The CEMAC region - which comprises Cameroon, Chad, the Central African Republic, Equatorial Guinea, Gabon, and the Republic of Congo – is richly endowed with multiple natural resources, in which a recent oil and gas boom has the potential to accelerate economic growth and alleviate energy poverty throughout the region. Despite comprising one of the richest areas on the continent – with existing production levels at 700,000 barrels of oil per day and 5 million tons of LNG per annum – the CEMAC region also remains one of the most challenging business environments in Africa, with red tape and burdensome regulations creating significant barriers to entry.
Gas from the YoYo/Yolanda field (which straddles the maritime border between Equatorial Guinea and Cameroon, operated by Noble Energy on both sides) may also be eventually processed at Punta Europa. In mid-2017, Noble Energy signed an agreement with both governments to develop the fields jointly. Resources for YoYo are estimated at 47 Bcfg and 18 MMbc, whilst resources for Yolanda have been estimated at 27 Bcfg. The delays in approving these deals are not helpful to the citizens of both countries and we urge all players to fast track the process. Whilst the Etinde fields are just 35km away from Punta Europa, we are concerned about the delays in developing this project as well. We hope to see an FID soon and free from regional politics.
The region has been blessed by many companies that exploring for energy like Parenco, New Age, Bowleven, Exxon Mobil, lukoil ,Tower Resources, Chevron, Vaalco, Marathon, Atlas Petroleum, Glencore, Total Energies, BW Offshore, Assala Energy, Royal Gate Energy ENI, Kosmos Energy, Panoro Energy etc. They are creating so many beautiful jobs and must be encouraged. The issues of energy transition are real and we welcome an honest dialogue that starts with making energy poverty history.
While the concerted effort amongst all of the world’s nations is fundamental to curb the effects of climate change, it is paramount to have a clear understanding of what efforts will be most decisive, and which regions of the world are in a better position and have the biggest responsibility to tackle these issues. Demonizing energy companies is not a constructive way forward, and ignoring the structural role that carbon-based fuels have in today’s society distorts the public debate. Bringing energy companies, governments and civil society groups together to find functional solutions will achieve much more. We in Africa must not be dragged into the western hatred of oil companies. You can’t love jobs and hate those who create jobs. We must support our energy companies to ensure jobs and development for our people.
As Dr Martin Luther King Jr., stated in his letter from Birmingham Jail “We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.” We are tied together with these energy companies, and we must never apologize for supporting them and the so many African workers that work in the energy sectors. Africans are the biggest beneficiaries of their investment and their work.
One of the primary challenges hindering investment in the CEMAC region concerns excessive regulations such as the Bank of Central African States’ (BEAC) newly established foreign exchange (forex) policies. By increasing operational costs and reducing the ease of doing business across the region, such regulations reduce the appeal for foreign investors, rendering the region uncompetitive. With the focus on an effective COVID-19 recovery and accelerated energy sector growth requiring significant amounts of foreign capital, disrupting regulations such as the BEAC’s could significantly hamper any progress made by the region in recent years.
“We at the AEC, continue to believe that the BEAC’s new forex regulations pose a significant threat to domestic economic growth, directly restricting local business participation and disrupting local content development. The work Mr Jude Kearney and Leoncio Amada Nze are doing leading our AEC taskforce is critical” Stated NJ Ayuk, Executive Chairman of the African Energy Chamber
“Through adjusted foreign exchange rules, increased tax policies, and restricted capital flow, local businesses will be unable to compete or establish partnerships with international companies, resulting in job losses and associated energy poverty. If the idea of BEAC is to hurt investors, they are not only doing that, but they are also hurting the local companies as well and the bureaucrats of BEAC should not be picking winners and losers. This is against the pro-growth and market driven policies that will ensure economic growth than begging for foreign aid, and we will make it a topic at African Energy Week in Cape Town”. Concluded Ayuk
In response to these challenges, the AEC is focused on a multi-stakeholder approach in eliminating red tape, burdensome regulations, and barriers to investment across Africa. Through meetings with BEAC representatives, Leoncio Amada NZE is advocating for an enabling environment, market-driven policies, and increased local participation in the regions energy sector, promoting AEW 2021 in Cape Town as the best platform to drive this trend. By uniting global and African energy stakeholders and financiers in one comprehensive event program, AEW 2021 will be the best place to discuss how the CEMAC region can create a more inclusive energy sector, attract further investment, and facilitate critical intra-African trade.
In driving this narrative, Leoncio Amada NZE has conducted productive meetings with industry leaders in Equatorial Guinea, initiating a valuable dialogue on the role of an enabling environment. Notably, meetings with H.E. Bindang Ndong Okiri, Secretary of State of Planning of the Ministry of Economy and Finance, emphasized how the adoption of fiscal policies that attract Foreign Direct Investment can create a competitive energy sector. Additionally, a meeting with representatives from Marathon Oil – an exploration and production company that has been at the core of Equatorial Guinea’s economic transformation – generated an insightful discussion on sustainable oil and gas operations. By emphasizing the need for regulatory reform, in which ease of doing business and investor-friendly policies are a focus, both Leoncio Amada NZE and the AEC are focused on driving investment in Africa.
What’s more, in a bid to promote AEW 2021 and invite international participation at Africa’s premier energy event, Leoncio Amada NZE met with Jesus Alfonso Osa and representatives from ExxonMobil’s Malabo team to discuss how the oil and gas industry can drive an economic transformation in the CEMAC region. With a firm presence and active participation in Equatorial Guinea for almost three decades, ExxonMobil has been a major contributor to energy sector and GDP growth. In addition to expanding their own operations in the country, ExxonMobil, through the implementation of local content programs, has transformed the local business sector, driving job creation and economic growth. Through events such as AEW 2021 in Cape Town, ExxonMobil can enhance partnerships and promote growth across the CEMAC region.
Finally, Leoncio Amada NZE’s meeting with Mr. Juan Antonio Ndong Ondo, CEO of Sonagas GE – the national gas company of the Republic of Equatorial Guinea –, further advanced the discussion on the role of the local business sector and National Oil Companies (NOC) in driving energy sector growth and success. By focusing on regional expansion as well as the value of local content and business-friendly regulation, both Leoncio Amada NZE and Mr. Ndong Ondo emphasized investment and intra-African partnerships, both of which will be facilitated at AEW 2021 in Cape Town.
Equatorial Guinea and the wider CEMAC region have significant potential, and AEW 2021 serves to enable the realization of economic growth, increased investment, and local business enhancement by emphasizing the risks pertaining to the BEAC forex regulations. Africa needs energy as well as productive partnerships to accelerate economic growth, all of which are driven by market-driven policies, productive regulation, and multi-stakeholder integration. AEW 2021 presents the most suitable platform to network with stakeholders, drive investment, and promote sector-advancing regulation. Distributed by APO Group on behalf of African Energy Chamber.
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© Press Release 2021