The constant fluctuation of oil prices in the international market and the aggravation of COVID-19 have hit world economies. Countries dependent on hydrocarbons, among other sectors, have paid an even higher bill as they have been forced to reduce their production or, in extreme cases, paralyze it due to the high risk of contagion posed by the threat of the coronavirus. However, the economy of Equatorial Guinea, an oil producer in Africa, shines a different color and sees a promising future in the eyes of the Equatorial Guinean Minister of Mines and Hydrocarbons, Gabriel Mbaga Obiang Lima.
“I would consider the Covid pandemic as a great opportunity for Equatorial Guinea especially because unlike other countries where production has already fallen since the start of the pandemic and despite the drop in the price of oil, our production has not stopped,” he said in an interview with Dreams Talks for Africanian News. Just a few weeks before the African Energy Week in Cape Town, South Africa, where one of the objectives during the event is to attract investment to his country.
DT: The price of oil in the international market has been quite unstable in recent years as the pandemic continues to grow. What does the recent increase in the price of crude oil in the international market mean for the Equatorial Guinean industry? Can it be expected to stay at this level for a long time?
H.E. Gabriel Mbaga Obiang Lima: In principle, one should understand the history that the oil industry has had. The first shock we had was in 2016 due to accelerated production that caused supply to be above demand, which caused a drastic fall in the price of oil. This was a blow to national production that could be jointly resolved between the American market and the members of OPEC (OPEC +); Analyzing strategies, it allowed to reach some agreements that stabilized prices that oscillated between 60 to 70 dollars per barrel, which is fair for a producer and also for the consumer of crude oil.
DT: The increase in international forums and summits with key players in the world economy, to discuss strategies on how to mitigate the consequences of the Covid-19 pandemic; one of them, the African Energy Week to be held in Cape Town, is just around the corner. What does Equatorial Guinea hope to achieve with its participation?
H.E. Gabriel Mbaga Obiang Lima: Our bet in general is focused on investing oil and gas derivatives. We will put more emphasis on promoting gas projects since after all it is the most used resource. In that sense, we have large projects such as Gas Mega Hub, an infrastructure designed to have additional gas such as Punta Europa. Likewise, we are preparing new study parameters for the new Hydrocarbons Law, which is extremely important. In it, we propose to introduce clauses related to gas and refined products, also proposing some fiscal modifications that were not included in the 2016 Law; an action that will allow us to focus our eyes on our country to attract investment. Within these consolidation considerations, we contemplate the restructuring of the national companies Sonagas and Ge-Petrol for a possible merger of both.So we aim towards 2022, to embrace investment alliances in these activities, including the mining sector.
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DT: The health crisis is undoubtedly one of the biggest barriers to growth today. What does this mean for the Equatorial Guinean industry and what can we expect post-Covid?
H.E. Gabriel MbagaObiang Lima: Wherever there is a threat, there is an opportunity. I would consider the Covid-19 pandemic as a great opportunity for Equatorial Guinea especially, because unlike other countries where production has already fallen since the beginning of the pandemic and despite the international drop in the price of oil, our production has not stopped; it is true that these drastic falls in the price of oil have caused their impacts. And although we actually almost managed to increase our production through Ceiba, prices were agonizing; otherwise, we would have had considerable additional benefits.
It is a great opportunity because what the pandemic does is present who really has production and who are those who have been taking risks. I think it is an opportunity for us because it will allow us, and more so in the service sector, to begin to take greater responsibility for our destiny. An opportunity for diversification. It is important that we think about other areas and industries that can function outside the dependence of almost 80% of hydrocarbons; sectors such as agriculture, fishing, or tourism. But above all, the greatest opportunity lies in the advantage that Equatorial Guinea has by having made a high investment in the layout of its key infrastructures: airports, ports, roads, etc. My opinion is that the world is running a marathon, an endurance marathon, anxiously awaiting the day when it is said that the pandemic is over, the quarantines, the curfews. We are all creating and waiting for that moment when there are daily flights. I think we are well prepared and just waiting for a full opening.
DT: Did the Ministry face any challenges during the peak of the Covid-19 pandemic? What was it and how did you solve it in the affirmative case?
