Stakeholders Discuss Gas Monetization and Energy Poverty During Oil Industry Business Forum In Equatorial Guinea

As global pressures mount to transition to cleaner sources of fuel, Africa continues to struggle with high energy poverty and slow rates of economic growth. To mitigate this, and correspondingly reduce carbon emissions, Africa is committed to utilizing every energy resource at the continent’s disposal, and natural gas has emerged as the most suitable. In regard, speakers during a panel at the Malabo Business Breakfast discussed energy transition, energy poverty and gas monetization.

Under the theme, Gas Monetization in Africa and Energy Poverty, speakers included Oscar Garcia Berniko, Director of State Entities, Ministry of Mines and Hydrocarbons, Equatorial Guinea; Antonio Oburu Ondo, CEO, Gepetrol; Abdur Tunde Omidiya, Midiya; Managing Director, QSOL; Justino Evuna Akogo; Deputy Commercial Director EG LNG; and Fidel Nzeng Envo; Vice President, Kosmos Equatorial Guinea.

As Equatorial Guinea progresses with its national development plan to capture domestic and regional gas reserves, processing these reserves and then distributing them across Africa, the speakers emphasized the progress made as well as the role gas-to-power will play in electrifying Africa. According to Berniko, “If you look at Africa, there are great gas opportunities that can be used for production through power plants to turn gas into electricity. Equatorial Guinea has about 67% energy access. We have done a great job since 2012 and the turbogas plant has added to this and has developed the use of natural gas for local consumption.”

With gas-to-power playing a role in addressing energy poverty in Africa, the panel discussed the intersection of energy poverty and energy transition, emphasizing that Africa needs to prioritize economic development before the continent transitions to renewables.

“If you look at energy poverty globally, you can see that the energy access and security in Africa is the least in the world. More importantly, Africa is a major gas exporter. Why is Africa still having energy poverty while gas is being flared?,” stated Omidiya, adding that, “We should use all forms of energy to meet our demand in Africa. We need to do more to develop our gas networks. There are ways to bring in LNG technology and move LNG by road. It is time to look at the African Continental Free Trade Agreement and capitalize on the gas mega hub, bringing gas onshore and distributing it across Africa. Gas to power is industrialization, it is more than generating electricity. It is used in steel, cement and fertilizer industries. It is the best low carbon source. In a few years we will not be talking so much about net-zero and decarbonization, we will be talking about low carbon energy sources like gas.”

“Climate change in conjunction with the reduction in carbon footprint is a crucial issue in the industry right now. The energy transition is real, but we have to note a few things. USA, EU and other developed countries produce 91% of carbon emissions. Forty-eight countries in sub-Saharan Africa produce around 1.5% of emissions. We need to get our economy to a certain level. The only way to do this is to get the resources from oil and gas. we cannot say that Africa needs to put aside the oil and gas resources. it does not make sense, where will we get the money for solar panels and to finance really expensive renewable projects? Gas is clean energy so let’s develop this,” stated Envo.

In strengthening the role and utilization of gas in Africa, there are a number of challenges that need to be addressed and steps that need to be taken. Specifically, implementing integrated tools, improving ease of doing business and introducing regulatory reforms will be critical.

“African countries need an integrated tool in the energy plan. The role of this tool is quantifying the points and locations that need energy. Then apply the necessary scale of natural gas projects to these points. Without this national tool, energy poverty will continue being a problem,” stated Ondo.

“Our development plans for the time being are dependent on our natural resources. It is integrated in our economy. It also gives us social and political stability. Our problem in Africa is not to start the energy transition but to see how to eliminate energy poverty,” Akogo noted.

“Because of the current regulations in terms of banking, international companies are forced to use local/CEMAC banking systems, this is very challenging. To get future investments into Equatorial Guinea, our local banks need to move with the times and develop their banking systems to suit the needs of their customers. The financial services sector needs to improve its communication and banking services, this is especially critical for the hydrocarbon sector where we are planning to increase hydrocarbon use and we need to negotiate contracts and sign agreements, all of which rely heavily on the financial sector,” Envo said.

“The challenges posed by BEAC Forex that is destroying SMEs in the region has made CEMAC region unattractive for foreign direct investments. Most of the players agreed that something urgent must be done to find a solution to said problem” Stated Leoncio Amada Nze, president at African Energy Chamber CEMAC

“Pragmatic and market driven, Local content rules need to be encouraged to create local and regional champions that would help create jobs and boost the regional economy” Continue Amada Nze.

“Now more than ever, we need to find ways to involve local and regional banks in big oil projects by putting together partnerships with western banks that are already embedded in IOCs financing schemes. We can’t continue the process of leaving African financial institutions out of deals”. Concluded Amada Nze

Distributed by APO Group on behalf of African Energy Chamber.

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