The African Energy Chamber, a leading regulator for the continent’s energy sector, has urged the Organization of the Petroleum Exporting Countries (OPEC) and other key global oil producers, including Russia, to continue with historic production cuts at the December 6th, 2018 OPEC meeting in order to stabilize global oil prices.
Oil prices dropped by about 20% in November, and the month is likely to record the biggest one-month decline in oil prices since the crash of 2014. OPEC believes that this is not good for producers in Africa and African economies.
The Chamber has now urged African oil producing nations, both OPEC members and Non-OPEC members, to speak up with one voice in support of OPEC’s policy on stabilizing the market.
“This new drop in oil prices clearly shows the world that the global supply cut has not been eliminated. The future of the petroleum sector, and indeed the future of global energy security, depends on a continuation of the OPEC-led production cuts,” said NJ Ayuk, chairman of the African Energy Chamber.”
According to the Chamber, oil producing nations, many of which are within Africa, are at particular risk of economic hardship if the supply glut continues and prices spiral. Such countries include Nigeria and Angola, two of Sub-Saharan Africa’s largest economies, as well as Equatorial Guinea, Cameroon, Congo, Gabon, South Sudan, Algeria, Libya and Ghana. Other key countries that are investing in upcoming mega projects, like Mozambique, Uganda and Senegal, could face project delays in the face of low oil prices.
A document known as the Declaration of Cooperation, moderated by OPEC’s Secretary General, Mohammed Sanusi Barkindo, which was signed in 2016 by OPEC countries and 10 non-OPEC countries and saw several extensions, is set to expire at the end of 2018.
“The historic Declaration of Cooperation is largely credited with rescuing the oil industry from collapse, and returning economic security to oil-dependent nations, many of which are in Africa. Abandoning this extraordinary deal now would only see production increase and the supply glut worsen — effectively making any progress achieved in the last two years null and void,” said Ayuk.
“When the oil market is in crisis, the path to dignity and prosperity is closed off to many African families. It leaves many Africans, particularly those without advanced degrees on their own to chart their own course where clear and attainable paths to a meaningful and prosperous life once existed,” Ayuk continued.
The opinion of many Africans on OPEC and the energy sector has taken a measurable, positive jump as people acknowledge the strong connection between the oil and gas sector, the African economies and the African entrepreneurial dream.
“The Africa Energy Chamber stands by OPEC and Consumers and we will continue work with our members to educate the public of the need for lasting stability in the oil industry. It is our firm believe that the 2016 Declaration of Cooperation rescued the oil and gas industry and many African economies from imminent collapse,” the Chamber said in a statement issued this week.