Africa chooses to unite for a more prosperous energy future. Sherine Nasr reports For the first time, delegates of the African Union's (AU) member states, experts and representatives of African energy organisations met in Cairo to discuss the future of energy in the black continent. "We believe that this meeting represents a turning point in the future of securing energy and promoting cooperation among African countries," said Sameh Fahmi, minister of petroleum, at the inauguration of the first African Union Conference of Ministers Responsible for Hydrocarbons (oil and gas), held in Cairo on 13 December. The event was organised by the AU Commission, the Egyptian government and the African Development Bank (ADB). A dominant feature of the African market has been the unprecedented rise and volatility of oil prices. This has taken its toll on many African economies, particularly those countries which rely heavily on importing oil and related products. "For African countries, oil is a mixed blessing," said Bernard Zoba, commissioner for Infrastructure and Energy of the AU, who explained that while some countries have benefited from these price spirals, others have suffered a great deal. According to AUC studies, profits of African oil-exporting countries are believed to have doubled between 2000 and 2005. However, the bill for importing oil and other oil products for non-oil producing countries has often exceeded 10 per cent of the country's GDP. "This situation has negatively affected the balance of payments, inflation, employment, growth rates and debt servicing, as well as the people's standard of living at large," the studies indicate. But this strategic meeting in Cairo aimed for more impressive goals than simply mitigating the negative impact of rising oil prices on African oil-importing countries. After three-day preparatory meetings of experts, the conference decided to adopt the Cairo Declaration on African Cooperation and Solidarity in the Field of Hydrocarbons. Among other matters, the declaration will urge the AUC to draw up a continental policy of development for the hydrocarbon sector. This will involve setting up regional storage facilities to improve the stocking and distribution of oil products in the non-oil countries. Also mentioned was the need to integrate regional gas, oil pipelines, refinery projects and exploration and to define and implement development strategies for clean and renewable energy. Further, an action plan has been set to achieve some major goals that would mark the beginning of a new energy era of the continent. Among the major goals to be pursued by the action plan is a scheme to promote deeper regional integration projects, to optimise oil revenues for oil-producing countries and to increase the quantity and improve the quality of oil products. This will be done by drawing up a continent energy security policy and by rehabilitating and extending existing refineries and constructing new regional refining facilities. An African Petroleum Fund (APF) in the AU is to be established with the aim of mitigating the negative impact of high oil prices on underprivileged African economies. "The management of this fund's resources and activities are to be entrusted to the ADB. We need to make it operational as soon as possible," said Zoba. These positive steps are somewhat timely for African nations, as the upward trend in oil prices is not the only challenge the black continent has to face. Geopolitical tension and sectarian strife in many parts of the region have added to its already heavy burden. When combined with fierce global competition, it is clear that the challenges facing Africa are grave indeed. "Africa has always been in the limelight for the wealth of natural resources that she represents," said Fahmi, who added that the abundance of energy resources, of oil and gas in particular, should be the cornerstone of economic and technological development. Usefully, some substantial oil and gas discoveries have recently been made across the continent. At present, Africa possesses 10 per cent of the world's reserves of oil and eight per cent of the total natural gas reserves. Africa is also rich in other energy sources such as coal, while other natural resources are bountiful but are hardly exploited. In the meantime, Africa's share of the world's consumption of oil, estimated at three per cent, remains marginal. "About half of this consumption is accounted for by three countries, a structure that underlines the fact that the current oil requirements of most African countries are minute in both absolute and comparative terms," said Dave Lafiaji, executive secretary of the African Petroleum Producers' Association (APPA). He added that hitting the right growth rates across the continent over the coming decades would clearly increase this share. Now that all indicators point to the fact that oil prices will further increase, the world is seeking to secure supplies at any price. "Developed countries will buy oil at any price. The premier concern of the international market now is energy security rather than energy pricing," said Fahmi, who remarked that African oil producing countries now face a tremendous challenge; trying to strike a balance between securing energy for developmental needs, while also making the utmost of the upward oil prices trend. "It is expected to jump to $1,000 per tonne within the next 10 years," said Fahmi. Although it is one of the African countries, Egypt has been more engaged with the Arab countries in terms of discussing energy matters through both OPEC (Organisation of Petroleum Exporting Countries) and OAPEC (Organisation of Arab Petroleum Exporting Countries). This can be seen in the way that Egyptian companies are involved in 12 Arab, as well as non-Arab, countries including Saudi Arabia, Kuwait, Qatar, Jordan, Syria, Algeria, Sudan and Venezuela. However, the volume of the business run by Egyptian companies operating in Africa is still negligible. "Cooperation with the rest of the African countries in the field of energy has not been wealthy or profound. But this is about to change now. The Cairo declaration will mark a new era of cooperation" said Fahmi. "Egypt is ready and willing to provide its expertise and know-how to any African country for the sake of more cooperation and integration among countries of the same continent," noted Fahmi, who underlined that he has been delegated by President Hosni Mubarak to convey Egypt's willingness to get more involved in energy dialogue and strategies with the rest of the African continent. As a matter of fact, Egypt has at least a century of experience in the fields of oil exploration, extraction, importing, exporting, and so on. Moreover, Egypt has a flourishing petrochemical industry that is thriving, thanks to an increasing wealth of natural gas which forms the backbone for this heavy-energy industry. "Petrochemicals are gaining an unprecedented importance in the light of the spiralling oil prices," said Fahmi who noted that strategic oil and natural gas reserves have lately been discovered in a number of African countries, "a fact that promises a better future for these countries."
