The current pandemic situation and associated energy demand fall are creating conditions for greater cooperation between Africa and the Organization of Petroleum Exporting Countries (OPEC). OPEC has welcomed new African members in the last few years and recognizes the growing influence of African oil globally. That’s the reason why, African countries have a unique chance to reinforce their position in the world’s energy sector.
Looking at the on the global oil and gas sector, Africa is coming forward to take advantage of OPEC’s new focus on coordination and inclusive cooperation, as demonstrated by historic agreements endorsed with OPEC members as well as non-members. The African continent could benefit from its growing petroleum influence to have a powerful voice in the organization.
In the last few years, Africa has shown its commitment to being essential part of the organization’s discussions. Sudan and South Sudan joined the historic ‘Declaration of Cooperation’ in 2016. During the Third OPEC and Non OPEC Meeting in 2017, Chad, Congo, Egypt and Uganda issued declarations of support to the decision to revise the ‘Declaration of Cooperation’ to take effect for the entirety of 2018. The fourth OPEC and non-OPEC Meeting in 2018 saw the participation of four new countries – all African: Chad, Egypt, Uganda and South Africa.
The years ahead will prove to be decisive for the growth of OPEC and Africa’s cooperation as the world finds itself in an unprecedented health crisis associated with slowed economies and low demand for oil. In this context, African countries and OPEC will work together to increase international dialogue, trigger an investment influx into Africa and encourage operators to initiate ventures in high production potential areas.
Africa stands as an underexplored territory and boasts a recognized potential for oil production. Continuous discoveries in Nigeria, Senegal, Equatorial Guinea as well as revamped exploration strategies are making of the African continent an increasingly attracting investment destination. As markets develop, the level of perceived risk diminishes, and appetite grows.
While intra-African cooperation is crucial expect to developing the domestic market and expand local capabilities, the oil and gas stage is global and requires cooperation outside the continent’s borders. Upon pursuing OPEC membership in 2017, H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons Equatorial Guinea said the country would use OPEC as a “platform to advance the interests of all African oil and gas explorers and producers and all OPEC members.”
As the global market slowly begins normal activities to pre-pandemic levels of demand and operators gradually proceed with halted or delayed projects, Africa is set to be more involved in international discussions. OPEC’s tremendous influence on global oil market stability has been yet again determined through its historic latest agreements and with it the organization’s commitment to cooperation and unity. The goal of African producers is now to keep the relationship strong through improved business environments, attractive policymaking and continuous participation in OPEC’s initiatives.