than their counterparts in the West. The lack of ICT (among other resources) cuts business productivity by as much as 40 per cent in Africa. I encourage African producers to support businesses that give their workers opportunities to develop transferable skills that are useful both inside and outside the oil and gas industry: information technology, communications, logistics, manufacturing, finance, and trade.

“Billions at Play: The Future of African Energy and Doing Deals,” is your second book on oil and gas in Africa. Are ideas and/or concepts in this book based on feedback on your first, or from your experience as a legal practitioner in the sector?

In this new book, I flesh out a practical plan that can be used to help Africa grow. I wrote my first book “Big Barrels” over three years ago. The industry is in a much different place now. More than anything, the message that African energy must benefit everyone, and must involve us all no matter what sector you are from, needs to be told and heard more. We need to take ownership of our energy story as a people. I strongly believe that “Billions At Play: The Future of African Energy and Doing Deals” is sent from the future to show us how to get there.

You seem to be advocating more women participation in the sector; why and what special qualities or abilities do you expect from them that the sector is currently missing?

The oil industry needs to create more opportunities for African women in the oil and gas industry. Women have a great deal to offer, and good jobs for women contribute to a more stable, more economically prosperous Africa. We do not have enough women in executive roles in the African oil industry — that needs to change. In a majority of African oil firms, women in leadership are still under three per cent.

We have to create more opportunities for African women in the oil and gas industry to be empowered in a more meaningful, practical manner— for example, local content policies that prioritise women-owned suppliers and sub-contractors. I think we should all be calling for women and men to receive equal compensation, whether it’s wages, community programmes or property royalties, etc.

What’s the place of the recently signed African Continental Free Trade Agreement, AFCFTA, in your projections? Do you foresee effective collaborations?

Africans must unite, cooperate and trade with themselves. We need to see African nations engage each other more, as the intra-African energy dialogue has remained too low given the natural resources potential of our continent. I can’t stress enough how vital it is for African governments, indigenous companies, and citizens, in general, to work together. African oil and gas traders, power producers and industrialists have to get on board.
The AfCFTA will yield great results for the oil industry.

Forcing our energy producers to look within Africa can be the driving force needed to foster a vibrant intra-African energy trading. Strong regional economic ties can promote political alliances and create a strong internal market. That’s simply more realistic and more important for the economic health and future prosperity of our continent. A strong regional economy gives the continent a competitive edge in the global economy.

The prolonged low crude oil price appears to be negatively affecting OPEC members more, especially its African members. How do you think African oil and gas producers can reverse this trend and drive global demand for their benefits?

OPEC membership can be a powerful force for transformation. Because OPEC is evidence of what careful management of oil and gas resources can achieve, every OPEC member adds to the group’s stability and strengthens members’ commitment to one another. The benefits are abounding, aside from much-needed market clout, increased global prominence, and enhanced opportunity to coordinate with other global oil producers.

I speak about it in “Billions At Play,” one potentially overlooked benefit of access to OPEC is access to information. I don’t think a lot of value is given to that. OPEC members can seek and share information with others who have experience. With Africa being one of the world’s remaining oil and gas frontiers, where big discoveries are still possible, much is to be gained from that. For OPEC members, the days of being blindsided are over. OPEC membership can even help finance that strategy by opening the door to direct foreign investment, including from Middle Eastern countries with substantial sovereign wealth to spread around.
Half of OPEC’s 14 members are on the African continent— that is not a small feat.

It’s extremely important for Africa’s producing nations to be part of the discussion on global strategies that will affect their fortunes. It’s a great start to joining OPEC and the Declaration of Cooperation. I think it’s safe to say that the agreement’s production cuts rescued the oil industry from collapse, boosted interest in African oil investment, and returned economic security to oil-dependent nations, many of which are in Africa. In fact, if we want to increase the influence Africa has within OPEC and improve our profile in the world oil economy, more African nations need to join in.

The Middle East is heating up, there’s Brexit just around the corner and there’s the unpredictability of President Donald Trump of USA. Do you see opportunities or trouble for African countries’ economy vis-a-vis trade in crude?

Collaboration is critical to Africa’s future. Africa remains largely under-explored. The oil and gas industry is here to stay for a long time to come, not only in Africa but throughout the world. So why not collaborate? We need these oil and gas companies to continue operating in Africa and to continue hiring African people, purchasing from African suppliers, and partnering with African companies. And we need them to be willing to share knowledge, technology, and best practices.

I see opportunity in businesses that are willing to be good players and form positive relationships with Africa in the areas where they work. We need to do the work necessary to create the kind of environment that will continue to attract not only American investors and companies but other foreign direct investment— and yield mutually-beneficial partnerships.

Lastly, in the Foreword to “Billions at Play: The Future of African Energy and Doing Deals,” OPEC Secretary-General, Mohammad Barkindo, called you a dreamer that never gives up. Are you certain your dream of a prosperous Africa built on oil and gas is not a mirage?

It is not a mirage that African economies are undergoing a transformative period, led by its energy sector. Africa just needs to get better at using its natural resources strategically and fully develop and capitalise on their value chain. This is exactly what I address on “Billions At Play.” With all these oil and gas discoveries, billions are then at stake if we don’t have the right local content policies and reforms to make sure Africa is living out from its full potential, empowering her people and developing. I call it my work.

I have helped both private companies and African governments alike take proven steps in the oil and gas industry to improve African economies and help everyday Africans have better lives by harnessing the influence of our natural resources. I’m seeing it work. This is a blueprint for African vitality and advancement underpinned by a realistic understanding and framing of the energy sector in Africa, backed by evidence and experience.

Vanguard

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