Africa

Equatorial Guinea will revise its oil and gas law to encourage upstream, middle and downstream investments, other African countries should do the same

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Equatorial Guinea will revise its oil and gas law to encourage upstream, middle and downstream investments, other African countries should do the same

Equatorial Guinea has already established itself as an African and global competitor for oil and gas

JOHANNESBURG, South Africa, September 23, 2021 / APO Group / –

HE Gabriel Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, announced the intention of the ministry to prepare a new law on hydrocarbons aimed at attracting oil investments in the sector of the country. With national goals aimed at making the country an oil and gas leader, the new hydrocarbons law aims to strengthen investments, attract regional and international energy players and accelerate growth and development in 2021 and beyond. of the.

During his presentation to the Leadership Insight: Equatorial Guinea Webinar Series hosted by the Bilateral Chamber in Houston, Texas, the Minister provided an overview of the Hydrocarbons Bill, stating that with new fiscal terms that encourage investment, the country will be able to achieve its ambitious energy sector goals. HE Minister Gabriel Lima addressed some of the challenges related to the preparation of the new Hydrocarbons Law, underlining the value that this new legislative text will have in creating an environment that is both favorable and attractive for investors.

Equatorial Guinea is endowed with significant oil and gas reserves which have attracted and continue to attract a significant level of foreign capital. To date, the country holds more than 1.5 trillion cubic feet of natural gas reserves and about 1.1 billion barrels of crude oil reserves. As the Minister leads a strong campaign to increase investment in emerging exploration and production prospects to stimulate the development of large-scale projects, the new Hydrocarbons Law will promote progress, promote investment and strengthen the advancement of the energy sector.

“Equatorial Guinea has already established itself as an African and global competitor for oil and gas. We have seen big companies like Hess, Marathon, ExxonMobil, Devon and Chevron explore for hydrocarbons off Equatorial Guinea with resounding success. Now is not the time to stop and get comfortable. At a time of energy transition and strong competition for capital, it is important to be pragmatic and to have a law on hydrocarbons that takes into account today’s realities and encourages growth. We need to be more competitive, reduce red tape, promote free markets, balance local content, create more jobs and increase our tax base, ”said HE Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons.

HE Minister Gabriel Lima will provide an overview of the new Hydrocarbons Law during Africa Energy Week (AEW) 2021 in Cape Town – to be held from November 9 to 12 – and at the African American Forum on energy in Houston – to be held on December 9-10. By detailing the legislative specifics, addressing the challenges of implementation and emphasizing the value of the law for strengthening investments in the hydrocarbon sector of Equatorial Guinea, the Minister focuses on accelerating the growth of the energy sector and the country’s positioning as an African leader in hydrocarbons.

“We have argued for the importance of strategic tax policies, from revised production sharing contract (PSC) requirements to reduced tax and royalty requirements. Some have criticized us for advocating this. I don’t agree with them, and still love them, but resource nationalism is not the way to go and it is actually dangerous for Africa. Equatorial Guinea taking the initiative to carry out reforms is a step in the right direction. I truly believe that these changes are necessary to inspire the CIOs to explore in Equatorial Guinea during the current crisis. But we can’t stop there. We need to consider other pain points that discourage foreign operations in Africa and find ways to eliminate those challenges as well. If necessary, the Chamber will provide advice and support, ”said NJ Ayuk. Executive Chairman of the African Energy Chamber (ACS).

Although details vary by country, the licensing process has, in general, become too subject to delays and uncertainty. Too often, exploration and production (E&P) companies have to wait a year or two before their proposed exploration projects are sanctioned. These practices, which help protect the interests of oil-producing countries, made sense when crude was selling for $ 100 a barrel. But they don’t make sense anymore.

After all, the conditions are still uncertain. Granted, the crude price forecast for 2021 is cautiously optimistic for now, and Goldman Sachs has said Brent oil prices could hit $ 65 a barrel by this summer, compared to the $ 50 we’re seeing now. But the outlook for the African oil market remains fragile at best.

In these circumstances, it is up to African oil and gas producers to do their utmost to encourage E&P activity as much as possible, especially from international oil companies (IOCs). In the long run, of course, African producer states must reduce their dependence on oil and gas revenues. But for now, a number of them depend on it for a large part of their budgets. And as long as they do, they should be asking for more. They should push for knowledge transfers, training, gas monetization programs and other important opportunities so that their strategically managed oil and gas operations can create avenues for economic growth and diversification.

AEW 2021, in partnership with the South African Department of Mineral Resources and Energy DMRE, is the AEC’s annual conference, exhibition and networking event. AEW 2021 brings together African energy players with international investors and partners to drive industry growth and development and promote Africa as a destination for energy investments.

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