The African Energy Chamber (AEC) has called on the Organisation of Petroleum Exporting Countries (OPEC) and other major global oil producers, including Russia, to continue with the historic production cuts to stabilise the oil price
Oil prices have dropped by about 20 per cent in November, and the month is likely to record the biggest one-month decline in oil prices since the crash of 2014.
This is not good for producers in Africa and African economies, it added. The Chamber urged both those that are OPEC members and Non-OPEC members to speak up with one voice in support of OPEC’s policy on stabilising the market.
NJ Ayuk, chairman of the AEC, said, “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.”
Oil producing nations, many of which are within Africa, are at particular risk of economic hardship if the supply glut continues and prices spiral, the chamber stated.
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 vital countries that are investing in upcoming mega projects, like Mozambique, Uganda and Senegal, could face project delays in the face of low oil prices, the chamber noted.
The historic 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,” stated 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.
