The panel highlighted the importance of coordination and unity among petroleum producers in returning stability to the market, as African member states strengthen their position within the global organization.
Volatility of oil and gas prices during the COVID-19 crisis and ongoing gas supply shortages from Russia have underscored the necessity of increased global synergies within the hydrocarbon sector. On day two of African Energy Week 2022 in Cape Town, the OPEC-Africa Roundtable Session advanced discussions on the growing role of African oil producers in the Organization of Petroleum Exporting Countries (OPEC). Moderated by NJ Ayuk, Chairman of the African Energy Chamber, the panel was chaired by H.E. Bruno Itoua, President of OPEC and Minister of Hydrocarbons of the Republic of the Congo and co-chaired by H.E. Haitham Al Ghais, Secretary General of OPEC. The panel comprised H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea; H.E. Puot Kang Chol, Minister of Petroleum of South Sudan; Dr. Omar Farouk Ibrahim, Secretary General of the African Petroleum Producers Organization (APPO); Dr. Adedapo Olaoye Odulaja, Special Adviser (International Energy Relations), Ministry of Petroleum Resources of Nigeria; and H.E. Mahamane Sani Mahamadou, Minister of Petroleum, Energy and Renewable Energies of Niger.
Representing a group of 13 oil-rich countries that hold nearly 40% of global oil supply, OPEC plays an integral role in oil market stabilization. In the wake of COVID-19 and tumbling oil prices, coordination and unity among petroleum producers has proven key to returning stability to the market, with OPEC+ members taking the unanimous decision just this month to remove two million barrels per day from the global market .
“We aim to provide stable, secure, long-term, sustainable supplies of oil and energy to the world,” stated H.E. Haitham Al Ghais, Secretary General of OPEC. “When we talk about investments, Africa has an abundance of resources – not just oil and gas, but also minerals. The potential here is massive. On top of all of this, it has a young population who is thirsty for jobs and a better future. Kuwait has oil, Nigeria has oil. Why should someone in Kuwait have more than someone in Nigeria? It’s time that Africa moves up to the next level.”
“We have the same position regarding oil and gas since the last meeting of OPEC,” said H.E. Bruno Jean-Richard Itoua, President of OPEC and Minister of Hydrocarbons of the Republic of the Congo. “The only purpose we have is to provide not only for ourselves, but also for the world, and to provide market stability. The oil market is very volatile. To ensure market stability is interesting for producing countries, for African countries and for consumers.”
“There are two major events happening in the world today: the Russia-Ukraine conflict and the China-U.S. economic war,” said H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea. “Africa is for peace, in the same way that OPEC is for peace. All that members want is a stable market. It’s not about price.”
On a continental level, COVID-19, the global energy transition and Russia-Ukraine war have created conditions for enhanced cooperation between Africa and OPEC, with market stability remaining critical for African producers that depend on crude oil exports for the lion’s share of their GDP and foreign exchange earnings. The Organization has welcomed new African members in recent years – such as Equatorial Guinea in 2017 and the Republic of the Congo in 2018 – and recognized the growing influence of African oil globally, presenting a unique chance for African producers to reinforce their position on the global energy stage. As sub-Saharan Africa’s third-largest oil producer, the Congo assumed the OPEC rotating presidency in 2022, succeeding Angola.
“The smallest producer in OPEC, in terms of barrels per day, is Equatorial Guinea. But the smallest producer is going to be the rotating president of OPEC next year,” noted H.E. Secretary General Al Ghais. “OPEC members have an equal voice at the table. Decisions are made unanimously. No one dicates or coerces anyone to do anything.”
“Niger started producing just a few years ago, at just 20,000 barrels per day,” said H.E. Mahamane Sani Mahamadou, Minister of Petroleum, Energy and Renewable Energies of Niger. “From next year, we will start exporting our crude oil and are looking at a production of close to 100,000 barrels per day. This is a game-changer. It is very important for Niger to sit at the decision table. Sitting at the table, having the information and being part of a family that looks out for every member’s interest is crucial for us.
Angola and Nigeria, for their part, represent sub-Saharan Africa’s two largest oil producers – the former of which relies on its offshore petroleum industry for 75% of government revenue and 90% of exports. OPEC has subsequently played a critical role in both countries, primarily in preserving falling oil prices with recent production cuts; providing political and economic will to member countries on the global energy stage; and prioritizing social welfare programs via oil dividends.
“Nigeria joined OPEC in 1971. For 51 years, Nigeria has not broken its membership,” said Dr. Adedapo Olaoye Odulaja, Special Adviser (International Energy Relations), Ministry of Petroleum Resources of Nigeria, speaking on behalf of the Minister. “The decision taken by the OPEC+ during our meeting in October 2022 to voluntarily adjust crude oil production downward by two million barrels per day was unanimous. It was taken for the exclusive purpose of ensuring the long-term stability of the oil market.”
As the global oil and gas industry continues to face disruption, Africa is looking to take advantage of OPEC’s renewed focus on coordination and inclusive cooperation, as demonstrated by historic agreements signed with OPEC members as well as non-members. Accordingly, other African organizations such as the African Petroleum Producers Organization – which holds seven of the same member states as OPEC – voiced their support for the decision to cut global oil output.
“As an organization, we totally support OPEC on this issue for the simple reason that if you allow the price of oil to slide to a level that no one is going to invest in the industry, then when you come to need it, you won’t find it,” noted Dr. Omar Farouk Ibrahim, Secretary General of APPO. “The problems we are having with stability started in 2014 before the Russia-Ukraine conflict, when prices went below $30 per barrel and made the number of investors run away. When you invest in oil, you don’t invest today and get your oil tomorrow. It takes a long time. The only way is to guarantee some level of stability in the market for producers, investors and consumers.”
