Business Hilights
Tracking Nigeria's Headline Business News Online

‘African new oil, gas discoveries may be derailed by cost of new drilling technologies’

Whereas 2019 may be described as Africa’s year of new finds in both gas and oil deposits in commercial quantities, however, the observed high cost of latest exploration technologies may be a big minus in efforts to tap the resources from 2020.

This was the observation of President Muhammadu Buhari at the Extraordinary Session of the Council of Ministers of African Petroleum Producers’ Organisation (APPO), in Abuja weekend.

Buhari, represented by the Minister of State for Petroleum Resources, Chief Timipre Sylva, blamed the group for not doing much in finding solutions within Africa to explore gas and oil resources seamlessly.

According to him, “APPO, which was set up to provide a platform for cooperation and collaboration as well as knowledge and competencies sharing among African oil producing countries, has not achieved mush in these regard over the years as exploration solutions are still foreign”.

He recalled that the meeting of the group in Abuja last year which was designed to reform activities is yet to meet targets, saying APPO is currently looking to also reform its fund for International Development, renaming it as African Energy Investment Corporation (AEICORP).

However, as a way of getting out of the woods, APPO Council of Ministers had agreed to open up equity ownership to private and financial institutions with recapitalization of equity to $1 billion and the establishment of a new Board of Directors with membership from both the public and private sectors.

In his advice, President stressed that the importance of the recapitalization so as to enable Africa key into the global paradigm, shift away from oil as energy source, particularly as investment funds are fast drying up for the oil industry.

According to him, “This is happening at a time Africa is finding more and more oil and gas. Without the required funds, these reserves will remain in the ground, untapped and un-accessed, while our people go without energy.

“I want to encourage our members’ countries to make equity subscription to AEICORP in order to ensure consequential investment by Sovereign Wealth Funds, National Oil Companies or any other designated organizations of Existing Members and Non members of APPO, African/International Private Banks, Financial Institutions, and African/International Private Investors.