Initially launched as an initiative to boost Africa’s energy cooperation and attract investments into Equatorial Guinea’s oil & gas sector, the country’s Year of Energy has become a call to action for national oil companies to work together and services companies to be engines of jobs creation. As Malabo prepares to host the upcoming Oil & Gas Meeting Day on October 1st and 2nd, our Associate Attorney Anselmo Milam tells us why the Year of Energy is so important for Africa’s hydrocarbons industry and what a successful local content strategy looks like.
Shining a Light on the Energy Sector
Centurion Law Group is a pan-African corporate law conglomerate, with a specialized focus on cross-border business and energy law. With regional hubs in Equatorial Guinea, South Africa, Mauritius, Cameroon and Ghana, the firm distinguishes itself through its Africa-focused approach, helping clients navigate the legal and regulatory environments across the continent’s varied jurisdictions.
What is the Year of Energy and what does the initiative mean for Equatorial Guinea?
Equatorial Guinea’s Minister of Mines and Hydrocarbons, H.E. Gabriel Mbaga Obiang Lima, launched the Year of Energy in August 2018 — bringing some of the world’s top oil and gas events to Equatorial Guinea — with an aim to highlight the many opportunities the country boasts. Indeed, the timing of the initiative is quite perfect, as Equatorial Guinea not only emerges as a regional leader in Africa, but a strong leader in global oil geopolitics.
Equatorial Guinea is one of the newest members of the Organization of the Petroleum Exporting Countries and is committed to using its international voice to advocate for Africa’s interests. As a member of the Gas Exporting Countries Forum and the African Petroleum Producers Organization, Equatorial Guinea is perfectly positioned to reach across borders and boundaries — both physical and metaphorical — to unite the world’s oil and gas producers.
What is the role of local content in creating a sustainable energy industry in Equatorial Guinea and in Africa as a whole?
Local content is crucial in creating a sustainable oil and gas industry in every country on the continent; and in ensuring that a country’s natural resources benefit the people at every level. We’ve seen through decades of oil production in Africa that international oil companies typically don’t worry about skills transfer, technology transfer or building up local capacity unless it is required.
Fair, balanced local content regulation is the answer — creating a regulatory environment that both requires responsible transfers of technology and skills. However, the regulations must also be careful to not inhibit new investment, and this is the balance that Equatorial Guinea struck with its local content regulations.
Equatorial Guinea recently made the news for cracking down on companies not in compliance, which is necessary if the regulations are to drive real change. Additionally, Equatorial Guinea also implemented a pan-African approach to local content, prioritizing first Equatoguineans, then companies from CEMAC and then companies from all of Africa. This is an example for other African countries to follow as they seek to implement or reform local content regulations.
What are your expectations for Equatorial Guinea’s energy sector in 2019?
The outlook for Equatorial Guinea is positive, with $2.4 billion in FDI already projected for the year. The growth has been steady and sustainable, and the entire economy is recovering from the oil price crash of 2014. The government of Equatorial Guinea made good use of the downturn — implementing business-friendly policies and regulations, integrating globally and encouraging intra-African cooperation at every level. The new initiative LNG2Africa, in which Equatorial Guinea promotes LNG exports to African countries from African countries, is a great example.
Equatorial Guinea recently launched a ‘one-stop-shop’ for foreign investors in the country. Can you explain a bit about these programs? Why are they important for investors?
The one-stop shop solution was vital as the country seeks to attract investment. In years past, investors seeking to enter Equatorial Guinea were hindered by a long, complex and even confusing process of permitting and policies. Now, businesses can open in less than a week. The change is remarkable, and a true win for both investors, who can now enjoy the many opportunities in Equatorial Guinea, and citizens, who will reap the benefits of direct investment.
What is the significance of the seventh edition of APPO being held in Malabo? What will the impact of this and the Year of Energy be for Equatorial Guinea in terms of becoming a global energy player?
The seventh edition of APPO is actually a bit of a misrepresentation, as this meeting is one of the first meetings of the African Petroleum Producers Organization as a truly reformed organization. The structural reforms of the African Petroleum Producers Organization, as well as the rebranding from an association, represent a radical change in how African petroleum producers can cooperate together to achieve greater success. That the event is being held in Malabo is of course representative of the great role Equatorial Guinea has had in the reforms of APPO, and in the organization’s aims to become international and influential. Equatorial Guinea is a top oil producer, and has become a key leader for global and pan-African cooperation.