By Margaret Nongo-Okojokwu
The UAE is leading the way in terms of investment in Africa’s oil and gas sector, according to industry experts. Speaking at the Middle East Petroleum Club’s ‘Harnessing Africa’s Potential’ seminar, David Phillips, Chairman of the Board of the US-Arab Chamber of Commerce, said the financial opportunities had been overlooked by the rest of the world. “The African growth phenomenon has largely been missed by the rest of the world. The UAE has emerged as a key trade and investment partner for Africa,” he said. The UAE’s investment in Africa has been comprehensive and extends well beyond the core of its oil and gas sector. “Investments made in logistics through Dubai Ports World, and telecommunications through Etisalat, have supported the continents connectivity, both internally and with the rest of the world. UAE based power companies have invested in electricity supply in a number of African markets… other Middle East states should follow the UAE’s lead in viewing Africa as a fantastic opportunity for trade and investment, rather than as a continent needing to be saved,” Phillips added. Africa currently provides around 10 per cent of the global energy mix, but analysts agree that there is huge potential to dramatically increase this figure.
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Africa is a continent that is developing at an astonishing rate, boasting seven of the 10 fastest growing economies in the world. International investment in Africa’s oil and gas sector could help to lift Africa’s poorest nations out of poverty and provide a sustainable base for their economies. “In Mozambique they recently found 220 trillion cubic feet of gas, and the resources there are enormous. Anadarko are doing a lot of work in Mozambique and their CEO, Al Walker, recently said that Mozambique has the potential to become the third largest gas producer in the world. That’s a country of 75 million people with a GDP of $15 billion. The transformational potential of that is huge,” explained Geoffrey White, Chief Executive Officer of logistics firm Agility.
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While the rewards are potentially huge, Africa requires massive amounts of investment in its oil and gas logistical sector to facilitate its development. “The real question is: what are the infrastructural capabilities in Africa? The answer is that, in some parts of Africa, there are literally no logistical capabilities. Certainly no oil and gas industry compliant infrastructure,” White said. With the UAE blazing a trail as the key trade and investment partner for Africa, other nations are starting to follow suit, as Africa looks to dramatically increase its oil and gas output. “There are stellar returns available to those who choose to invest in Africa,” said Adewale Tinubu, CEO of sub-Saharan Africa’s leading Energy firm, Oando.
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Speaking with Orient Energy Review at the closing ceremony of the 4-Day conference, UAE’s Minister for Energy, H.E. Suhail Al Mazrouei said Africa is a very important region to the Middle East in terms of Hydrocarbon resources, oil and gas. In his words: “many are looking at Africa especially with the discovery of gas in North Africa, in Mozambique, that is why the contribution from Africa is very important. That means that we need to balance the market and make sure that we prioritise the production, that is the economic oil come first and then the most expensive oil becomes the swing producer, and that I think is the norm in every market.
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Orient Energy Review also spoke to Christopher Hudson, president, Global energy, dmg events who expressed great satisfaction with African representation at ADIPEC 2015 and the future plans to expand into region. In his words: ‘we love Africa, we have a good representation from Africa this year, we have representation from Gabon, Morocco, Nigeria and then PETAN from Lagos, we have an African event in Kenya called the East African oil and Gas, and one in London called The Global African Investment Summit, drawing in the likes of Aliko Dangote, Olusegun Obasanjo and other prominent Africans. So for us it is a very big continent with huge opportunities and we look forward to doing bigger things in the region very soon.
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