Nigeria, others to renegotiate climate change deal, up regional investments

There is a renewed vigour by Nigeria and other members of the African Petroleum Producers Association (APPO) to develop regional oil and gas investments and renegotiate the COP-21 Climate Change Agreement.

Already, the oil producers are working on an Africa Local Content Fund that could be utilised to set up a bank or finance institution to provide funding for the development of oil and gas projects in the continent.

COP-21 climate change agreement is driving the accelerated move by developed countries to discourage fossil fuels as the preferred source of energy for transportation and embrace renewable sources.

The Minister of State for Petroleum Resources, Timipre Sylva, who delivered the keynote address at the two-day retreat attended by representatives of APPO member states charged African oil-producing countries and their oil and gas companies to cooperate closely in developing and sharing capacities and capabilities that would optimize hydrocarbon deposits and achieve economic growth and development.

He also advised that it was time to move quickly to create innovative funding mechanisms for major projects using local resources and break away from the yoke of depending on foreign lenders who are becoming increasingly reluctant to fund hydrocarbon-related projects.

Sylva also expressed hope that the African Continental Free Trade Area (AfCFTA) would make it possible for well-established local manufacturing, operating and service companies to operate across the continent’s hydrocarbons industry without hitches.

In his presentation, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote hinted that the African local content roundtable is a key initiative of the Board’s Nigerian Content 10-Year Strategic Roadmap and the intent is to extend local content across the African continent and ensure access to market for capacities that have been developed locally.

He recommended that one of the strategies for growing local content in the continent would be to create an Africa Local Content Fund that could be utilised to set up a bank or finance institution to provide funding for the development of oil and gas projects in Africa.

He said the funding arrangement had become necessary, given the declaration of some countries and banks to stop funding hydrocarbon related projects in their push for a shift towards renewables.

“These funds can also be utilized to part-finance infrastructure projects in support of production and evacuation of oil and gas products for use by the African populace,” he added.

Wabote also emphasised the need for African oil producers to invest in research and development, insisting that no nation can develop by being a consumer of other countries’ technology and intellectual properties.

“Local content thrives where there are robust research and development guidelines to drive the development of home-grown technology.  Countries that have witnessed appreciable local content level such as Brazil attributed the growth to the priority attention given to R&D,” he stated.

On his part, Secretary-General, APPO, Dr Omar Farouk Ibrahim announced the plan by the association in partnership with the Organisation of Petroleum Exporting Countries (OPEC) and other like-minded bodies to demand the renegotiation of the climate change agreement during the upcoming United Nations Climate Change Conference (COP26) scheduled for November 2021 in Glasgow, Scotland.

He said: “Our position is that we have looked at the 2015 COP 21 Climate Change Agreement and we believe that there is a need for some review of some things that our leaders signed on our behalf.

“Oil is the mainstay of our national economies and we want the life of oil to last as long as possible to enable us to use the revenue to effectively diversify our economies.”

The Secretary-General said: “With proven oil reserves of over 100 billion barrels of crude oil still in our grounds and economies that are still heavily dependent on export oil revenue, African nations are not ready to forgo the production of those barrels and classify them as wasted assets.”

Ibrahim warned that the push implies that advancement in new technologies in the industry would grind to a halt in the next few years, financing of the industry would dry, the influx of capable hands and renewals of skills would also stop.