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AFRICAN PETROLEUM PRODUCERS ASSOCIATION (APPA)

UNCTAD 10th AFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS. AFRICAN PETROLEUM PRODUCERS ASSOCIATION (APPA). MEETING THE CHALLENGES OF THE AFRICAN OIL AND GAS SECTOR THROUGH JOINT INITIATIVES AND POLICY HARMONISATION

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AFRICAN PETROLEUM PRODUCERS ASSOCIATION (APPA)

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  1. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS AFRICAN PETROLEUM PRODUCERS ASSOCIATION (APPA) MEETING THE CHALLENGES OF THE AFRICAN OIL AND GAS SECTOR THROUGH JOINT INITIATIVES AND POLICY HARMONISATION _____________________________________By Dave LAFIAJI Executive Secretary-APPA 4 April 2006 NOT AN OFFICIAL UNCTAD RECORD 1AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  2. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Objective of the presentation The objective of this presentation is to show how joint initiatives and policy harmonisation using an institutional platform such as the one provided by APPA can contribute to meeting the challenges of the African oil and gas sector. 2AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  3. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Outline of the presentation • The institutional platform • Vision, missions and fundamental objectives • Characteristics of the African oil and gas sector • The key challenges of the African oil and gas sector • Some of our initiatives 3AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  4. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Outline of the presentation • Expected results • Institutional support • Conclusions 4AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  5. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS The institutional platform • By its creation in 1987, APPA became the first institutional initiative in Africa to promote cooperation and joint policy initiatives in the area of oil and gas development. 5AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  6. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS The institutional platform [We shall define oil and gas development for the purpose of this presentation, as the sustained evolution of the hydrocarbon sector towards the discovery and efficient exploitation of the full potentialities of a country’s hydrocarbon resources and the deepening of the sector’s impact on the totality of the country’s economic systems ]. 6AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  7. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS APPA’s Vision Statement The vision statement encapsulates the collective aspirations of the Members of APPA and this is: …to be the world’s most powerful engine of regional integration, coordination and harmonisation of Member Countries’ efforts in the development of their oil and gas industry. 7AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  8. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Mission Statements APPA defines its missions as follows: • Promote the pooling, exchange and sharing of human, scientific,technological and financial resources necessary for the development of the oil and gas industry of of its Member Countries • Contribute actively to the efforts of Member Countries to maximise the socio-economic benefits of the exploitation of their hydrocarbon resources while being mindful of the current environmental standards • Contribute actively to the energy security and development of the economies of Member Countries in particular and African countries in general, with a view to improving the well-being of our populations. 8AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  9. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Fundamental Objectives The Association’s vision et missions as enunciated, are driven by the following fundamental objectives: • to promote co-operation among Member Countries in the areas of hydrocarbon exploration, production, refining, petrochemicals, human resources, acquisition and adaptation of technology and legal matters 9AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  10. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Fundamental Objectives…. • to promote technical assistance among Member Countries in specialised areas in which individual members have acquired experience • to promote the co-ordination of marketing policies and strategies of Member Countries through the exchange of information with the aim of safeguarding their non renewable resources and realisingoptimum revenue from exports 10AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  11. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Fundamental Objectives…. • to increase the understanding of energy policies and situations in Member Countries through consultations with a view to meeting their domestic energy needs and • to study ways and means of assisting net oil importing African countries in meeting their energy requirements (this particular objective bears clear relevance to the question of the supply of petroleum products in Africa which has assumed urgency in the context of the prevailing oil market situation ) 11AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  12. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Characteristics of the African oil and gas sector • 8-9% of the world’s proven reserves • More than 80% concentrated in 4 or 5 countries-all APPA Members alongside smaller producers of oil and or gas • Risk capital still invested principally by the international oil companies • Know-how developed, held and supplied by the same companies • Independents and new-generation oil companies (including private nationals) now increasingly present 12AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  13. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Characteristics of the African oil and gas sector • Cross section of same companies operate in the oil producing countries where they pioneered oil and gas activities • Generally « low levels » of linkage with the national economic sectors-industry, construction, services (low local content) • Some national oil companies are however, now moving to the « next level » in their corporate development: internationalisation 13AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  14. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Characteristics of the African oil and gas sector • Geo-politically advantageous location and reliable supply source • Strong potentialities to add to the world’s reserves • Oil and gas sector still the largest channel for foreign direct investments (FDI) • Fragmented mid/downstream (refining & petrochemicals) infrastructure and market 14AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  15. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS The key challenges of the African oil and gas sector • Considerable amounts of financial resources required for development • Harmonisation of aspects of the (diverse) fiscal frameworks for exploration/production • Operating environment considered as challenging for investors in general aspects • Scientific and technological thresholds to reach the desired levels of local participation • Dealing with the geo-strategic calculations that oil and gas resources evoke 15AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  16. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Some of our initiatives 16AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  17. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Some of our initiatives 17AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  18. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Some of our initiatives 18AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  19. UNCTAD 10thAFRICA OIL & GAS TRADE & FINANCE CONFERENCE & EXHIBITION ALGIERS Some of our initiatives 19AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  20. Some of our initiatives 20AFRICAN PETROLEUM PRODUCERS ASSOCIATIONmars-06 20AFRICAN PETROLEUM PRODUCERS ASSOCIATION Feb-05

  21. Concluding remarks • An institutional platform is always required to spearhead harmonisation • This provides better visibility for investors and allows for fast-tracking development • Provides for cost savings for investment in other uses 21AFRICAN PETROLEUM PRODUCERS ASSOCIATIONmars-06 21AFRICAN PETROLEUM PRODUCERS ASSOCIATION Feb-05

  22. Institutional Cooperation and partnership With the firm commitment of its Members, APPA is determined to work with regional and international institutions to transform its vision into durable beneficial results for its Members and more importantly for Africa In this process, the international oil companies are and remain our long term strategic partners. 22AFRICAN PETROLEUM PRODUCERS ASSOCIATIONmars-06 22AFRICAN PETROLEUM PRODUCERS ASSOCIATION April-06

  23. APPA « Zone » www.africanpetroleumproducers.org

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