8 September, 2011, Sweetcrude, Abuja – The first ever Oil and Gas Africa Financing and Investment Conference (OGAFIC) holding in Nigeria’s Federal Capital, Abuja, in November will be focusing on how to mobilise resources within the African continent to meet about US$8 trillion new investments.
Specifically, the conference being organised by the African Petroleum Producers Association (APPA) Fund for Tchnical Cooperation in conjuction with Nigeria’s Ministry of Petroleum Resources, is designed to serve as a platform for enhancing oil and gas investments in the African region by bringing together all stakeholders in the industry.
Executive Director of African Petroleum Producers Association (APPA) Fund for Tchnical Cooperation, Dr Babafemi Oyewole, said in Abuja at a media briefing to announce the forum that the conference was necessitated by the need to galvanise strategies for mobilising the financial resources required for the development of the oil and gas industry in Africa.
Underlinng the need for the continent to harness its potentials in sourcing finances for investment in oil and gas sector, Oyewole argued that although efforts are on to develop alternative energy sources to reduce global dependence on hydrocarbons, oil and gas resources will still continue to play important and strategic roles in the economic development of oil and gas producing African countries as a major export product and source of foreign exchange.
He added: ‘There is no doubt that the current global economic and financial situation is posing tremendous challenges to the financing of investment opportunities in member countries due to intense competition from either regions of the world and reduced inflow of foreign direct investment. African needs to understand these issues and design workable policy responses to ensure a sustainable development of this strategic economic sector.’
He further noted that the participation of African financial institutions has been very marginal because of the capital intensity of investment projects in the oil and gas industry.
To encourage African financial institutions’ participation, he said the congress of APPA would, seek to analyse and generate ideas on the role financial institutions can play in developing the oil and gas industry in Africa with respect to financing investment projects through several ways.
These include joint-financing of strategic oil and gas infrastructure such as pipelines, strategic stocking facilities; joint-ownership participation in oil and gas projects. Aside from providing credit facilities to strategic projects, the financial institutions could also cooperate to take equity positions in oil and gas projects.
There could also be joint-mobilisation of domestic and foreign financial resources for financing oil and gas projects, probably in partnership with other international multilateral or bilateral financing institutions and co-financing of studies and research projects that are aimed at increasing the production capacity and reserve position of Africa in the global oil and gas resources.
Oyewole argued that while the last few decades have seen Africa’s hydrocarbons industry witnessing a renaissance with major new producing countries apperaring on the global production map and several others due to come on line in the next few years, investment is still vitally needed in the upstream, midstream, downstream and ancillary projects in order to fully utilise Africa’s oil and gas potentials and at the same time increase its share of global reserves and production.