There seems to be major concern for Nigeria and other African petroleum producing countries, as dearth of funds, undeveloped internal market for hydrocarbon derivatives, among others, currently threaten development of 120 billion barrels of proven reserves, according to Minister of State for Petroleum Resources, Timipre Sylva.

This was the submission of stakeholders at the first African Local Content Investment Forum, ALCIF, organised by the Nigerian Content Development and Monitoring Board, NCDMB, in Lagos.

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The development has forced petroleum producing countries in Africa to engage with Developmental Finance Institutions, DFIs, to fund critical petroleum projects on the continent.

While speaking on the theme: "Pan-African Strategy Towards Sustainable Funding of Africa Oil and Gas Projects" yesterday in Lagos, the Minister of State for Petroleum Resources, Timipre Sylva, stated that, African countries were engaging the Afrexim Bank, African Development Bank and other financial institutions to finance their projects.

"This move was necessitated by the refusal of international finance institutions to approve funding for development of hydrocarbons due to the global push for transition to cleaner sources of energy," he said.

Sylva, who was represented by Dr Nasir Sani-Gwarzo, Permanent Secretary, Ministry of Petroleum Resources, noted that Africa had 120 billion barrels of proven crude oil and about 600 trillion cubic feet of proven gas reserves that must be harnessed for the continent's socio-economic development.

He said: "Without doubt, the emerging trend is that leading multinational financial institutions are factoring Environmental, Social, and Corporate Governance, ESG, in their lending decisions.

"The seeming freezing of equity investment in upstream field development projects by International oil companies is a wakeup call for Africa to provide alternative funding to sustain hydrocarbon development and secure our energy future."

"Governments of Africa Petroleum Producing Organisation, APPO, member countries are heavily dependent on oil and gas revenues to meet their socio-economic obligations.

"Dearth of funds, limitations in technology mastery, high-end skills gap, undeveloped internal market for hydrocarbon derivatives and inadequate energy infrastructure are some of the challenges facing the industry.

"Africa's oil and gas infrastructure requirements include upstream field development projects; pipelines; depots; terminals; refineries; petrochemical plants; and research and development among others, which required huge funding."

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Also speaking, NCDMB, Executive Secretary, Mr Simbi Wabote, stated: "I recall that we held the African Local Content Roundtable in Yenagoa, Bayelsa State, sometime last year where we discussed some key points on how to move the African oil and gas industry forward.

"This forum is a follow-up discussion to close out one of the key action points from the ALCR. Here, we will seek to kick-start the development of a framework for establishing a pool of funds for funding major oil and gas projects and attraction of investors into the industry."

We need to setup AEICorp --APPO

The Secretary General, APPO, Dr Omar Ibrahim, said Africa's contribution to greenhouse gas emissions was about four per cent, stressing that it was, therefore, unjust for the continent to be railroaded into the global energy transition timeline.

He called for the setting up of an African Energy Investments Corporation, AEICorp, which would fund oil and gas projects, as traditional financiers withdraw from the industry.

Ibrahim said: "We are realistic. AEICorp cannot do it alone. No financial institution in Africa can do it alone. But through cooperation and collaboration, we are confident that Africa shall succeed."

"If we see energy security as critical to our national security, we should enact laws that provide for a portion of windfalls from oil and gas sales to be re-invested in the industry.

"We need to find a way or ways of getting African oil and gas producing countries' governments to commit a certain percentage of the windfalls to a special fund for the sustenance of the oil and gas industry during the transition period."

Copyright Vanguard. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English