Held under the theme ‘Africa and the Global energy transition: Challenges and Opportunities’, the African Energy Commission (AFREC) in collaboration with the Organisation of the Petroleum Exporting Countries (OPEC), Africa Petroleum Producers Organisations (APPO), Africa Refiners & Distributors Association (ARDA), conducted its first OPEC-Africa Dialogue as part of the institutions objective to create value addition through synergies, to address energy poverty, climate change and other energy challenges on the African continent
The virtual dialogue marks the first step to reinforce and expand dialogue between AFREC and OPEC to combine efforts to promote Africa’s continent-wide energy cooperation initiatives. The High-Level meeting culminates more than two years of work to expand dialogue, technical cooperation and enhanced research on the continent’s promising energy future. The videoconference built upon previous technical meetings with OPEC and APPO, coordinated by AFREC.
In his opening remarks at the inaugural event, OPEC Secretary General, Mohammad Sanusi Barkindo, noted that OPEC has a long history of prioritizing cooperation through dialogues with a number of oil-producing and consuming countries, as well as with international organizations and global corporations.
“These events have proven to be highly effective in promoting mutual understanding on key energy issues, while also enhancing our common efforts as energy stakeholders to tackle industry challenges, such as the current COVID-19 pandemic,” the Secretary General said. Mr Rashid Ali Abdallah, AFREC Executive Director remarked that, bearing in mind that Africa produces almost 10 million barrels of crude oil per day, which represents about 9% of global crude oil production, Africa’s crude oil consumption is lowest, amounting to only 4% of global consumption. Over 70% of the oil production in Africa is exported indicating a low level of domestic processing, and missed opportunities for value addition, local manufacturing and trade. In terms of natural gas, Africa exports more than 45% of its total production. This large export signifies that Africa is the only continent which is a net exporter of crude oil and a net importer of petroleum products. Therefore there is need for a policy shift and approach, to facilitate the Africa energy sector transformation and attracts the required investment, which can only be harnessed and achieved through quality and reliable energy data.
‘‘As a leading energy institution facilitating energy development on behalf of all the member states on the African continent, as partners, we should start looking at opportunities which will diversify the available energy resources, taking advantage of renewable resources, to reduce dependence on oil as part of the country’s energy transition while simultaneously augmenting our approaches,’’ states Rashid The Africa-OPEC Dialogue also produced a plenary discussion on the following key topics: Enablers for clean and affordable energy in Africa, Energy investment and finance in Africa, Energy transition and climate change, Future of Oil and Gas in a post COVID recovery for Africa, Gas for clean cooking in Africa and Gender mainstreaming in Oil and Gas industries. Outcomes from the plenary suggested that, it is important to recognise that all energy fuels depend on each other if we are to reach a full energy sector transition. Discussants also highlighted that, to protect the African oil and energy sector in general, Africa should adopt a common voice and position on energy investment and development, to ensure the market is protected, sustainable and most importantly, Africans benefits from the its resources.
The inaugural meeting agreed to put forth a proposal document to OPEC Ministerial Round table to adopt the ‘One voice, One Position’ on objectives to be achieved in relation to Africa energy sector development. The document, once adopted will lead the discussions for Africa’s energy sector at COP26, in October 2021.
Similarly, a subsequent technical meeting which took place in the afternoon discussed critical specific issues of cooperation and execution and the following outcomes, amongst others where agreed : Harnessing energy statistics & data management through the Africa Energy Information system, developing synergies to expedite the definition of the African Energy Transition Programme vis-à-vis Africa’s real issues on energy, identifying value addition and cultivate paths on how to promote the creation of Africa’s Domestic Market for Petroleum Products. Parties also agreed to document impactful work done through joint news and publication on subjects of common interest as well as continue to gather key stakeholders on value addition to key thematic areas.
A total of 60 delegates representing AU and OPEC Member states, under the OPEC Declaration of Cooperation platform attended the meeting.
Notes to Editors
About Oil and Gas in Africa
Oil and Gas are some of the major source of foreign exchange revenues for some producing and exporting countries in Africa. A bulk of Africa oil production occurs in the Central, Northern and Western regions, making the North, South, West and East as the main consuming regions. Oil and Gas accounts for about 50 – 80% of government revenues in some of these countries. However, the impact of COVID-19 on oil prices caused a drastic fall, averaging to around $25 barrel in 2020 compared to $64 per barrel in 2019. The demand of petroleum products increased, and was recorded to 85% in 2020. To advance local value added for the African oil and gas sector, we should therefore aim to create the African domestic crude oil and petroleum products market by developing the required policies, strategies and promote expansion of refinery production capacity and associated infrastructure in Africa. The AfCFTA can facilitates such trade and integration actions.
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Directorate of Information and Communication | African Union Commission I E-mail: DIC@africanunion.org I Website: www.au.int I Addis Ababa | Ethiopia