Equatorial Guinea Courts $1bn to Diversify Energy Sector

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Tuesday, January 07,  2020 /08:53 AM / By FDC / Header Image Credit: Africa.com

 

Equatorial Guinea's energy ministry pitched a round of oil and gas projects to investors in Malabo on Wednesday. Ten projects, which will be open to investors in 2020, are part of the OPEC member's efforts to diversify its oil industry and lay the foundations for in-country processing and manufacturing.

 

Equatorial Guinea's mines and hydrocarbons minister, Gabriel Obiang Lima, called for investment in the construction of three in-country oil refineries, tanks for storing and refining gas and LNG, a urea processing plant and the expansion of an LNG project. Two of the three refineries will have a combined capacity of 30,000-40,000 bpd, and will refine crude from the Zafiro and Aseng fields into gasoline, kerosene, and other petroleum derivatives. A third refinery in Kogo will refine gold mined from Equatorial Guinea and the wider Central African region.

 

The new refineries will help Equatorial Guinea, which is sub-Saharan Africa's third largest oil producer refine and process petroleum products in-country for domestic use, according to industry experts. A final project calls for investors to develop the country's compressed natural gas (CNG) plant, with grand plans for a bus terminal, gas-powered bus fleet, cooking gas bottling facility and upgraded road infrastructure.

 

In partnership with French Total and state-owned GEPetrol, the energy ministry hopes to position the country as the first in the region to use CNG for transport, the energy ministry said in a statement. The plans build on the country's efforts to diversify its economy. The October releases of Doing Business 2020 from the World Bank and the Global Competitiveness Report 2019 from the World Economic Forum (WEF) offer a fresh chance to assess the relative standing of Sub-Saharan Africa (SSA). Both convey the message that SSA is improving in absolute terms but making slower progress in relative terms because other regions are reforming at a similar or faster pace. Within this broad context, some SSA countries are rising up the rankings while others are falling, underlining the region's diversity. A notable feature of the various league tables now published-including Transparency International's Corruption Perceptions Index and the Economist Intelligence Unit's Democracy Index-is the leading position held by a select group of countries that regularly appear in the top 10 of several indices: Botswana, Cabo Verde, Ghana, Mauritius, Namibia, Rwanda, Seychelles, Senegal and South Africa. This is hardly surprising, given the obvious correlations between governance, corruption, economic performance and policy coherence. away from crude exports that currently provide 90% of foreign revenues, but are predicted by the World Bank to decline by over 3% in 2019.

 

Despite ranking 172 out of 180 countries in Transparency International's 2018 corruption index, the government of Equatorial Guinea has attracted international oil companies. While reputational risk is a key consideration for oil majors operating in the country, it has not stopped ExxonMobil, Marathon, Noble, Glencore, Hess, Devon, Gazprom, Luckoil and Vanco from exploring and in some cases discovering and exploiting oil in the country.

 

President Teodoro Obiang Nguema, is the world's longest-serving leader who has ruled over the country's 1.3 million population since 1979, after deposing his uncle.


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