AFCFTA:Cross-border Service Integration Will Boost African Oil And Gas Industry — Chief Lulu Briggs
- 1 Oct, 2022
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The Chairman of Platform Petroleum Limited, Chief (Barr.) Dumo Lulu Briggs, has admonished that cross-border service integration through the implementation of the African Continental Free Trade Area, AfCFTA will boost the African oil and gas industry.
Briggs who spoke on the theme ‘AfCFTA: Cross-border service integration as enabler of project delivery in the African oil and gas industry’ at the African local content collaboration session at the 2022 Offshore Technology Conference in Houston Texas, United States of America, noted that AfCFTA represents a new optimism and the continental approach at comparable scale is expected to have greater success in Africa.
“Hopefully, collaborations would improve the intra-Africa trade flows which is a poor 15% compared to North America (48%), Asia (58%) and Europe (67%). Although recorded trade underestimates the volume of actual trade and if proper account was taken of the size of the informal trades, the African numbers would not look so out of line.
Nevertheless, this statistic confirms that Africa trades with the rest of the world, not with itself, a trend which the AfCFTA aims to revolutionise through the creation of a single market for free movement of goods, services, and persons,” he said.
According to him, Africa can learn from the 10-member Association of Southeast Asian Nations (ASEAN), which became the largest economy globally with the 3rd largest labour force in the world in 2017 during its 50th anniversary.
While commending the organisers of the session for bringing together oil and gas producers, service providers, regulators, government officials, local content advisers, lenders, members of the academic community and other stakeholders to dimension the opportunities and challenges faced by the industry and to identify promising approaches to the implementation of cross border service integration and customs union, Chief Briggs opined that of the 15% of trade reported as intra-Africa, Oil and Gas is estimated to account for 75%, indicating that the industry is central to the prosperity of the continent and can become an enabler for other sectors.
“Removal of trade barriers will not only improve efficiency, enhance competition, and incentivise development of strategic solutions to local challenges through regional economies of scale, but essentially advance the efficacy of resource allocation.
Regional integration is pivotal to ensure that energy resources get from localities where they are most affordable, to where they are required.
A key anticipated outcome of the agreement is the acceleration of industrial output that would depend on the availability, affordability and security of energy supplies at a scale for industrial growth,” he added.
Chief Briggs said the passage of the Petroleum Industry Bill into Law on August 16, 2021 will help to reform and improve the competitiveness of Nigerian Oil and Gas industry as well as attract the needed Foreign Direct Investment for growth.
He called on African financial institutions, including investment banks, commercial banks, development financial institutions to collaborate in order to provide the requisite capital to support oil and gas projects on the continent.
“Nigeria alone would require about $20 billion annually to sustain a 3 million barrels of oil per day output and increase gas production to circa 8 billion standard cubic feet per day to meet its demand.
With huge oil and gas reserves, government incentives for Oil and Gas Investments as demonstrated by the recently passed Petroleum Industry Act 2021, increasing competitive gas pricing, attractive Return on Investments (ROI) and deepwater fiscals and the availability of investments opportunities (open bid rounds, marginal fields, divestments, etc.), and strong presence of exploration and development activities with highly qualified E&P professionals in critical mass, Nigeria is ready.
The stage is set for greater trade collaboration in Africa and our industry cannot afford to be left behind,” he said.
The astute technocrat warned relevant agencies to ensure the success of AfCFTA to revolutionise the continent.
He warned that, “we must avoid a situation where, because of trade and custom barriers, Benin Republic would rather import Cement from France instead of trucking the cements across the border from Dangote Cement.
In the same vein, Aliko Dangote had to wait for a couple of weeks to obtain a visa for a business meeting in an African country whereas his business partners for the same meeting were able to obtain the same visa on arrival.
This must be nipped in the bud and must never happen again”.
Story: John Ikani.
Edited: clevenard news.