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Summary: Banker Africa sat with NJ Ayuk, CEO, Centurion Law Group and founding member of the African Energy Chamber of Commerce to discuss the role that the energy sector has to play in African growth

What role should the energy industry play on the African continent?

At the African Energy Chamber we want to advocate for strong market driven issues. We are not going to succeed in Africa by hurting those that are creating jobs and you cannot treat big energy companies or oil companies as some sort of foreign entity. These are investors, they are putting money in. We talk to policy makers and we talk to business community leaders and look at what energy companies do--they take the biggest risks. They go in and invest in exploration campaigns that may well yield nothing. Wells that are being drilled around Africa have only about a 17 per cent success rate, so you're looking at around 83 per cent of exploration operations failing. That's millions of dollars being poured into unsuccessful or non- commercial drilling campaigns.

However, even though these companies may come and invest we need to find ways to transition to local content. You cannot turn over that obligation for training, developing and empowering your people to a corporation. Corporations are corporate citizens, they are not your citizens. They are beholden to their shareholders, they pay their taxes and they are there to make profit. Governments have an obligation to their citizens that they have the right education, the right environment, the right training, the right skills. This is where more attention needs to be paid.

Where does the African Energy Chamber of Commerce fit into this conversation?

We are an advocate and an advisor. The Chamber is never going to be 100 per cent the friend of the government or 100 per cent the friend of the industry, at the end of the day the Chamber is going to represent the conscience of the African oil and gas industry and represent Africa's interests.

We are advocates on behalf of the entire energy sector, such as oil and gas, mining, power, but we are also strong supporters of local content, but this local content really needs to work. There's one thing I always say, you cannot come in and say, 'nationalise the oil sector' and 'kick out every European, American or Asian investor'. No, you have to work together, do joint ventures, transfer technology, empower local communities, create vehicles for them to become stewards of their economies so that there can be an actual transition between the big exports and the big European, American and Asian contractors with African contractors.

Our goal should never be kicking BP or ExxonMobil out of Africa, that's nonsense. That should never be the goal of any country or any people. The goal should be to Africanise ExxonMobil so that when you walk into the ExxonMobil office you see people wearing dashikis. People that will have worked in these companies where they have great training and great policies will be able to move from there and create great companies, whether they are the same oil company or create service companies that can provide services back to the oil companies and other companies. These skills are so transferable--you can take them into government, you can take them into other public and private sectors and really do well with them. That is the real essence of it.

For now though, government has a real role to play. You have to incentivise this transition of economies, you can no longer have economies where the majority of jobs of most African economies are created by government. When governments create jobs they create patronage jobs. You will see a president or minister announce that they are going to create 5,000 jobs--hiring teachers or labourers, but for what? For where? For them to work as security guards in buildings or for them to work as secretaries in government offices with nothing to do. It's not organic.

It's the government's obligation and job to make sure that the kindergartens, nurseries, primary schools, and universities are done well and that the base is there. You have to look at it as if the companies are adding value. If you have the foundation and everything is there, then these people can become the experts. What the oil company always tells you is that this person needs to have these certain sets of skills, so you collaborate with the oil companies--and that's what the chamber does. We bring in the oil company, the state, and the public sector and ask how do we collaborate to make sure that we work together to everyone's benefit.

Also, on the contract base, some of the European, American, and Asian companies have spent years building strong contractual bases. You want to encourage a transfer of technology, you want to encourage technology sharing, so you need to work with these guys. You're not going to take it by force, but you can work with them within this framework where they can share the technology, and everyone can benefit from it. It becomes something everyone can agree and can work with. It is all about developmental partnerships, not confrontation. You're never going to develop a country by employing a confrontational style against businesses, against your biggest investors in the country.

The energy industry worldwide, in Europe, in America, is faced with a long- term human resource gap. They are struggling so hard in Europe and America to find people because most of the oil men are retiring, they are moving away. Now, if Europe and America, where they have the most industrialised economies, the highest skills in the oil and gas areas, are suffering and having a hard time finding new people to step into technical substance skill- orientated oil and gas and mining and power jobs, what is going to happen to Africa? This is our time to compete, this is our time to prepare our people to be able to step up and compete and fill that gap because at the end of the day we still have to find new production, we still have to power your continent, and still need to use the best technical and safety skills to really ramp production. You will see economies that have not prepared and cannot sustain the skill sufficiency and growth that is required and will become more dependent and less competitive in the new global market.

What is role will women play in the energy industry?

Seven out of 10 graduates in science, technology, engineering are women today. That's an untold story that nobody talks about it. The female population is also outgoing men rapidly too. In about 50 years you're going to have a very dominate female population, so the question is how are we and how is the energy sector preparing for that.

Think about today. The African oil industry cannot be where it needs to be without a strong presence of women. There are only maybe one or two women CEOs of oil companies around Africa, that's it. In 2018 we should ashamed of ourselves. We should ashamed of ourselves because the role of women in this industry is really not being played right, it's underplayed, it's not talked about. More science students and engineering students coming out of college are women, so if you are really going to talk about a future that is strong, sustainable and reliable, how can you have that conversation without discussing the role of women in the industry.

Thoughts on the future?

The oil industry can no longer be some opaque hidden club sitting in cigar filled rooms and cutting deals whilst we are on the outside, we have to be on the inside. If the door is closed we will break it down and we will get in, we have to sit back there, sit at those tables, making core decisions. Transparency doesn't just mean for us alone, it means for everybody. We've got to level the playing field. If we have all these skills, education and drive and yet cannot work towards levelling the playing field and levelling the environment then we have not really met that challenge for my generation of Africans.

My generation has not accomplished anything in comparison to our descendants. Look at the age when Mandela went to jail. People at that age were forceful enough to give us our political liberation but our challenge is economic--to really create value and really hold leadership accountable

to make sure that they are not caught up in the same old games, that they are really trying to improve and empower economic and business transitions, we have to do that.

My generation, we have two emails, sometimes three or four, we have a Twitter account, Instagram, Facebook and WhatsApp and yet with so much technology, with so much knowledge and so many skillsets we are doing far less than our predecessors did. That poverty of ambition is what we have to really work against it. If you really want to change Africa, look at the natural sources. I never studied oil and gas at school, but I always drawn to that central message that if you want to make Africa better look after its natural resources because it is the cause of a lot of crises. Africa's problems can be fixed if you pay attention to its natural resources and get it right. If you get it right it will really keep crises at a low because most of the crises and fighting is over of natural resources, whether it be mining in the Congo, or oil in Sudan, South Sudan and the Niger Delta.

You start seeing that if you do natural resources very well, and when you get that industry correct, a lot of crises and political instability goes away. It's time for us to become important activists, and important stewards, and important drum majors for Africa in that industry, rather than sit back and be aloof and take a step back and wait for others to do for us what we can do for ourselves.

The African Energy Chamber

The African Energy Chamber (AEC), which had been advocating for several months for upstream producers, service providers, downstream suppliers and governmental bodies throughout the continent, was formally established in July 2018. Backed by executives from oil & gas, power, and renewables industries, the AEC looks to bring a voice to the continent's ongoing change and progression in the African energy industry.

As African nations revise their regulatory frameworks, such as the recent hydrocarbons regulations in Nigeria, Gabon and Congo, the AEC works to provide access to a pool of policy makers and experts to engage into a meaningful dialogue with industry stakeholders to shape policy. The AEC also services international companies seeking to invest or expand in Africa by providing them with inside-track information and contacts to ensure successful partnerships and market penetration and expansion strategies.



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Publication:Banker Africa
Geographic Code:60AFR
Date:Sep 13, 2018

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