H.E. Gabriel Mbaga Obiang Lima: We had a rather worrying case at the beginning of the pandemic. We were alerted to a Covid-19 infection of 17 workers at Exxon Mobil’s platform, Serpentina. It was the first time. How to treat it, what to do? It was quite complicated because we had to activate an entire emergency protocol that included transferring those affected safely to the places authorized then for their treatment, taking the helicopters to be disinfected, transferring them to the Exxon Mobil facilities, the parallel procedure of a complete cleaning of the Serpentina platform etc. I have to applaud the efficiency, both the coordination and performance of the company with the national employees, which allowed production not to stop. Another challenge identified was the difficulty for expatriate experts to arrive in our country due to international preventive measures, a situation that put operations to the test for almost 4 months in all infrastructures with national personnel.
DT: In recent years, conversations on clean and renewable energies have gained a lot of momentum. What is your opinion on this and how does Equatorial Guinea fit into that framework?
H.E. Gabriel Mbaga Obiang Lima: I believe that this energy transition process is quite unfair for developing countries. Just because Europe or America are ready does not mean that developing countries are. We are not talking about the same years or the capacity for development. They can have their electric cars, wind systems or solar panels and they can work because they already have all the infrastructure and technology required.
Asking Douala, Yaoundé or Ebebiyin to move overnight from gasoline vehicles to electric cars is another league. The saying is: every journey of a thousand miles begins with one-step. So I think developing countries will come, but they need even more time to catch up with this conversation. More than 50% of hydrocarbon resources are held by developing countries, and not developed countries. But the question is: Who really pollutes? We use hydrocarbons exclusively for vehicles and electricity. They use them for large industries and hence the greatest pollution. So it is they who should stop exploiting hydrocarbons. I think it is a somewhat unfair and abrupt situation because they are trying to make us subject to their guidelines. And this is a process that we need not 10, but 20 or 30 years. Unless they invest more in this common development for the planet and let’s talk about credit without ties.
Read also: Cameroon: Equatorial Guinea explores ways to better trade ties in Petroleum, Gas sectors
DT:Could you share with us some of the milestones or achievements the ministry has recorded under your leadership? What have been some of the challenges you have faced as a minister and how did you overcome them?
H.E. Gabriel MbagaObiang Lima: One of the milestones has been the construction of the methanol plant. It must be remembered that this plant is the largest in Africa, and that it produces 3% of the world’s methanol. Among the milestones, I will also highlight the liquefied gas plant, with the record for the fastest plant built in the world and at the same time for a cost below budget; further confirmed by studies that it is the best-liquefied gas in the world.
We point to achievements registered in offshore infrastructures, the Serpentina platform, from Exxon Mobil, going from having a single ship to a platform; a floating ship in Serpentina; another floating ship in Okume and Ceiba, and another two floating ships in Set.
Mainly, one of our biggest challenges or challenges has been the subject of storage, especially of refined products. More specifically the issue of liquefied gas, LNG. For quite some time we have depended on the importation of products, a pending issue that we resolved by creating a Covid-19 safety stock. And of course, another of the biggest challenges has been the continuous reorientation of strategies to be able to operate throughout this time under the restrictions of the pandemic caused by Covid-19.
Read also: Equatorial Guinea Continues Proactive Industry Engagement to Support the Oil Sector
DT:Equatorial Guinea has significant success stories with gas projects in Africa. What are some of the gas-related initiatives that can help accelerate the economy of the country and the sub region and boost social development through job creation and exports to neighboring countries and international markets?
H.E. Gabriel Mbaga Obiang Lima: One of the key projects at the moment is the GAS MEGA HUB. The idea is to have an infrastructure that allows it to be treated from different fields in various countries.
The first Alba field, from Punta Europa, now we also have the Alén field. The projection for the future is that we can bring from fields in Nigeria and Cameroon to also be processed here. Another quite ambitious project that should be highlighted is the possible LNG BUNKER, to permanently resolve the issue of liquefied gas storage. We are also promoting a CEMAC refined products pipeline project, which could integrate countries such as Equatorial Guinea, Cameroon, Gabon. These, adding the mining project, specifically the production of gold, ready for launch in the coming days, are some of the projects that we believe will require many service companies, many national infrastructures and we believe that they can contribute to the activation of many companies, and therefore contribute to a more diversified economy both for the country, the subregion and globally.
Thank you very much for your time H.E, we hope to have you again soon.
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