INVESTMENT opportunities in Africa’s booming oil and gas services industry is the focus of a special side-event taking place during UNCTAD’s World Investment Forum in Geneva.
UNCTAD’s annual African Oil, Gas, Minerals, Trade and Finance Conference(OILGASMINE), the first to be held outside Africa, took place on 15–16 October and brought together ministers and high-level government representatives, senior executives and experts from the oil and gas industry.
Global annual revenues from oil and gas field services are estimated to be about $160 billion a year and are forecast to reach $213 billion by 2017. The growing oil and gas field services sector provides great potential for local communities to benefit in terms of job creation, increased incomes, and improved related technical skills.
The OILGASMINE conference will be opened by UNCTAD Secretary-General Mukhisa Kituyi. It will raise awareness of investment opportunities in the oil and gas services sector and highlight value-added partnerships with host countries through case studies of Algeria, Kenya, Niger, Nigeria and Uganda.
The conference will also focus on policy options that increase the benefit to recipient African countries from investments in oil and gas field services.
The worldwide oil and gas field services industry is largely dominated by foreign service-providers, which have a large part of their business activities domiciled outside host countries. Even when services are performed in host countries there is low utilization of local service providers. Therefore it remains a major challenge to see to it that benefits from oil and gas field services trickle down to local communities.
In Africa, hydrocarbon resources are owned by governments represented by their national oil companies (NOCs). The NOCs enter into agreements with oil and gas service companies to develop and exploit the resources. This presents a win-win opportunity both for NOCs to gain technical expertise and management skills, and for service companies to expand their business.
Average annual capital and operational expenditure on procurement of capital goods, consumables and services by project operators in Africa is greater than total payments to government. Oil and gas field services thus provide an attractive avenue for local players to get involved.
Governments are improving the investment environment to attract investors into the sector, employing policy measures that encourage capacity building and negotiating contracts with service providers that include transfer of technology and project management skills.
Currently, demand for energy sources is driving the growth of oil and gas field services but this could reverse if the global economy slows down, credit markets weaken, and hydrocarbon prices fall, making oil and gas field operations less profitable. Developing countries therefore need to be aware of these risks.
Part 1 of OILGASMINE, taking place from 2.30pm to 6pm on 15 October, will be chaired by African Union Commissioner for Trade and Industry, Fatima Haram Acyl, Ethiopia.
Part 2 of OILGASMINE, taking place from 10am to 1pm on 16 October, will be chaired by Achille Bassilekin III, Assistant Secretary General in charge of Sustainable Economic Development and Trade, ACP Group, Belgium.
Confirmed speakers include: Ashutosh Shastri, Director, EnerStrat Consulting, UK; Etienne Hammann, Local Content Manager, Total E&P, France; Samuel Safo Tchofo, Executive Vice President, Consoltia, Cameroon; Benedict Okey Oramah, Executive Vice President, Afrexim Bank, Egypt; and Matthew Parish, Partner, Holman Fenwick Willan Switzerland LLP.
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