By John Ikani
The Petroleum Technology Association of Nigeria (PETAN) has taken bold steps in expanding the African local content agenda to maximize cross-border collaboration in the upstream, midstream, and downstream sectors.
The move is a part of efforts geared towards unlocking new opportunities for the upcoming Sub-Saharan Africa Petroleum Exhibition and Conference (SAIPEC) taking place on 20 – 23 February 2023 in Lagos.
The importance of local content in Africa has been a major talking point at SAIPEC and PETAN. It is also of great interest to the Nigerian Content Development and Monitoring Board (NCDMB), other government representatives, as well as industry stakeholders from Nigeria, Uganda, Kenya, Gambia, Namibia, Sierra Leone, Angola, Mozambique, Tanzania, Somaliland, Gabon, Ghana and Mauritania as conversations centred on achieving sustainable economic growth and development of the African Continental Free Trade Area (AfCFTA) are ongoing.
SAIPEC, being hosted by PETAN, is a multilateral platform showcasing the Sub-Saharan Africa oil and gas potentials and project opportunities. It plays a key role in charting the pathway to developing the Continent’s untapped energy, oil, and gas resources, representing more than 15 NOCs, governments, and regulators, with over 5,000 delegates drawn from 41 countries, including government parastatals, exhibitors, and speakers.
“Sub-Sahara Africa is said to be the last energy frontier and global hub, noting that the key enabler is to create a collaborative ecosystem between the local industry stakeholders within the Sub-region alongside the Africa continental free trade Area (AfCFTA),” Mr. Nicolas Odinuwe, PETAN Chairman, said during the 2022 SAIPEC.
“The value chain in the oil, gas and energy industry is such that if properly harnessed, will transform the economy of the entire continent. The challenge has been an enabling environment to create a private sector-led industry. Governments across Africa, especially the Oil and gas-producing sub-Saharan countries, should provide necessary incentives to attract private-sector investments across the entire value chain. This will trigger a massive economic revolution, human capital development and deepen local content across Africa”.
The Africa Continental Free Trade Area is an exciting opportunity in the Continent. AfCFTA, the largest global free trade area, aims to be a model of cross-border cooperation in an era of growing isolationism. It is projected to lift around 68 million people out of poverty and make African countries more competitive.
According to a report, Africa accounts for just 2% of global trade. And only 17% of African exports are intra-continental, compared with 59% for Asia and 68% for Europe. The potential for transformation across Africa is therefore significant. The AfCFTA will create the largest free trade area in the world measured by the number of countries participating. Connecting 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at $3.4 trillion.
In another report, the United Nations Economic Commission for Africa (UNECA) predicted that the AfCFTA will raise intra-African trade by 15 to 25 percent, which is $50 billion to $70 billion, by 2040, compared to an Africa without the AfCFTA.
However, the implementation of the Africa Continental Free Trade Area will allow Africa to increase local content initiatives, expand economic activity and drive local capacity for the development of Africa’s hydrocarbon resources.
Leading the African local content agenda, PETAN, the largest and leading indigenous advocacy group representing the Nigerian oil and gas service companies with membership across the entire value chain is forging partnerships across Africa to stimulate a private-sector led industry that will catalyse the growth and development of the Continent through local content development.
PETAN is working extensively with the SAIPEC member countries to increase Intra-Africana trade under the African Continental Free Trade Area, and working closely with the Global Event Partners, the event organizer, to develop a stronger platform for SAIPEC’s subsequent edition.
Recently, PETAN partnered with the Mozambican Local Content Association (ACLM), and the Association of Tanzania Oil and Gas Service Providers (ATOGS) to deepen and promote local content opportunities for the benefit of both countries through sharing of experiences, capabilities, expertise, and technical engineering solutions. It will also enhance collaboration on joint venture bidding and financing for projects whilst exploring business opportunities available in the oil and gas sector, and training and capacity-building programs for indigenous operators across the oil and gas value chain.
Speaking on this development, PETAN Chairman, Nicolas Odinuwe commented, “Private sector must lead in the oil and gas industry. Politics and investment usually don’t go together. The government is supposed to provide an enabling environment. The industry is wide with a lot of linkages attached to it and it involves all sectors of the economy. I believe that if the government will work with the Association, we will be able to get a lot of mileage to develop competencies and capacities.
“With indigenous capacity and competence, local participation will ensure seamlessly. Opportunities will trigger capacities, competencies, and innovation. Partnerships, research, and development, and access to markets, finance, and capital are also vital for local content development. Stakeholders must form collaborations to catalyse growth and development.
“The process of developing local content is beneficial in the long run, as it will address challenges such as touting, capital flight, and improve in-country value retention, domiciliation, and domestication.
“Indigenous suppliers or service providers must develop a culture of reliability and competence. As the focal point of the local content drive and private sector representatives, we must be the pedestal to the growth and progress of the business ecosystem that drives opportunities for SMEs and linkage sectors of our economies.
“Local participation doesn’t just happen. There must be deliberate policy by the government to promote participation and the necessary enablers must be put in place for it to thrive.
“In Nigeria, PETAN partnered with the government to form our Local Content Law, and today, we have our Local Content regulatory body, the Nigerian Content Development and Monitoring Board, NCDMB, which has been doing wonderfully and on who’s Board PETAN has a spot as a Council Member.
“With PETAN’s experience as the leading association of professional indigenous technical oilfield service companies in the upstream, midstream, and downstream sectors of the oil and gas industry in Nigeria, as well as the leading representative advocacy group, PETAN is ready to offer support and mentorship to achieve its objectives”.
SAIPEC will return to the Eko Convention Centre from 20-23 February 2023 for its 7th edition, as the only oil and gas event held in partnership with the entire Sub-Saharan African petroleum industry. The 3-day flagship international energy conference is being hosted by PETAN, an association of leading Nigerian Indigenous Technical Oilfield service companies in the upstream, midstream, and downstream sectors of the Nigerian Oil and gas industry, with the active support from the Nigerian Content Development and Monitoring Board (NCDMB), headed by Engr. Simbi Kesiye Wabote, it’s Executive Secretary.
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