Africa is increasingly taking ownership of its own energy destiny in the private sector space. But, just as importantly, it also develops the policy and regulatory tools that support economic self-determination.
Nowhere is this more evident than in Nigeria, where the long-awaited enactment of the Petroleum Industry Act (PIA) last year is poised to unleash the vast potential of the national and regional energy sector.
The act legislated the creation of two regulatory bodies to oversee critical parts of the industry. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) will be responsible for the technical and commercial regulation of petroleum operations in their respective sectors.
Upstream includes resource exploration, as well as drilling and operating wells for crude oil and natural gas. The midstream sector generally refers to the transport and storage of petroleum products by pipeline, barges, tankers or trucks, while the downstream petroleum sector mainly concerns the refining and processing of petroleum and natural gas as well as the marketing and distribution of petroleum products. end products to consumers.
The creation of these regulatory bodies will provide a rich space for engagement with industry associations representing companies that help move the industry forward. One of the largest of these is the Petroleum Technology Association of Nigeria (PETAN), an association of Nigerian oilfield technical service companies that straddle the upstream, midstream and downstream sectors.
This long-established association brings together Nigerian oil and gas entrepreneurs specifically for the exchange of ideas with key operators and policy makers, and to help develop Nigeria’s petroleum technology industry for the benefit of Nigerians.
Under the leadership of President Nicolas Odinuwe, PETAN seeks to support and strengthen the involvement of local businesses in the Nigerian petroleum products sector.
Across all sectors, there has long been talk of the need to improve Africa’s beneficiation capacity, help the continent transition from being a commodity producer and reverse the age-old pattern of developed countries exploiting Africa’s resources and then processing them elsewhere for huge gain.
PETAN is at the forefront of helping Africa achieve this in the oil sector. He describes himself as “the originator of local content in Nigeria… championing the quest for increased local participation in the Nigerian oil and gas industry”.
As an association focused on local content, PETAN also has a role to play in the regional context, ensuring that Nigerian companies are equipped to win international or regional tenders for the processing of raw materials such as than crude oil and natural gas.
In the oil industry, there are already many situations where an owner of shallow water assets in Nigeria could hire a European company to service their wells, although there is a local supplier who can do the same.
The key to overcoming this misalignment lies in continued communication from the industry, to ensure the standardization of local content so that it meets local needs, thereby stimulating private sector participation in national production.
The establishment of Nigeria’s new regulatory bodies offers an exciting opportunity to drive this kind of intra-industry partnership and help build an African energy industry characterized by mutual benefits, instead of unequal power relations.
A key forum for this kind of engagement will be the upcoming Africa Oil Week in Cape Town (AOW), the global platform to boost deals and dealings across Africa’s upstream.
The event brings together governments, national and international oil companies, independents, investors, the geological and geophysical community and service providers.
In this context, the African Union Strategy for an African Continental Free Trade Agreement aims to create a single continental market for goods and services, with the free movement of capital and investment.
A better integrated African energy sector can be a major driver of this vision, with, for example, Nigerian companies partnering with Angolan energy projects and vice versa. In the long term, it is possible to establish a semi-autonomous oil and gas industry that delivers products to domestic and foreign markets on its own terms.
Achieving this milestone requires ongoing communication and strategic engagement. The foundations for this are laid through the development of progressive policies and regulations. To take its rightful place as an energy power, Africa must continue to engage and partner across national and regional borders.
About Africa Oil Week
Africa Oil Week (AOW) will take place from October 3-7, 2022 in Cape Town, under the patronage of the Department of Mineral Resources and Energy, with the theme “Sustainable Growth in a Low Carbon World”. AOW will champion the importance of hydrocarbon development in Africa and the sustainable development of oil and gas. AOW is the global platform for deals and transactions across the African upstream. The event brings together governments, national and international oil companies, independents, investors, the G&G community and service providers, offering unparalleled investment and deal-making opportunities to help shape the future of Africa.
Group Account Director, AOW at Ogilvy PR South Africa
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Vice President of Energy and Director of Government Relations, Africa Oil Week and Green Energy Summit Africa
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(Devdiscourse journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse claims no responsibility for them.)