Utilizing Local Content and International Collaboration to Deliver Global Standard Solutions Locally

Equatorial Guinea was under the spotlight on day three of the African Energy Week, sub-saharan Africa’s largest energy event, as the country establishes itself as a leader amongst African oil producers in the development of a capable and well established indigenous oil and gas services industry.

With international players already having a notable presence in the country, Equatorial Guinea has redirected its attention to enhancing its domestic oil and gas companies, calling for increased collaboration with international companies to help drive capacity.

The positive impact of these efforts were the topic of the debate held during a country spotlight session on Equatorial Guinea that investigated how the country is utilizing local content and international collaboration as a catalyst for sustained growth for the industry, positioning the sector as a world class market. Panel participants included H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea; Samuel Diminas, COO, Bay Matrix; John Hamilton, CEO, Panoro Energy ASA; Lloyd Manokore, Consultant, LMA Services; Ian Cloke, COO, Afentra; and Mónica M. Bennett, Senior International Client Development Manager, Southern Alberta Institute of Technology.

During the spotlight session, speakers discussed the long-term impact of COVID-19 on local content and capacity building in Equatorial Guinea, drawing attention to how the pandemic has served and continues to serve as an opportunity for enhanced local content development.

“We are extremely happy because just with our personnel we were able to not only maintain production but increase production. Equatorial Guinea has already gone through the first phase of the oil and gas industry: convincing investors that there is oil and gas in the country; having institutions and Ministries to understand how this industry is done; and having the capacity to do it,” stated H.E. Gabriel Lima.

“The consequences of the energy transition is that it is accelerating the trend of large international oil companies divesting, enabling local companies to take over. We have this situation where larger oil companies are divesting. That is a real challenge and incredible opportunity for local companies,” stated Hamilton.

“Last year when COVID-19  hit we were expected to shut down for 6 weeks, but in the oil and gas industry you saw production increase. In the future, you don’t need a lot of expats flying in, you have a lot of great workers here. Energy transition is a journey, and it will take quite a while, taking different paces. Europe is trying to run before it can walk. From an African perspective, local companies can learn from mistakes being made elsewhere. Africa is incredibly innovative. We call it the industrial transition. it isn’t something we should be scared of.  We look at Africa and see opportunities. You can drive value for host companies and create employment,” stated Cloke.

Meanwhile, Equatorial Guinea firmly believes in the value of local content and is calling on international players to scale up their capacity building and skill transfer in the country. With significant experience, technical know-how, and a skilled workforce, global energy players have emerged as the best partners for Equatorial Guinea’s indigenous companies. Accordingly, speakers discussed the opportunities for public-private collaboration to foster skill building and knowledge transfer as well as the local content law that is in place.

“We have a lot of well-trained people in terms of economic training. So many people have international degrees. The problem is, in order to develop a high-level industry you need experience. Today we have a global pool. If you are looking for an engineer, you will look for the best person in the world. Contractors in Equatorial Guinea do not have the level of expertise. So we need more opportunities and collaboration with the public and service providers to sort out continuous opportunities,” stated Diminas.

“We have worked with the Ministry, and it has been a great example of sectors working together. It is critical to have the industry and the Ministry involved to select the correct programs that need to be driven in the country. Equatorial Guinea has taken an excellent approach by having their own institution and reaching out to international institutions for knowledge transfer. I have seen many countries sending people abroad, but you also have to build capacity and they have made a great effort on that,” stated Bennett.

“I believe it is one of the best local content laws on the continent. Without the law, we wouldn’t have what we have today,” stated Manokore.

Equatorial Guinea is rapidly becoming an African leader in gas monetization and utilization. During the panel discussion, H.E. Gabriel Lima introduced key insights into the country’s new Hydrocarbon Law.

“The modification in law will enable us to have more clarity within the oil and gas industry. One of the primary things is having clarity about gas. Our real transition is to change priorities from oil to gas,” stated H.E. Lima.

According to H.E. Lima, various components were addressed in the law, including LNG being identified as the solution to creating more jobs and adding value to the industry, the clarification of local content, the discussion on fiscal incentives, abandonment of oil fields, the transfer of assets, operational boosting and, particularly, linking the mining sector with the oil sector – something considered as a critical part of the transformation into the phase two – driving investment.

Equatorial Guinea is making considerable efforts to enhance local content, with local capacity seen as a catalyst for enhanced socio-economic and energy sector growth. The local content law, coupled with the new hydrocarbon code, will only further accelerate capacity building in the country.

Distributed by APO Group on behalf of Energy Capital & Power.

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