The African Petroleum Producers Organisation (APPO) has floated the African Energy Bank with $5 billion capitalisation.

The project feeds into the continent’s move to break away from hurtful dependence on foreign lenders who are becoming increasingly reluctant to fund hydrocarbon-related projects.

Mr. Omar Farouk Ibrahim, Secretary General of APPO,  disclosed this at the Nigerian Local Content African Continental Free Trade Agreement (AfCFTA) Energy Summit organised by the Nigerian Content Development and Monitoring Board (NCDMB) in partnership with the Petroleum Technology Association of Nigeria (PETAN) in Lagos.

The APPO Scribe announced that the African Energy Bank will start operations in 2024, adding that the 18 member nations of APPO have started paying up their shareholding, which is $83 million per country.

He affirmed that the African Energy Bank would be a veritable platform to fund oil and gas projects within the continent and mitigate the withdrawal of international financiers because of the clamour for renewable energy.

Ibrahim also confirmed that APPO was working to establish international research centres of excellence in different regions of the continent, which would cater to the research needs of oil companies operating in Africa and curb their dependence on international research centres for research solutions.

He stated that APPO is working to enhance the market for African oil and gas resources and ensure that crude oil and gas resources that are produced in Africa get consumed within the African continent.

He explained that the move by APPO is important because of the threat of energy transition, which is expected to substantially shrink the demand for crude oil and gas resources internationally.

‘‘Another important and related action is the construction of a continent-wide pipeline system that could convey crude oil, refined products, and gas across different countries of the continent,’’.

The APPO boss advocated for synergy among African countries, hinting that no African oil-producing country can provide the financial, technological, and marketing resources that it needs to be self-sufficient, adding that “if resources are pooled together, African countries can go far”.

He advised Nigerian oil and gas companies to be diplomatic when engaging their counterparts from other African countries and to co-opt other nationals when planning to operate in foreign jurisdictions.

“You need to have diverse shareholding and include nationals from other countries when you move to other African countries to operate. Do not create the impression that you want to dominate.”

Earlier in his remarks, the Executive Secretary of NCDMB, Mr. Felix Omatsola Ogbe, advocated the removal of visa restrictions among African nations, the creation of a database of available skills, and the simplification of cross border deployment of labour.

Represented by Mr. Ama Ikuru, the Director of Corporate Services, NCDMB, the Executive Secretary harped on the need to unlock barriers that are inhibiting free intra-Africa trade and advised African leaders to create unified codes and standards for goods and services, reform the services sector, and enhance trade facilitation programmes.

He assured that the NCDMB will continue to partner with stakeholders such as PETAN, APPO, and other continental and regional bodies to position Nigerian oil service providers to take advantage of the big market opportunities that AfCFTA offers.

Speaking at a panel session at the summit, the Director of Finance and Personnel Development, NCDMB, Dr. Obinna Ofili, expressed worry over the financing prospects of some key initiatives of AfCFTA.

He equally observed that the ongoing geopolitical conflicts were affecting the inflow of international funding into the African oil and gas industry.

He recommended that APPO should develop a financial strategy for its strategic plans and should mobilize funds from different sources, including from international financiers.

Ofilli advised other African oil-producing countries to setup a financing programme like the Nigerian Content Intervention Fund (NCI Fund), to support the growth of their local supply chain.

In his contribution, the Director of Monitoring and Evaluation, NCDMB, Mr. Abdulmalik Halilu, urged oil-producing countries to specialise in different manufacturing and service areas of the oil and gas industry and develop their competencies to the right specifications, so they can trade among themselves.

Citing an example with the manufacturing of complex equipment where the critical components are produced by different original equipment manufacturers (OEMs) and assembled at a designated factory, Halilu explained that such a model will ensure that each African country develops a competitive advantage and can contribute effectively to the African oil and gas industry.

He hinted that Nigeria had already completed two Oil and Gas Parks where manufactured components or services can be assembled at competitive costs.

He stressed the need for close collaboration among African oil-producing countries as well as between African OEMs to enable the success of AfCFTA.

Halilu listed other critical factors as trade liberalisation, uniform standards, measurements, and enforcement tools.