Amni’s Wale Olafisan on the future of Africa’s oil and gas sector

The global oil and gas sector is facing a tumultuous period, with the demand for oil set to fall for the first time since the financial crisis in 2009 due to the impact of the coronavirus outbreak in China. The recent agreement by OPEC and its allies to cut output by 1.7 million barrels per day until the end of March this year has added to the complexities in the market. Amidst these dynamics, Africa's oil and gas sector is poised at a critical juncture, with both challenges and opportunities on the horizon. The future of Africa's oil and gas sector was discussed in a recent interview on CNBC Africa with Wale Olafisan, the Group Managing Director of Amni International Petroleum Company. Olafisan highlighted the importance of understanding Africa's unique position in the global energy landscape. He emphasized that African producers cannot solely rely on OPEC, as the major controllers of the organization are not Africans. Olafisan underscored the need for African governments and local industry players to proactively position themselves in the evolving oil market. He stressed the importance of strengthening national oil companies across the continent, advocating for autonomy, transparency, and freedom from interference. By enhancing the capabilities of these entities, Africa can better navigate the challenges and capitalize on the opportunities presented by the shifting dynamics in the industry. One of the key points raised during the interview was the necessity for African nations to address the 'PESTEL' factors - political, economic, social, technological, environmental, and legal aspects. Olafisan argued that a holistic approach is required to create a conducive environment for investment in the oil and gas sector. By aligning these factors and establishing a stable political and legal framework, Africa can attract the much-needed investment flows to drive growth and development in the industry. The discussion also delved into the current oil price trends and the geopolitical factors influencing the market. Olafisan expressed optimism about sustaining the recent momentum in oil prices in the short term, attributing fluctuations to geopolitical tensions rather than fundamental supply and demand dynamics. He emphasized that investment decisions in the sector are heavily influenced by the political and legal landscape, urging African nations to create a favorable environment to attract investors. Despite the headwinds in the global oil market, Olafisan remained bullish on Africa's potential as an oil and gas hub in the coming decade. He pointed out the increasing discoveries in various African countries, highlighting the vast untapped potential across the continent. With over 30 African countries actively engaged in the oil and gas sector, including emerging players like Liberia, Tanzania, and Mauritania, Africa is poised to become a key player in the global energy landscape. In conclusion, the future of Africa's oil and gas sector hinges on strategic positioning, regulatory frameworks, and investment flows. By addressing the multifaceted challenges and leveraging the abundant opportunities, African nations can chart a path towards sustainable growth and prosperity in the evolving energy industry. As Olafisan aptly summarized, Africa is the next destination for oil and gas investments, presenting a promising outlook for the continent's energy future.