Maximising Equatorial Guinea’s hydrocarbon industry potential

His Excellency Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of the Republic of Equatorial Guinea, spoke exclusively to Julian Walker, Editor-in-Chief of Energy Connects, about becoming OPEC’s new President and what his outlook is for the country’s energy future

Firstly, congratulations on becoming OPEC’s new President – What do you hope to achieve in your term as President?

The most important job is to keep OPEC and OPEC+ together and continue driving the goals of the declaration of cooperation. Then ensuring a stable market. We have to guide the market against volatility while ensuring that data remains a tradition which drives our decisions to control the market.

A number of challenges including lack of adequate investments to boost activities across the entire oil value chain continue to disrupt operations and production in oil exporting countries. 2023 will be characterised by various initiatives, and policy and programmes’ revitalisation by OPEC and its member countries to accelerate investments across the upstream, midstream and downstream sectors. I believe increased participation by the private sector and international financiers in financing oil exploration and production in emerging countries such as in Africa will be crucial in shaping global energy security considering the demand for hydrocarbons will continue to increase.

I hope to see accelerated private sector funding in oil developments through supportive institutions such as the OPEC Fund for International Development and Afreximbank. With African stakeholders cooperating on the development of the African Energy Transition Bank, 2023 is going to be an exciting year in terms of boosting oil investments across the continent.

In addition, there are risk factors such as the Russian-Ukraine war, China-U.S. tensions and a global recession which we are closely looking at and wanting to avoid their negative impacts on the global oil market.

What are the most important developments for Equatorial Guinea’s oil and gas industry in the last 12 months?

2022 has been an exciting year for us in Equatorial Guinea. We managed to keep our production steady while maximising partnerships with global companies including Trident Energy, Kosmos Energy and Panoro Energy to boost exploration and with other African countries including Namibia and the Democratic Republic of Congo (DRC) to enhance local content and capacity building as well as our capabilities across the entire value chain.

Egyptian company, TAQA Arabia, launched its first delivery of compressed natural gas-powered vehicles as part of efforts to fully maximise our gas reserves while reducing emissions from the transport sector.

Nigeria also delivered its first gas for processing at Punta Europa as we positioned ourselves as a regional gas processing hub. We also had China Railway Construction Corporation and CIRDL partnering with GEPetrol to build a refinery in Malabo. In addition, we played a lead in the launch of the Central African Pipeline System - a regional network that will unlock central Africa’s energy potential in alleviating energy poverty and driving socioeconomic developments.

How positive are you for the country’s energy future?

Despite the accomplishments we achieved in 2022, the year is a prelude of the year(s) ahead since it was an election year for us. Now that the elections are done, we will be conducting a lot of discussions and conclusions with a lot of industry players to maximise Equatorial Guinea’s hydrocarbon industry potential.

We have over 1.5 trillion of proven natural gas reserves which remain untapped, a number of exploration activities underway and in planning stages such as new wells drilling in Block G in the second half of 2023 and massive discoveries awaiting development such as Fortuna and Zafiro. If we combine these with already producing wells, the future of Equatorial Guinea’s energy sector is bright.

We plan to maximise the Gas Mega Hub to unlock the region’s massive gas reserves which remain stranded. The finalization of our new hydrocarbon law this year will also bring new investors into the country. With the demand for energy especially natural gas increasing across the globe, I am confident Equatorial Guinea’s energy sector has a huge role to play in driving economic growth locally and across the region while shaping global energy security.

What new partnerships are underway to develop resources and support the country’s growth aspirations?

Equatorial Guinea is spearheading the development of the Central African Pipeline System, in which we have already secured agreements with various countries such as Angola, Cameroon, Chad, the Republic of the Congo, the DRC and Gabon. The network, once operational, will bring in a new era of energy development and monetisation for Equatorial Guinea and its neighbours. We have also agreements in place with Nigeria and Cameroon, as part of the Gas Mega Hub, to maximise our midstream and downstream operations. We are now focusing on developing our own market at local, regional and continental scale not just prioritise developing our resources and sending them to international markets. When we send to global markets, we want to continue doing so through long-term contracts. We have a lot of firms in exploration and majors in production and we are prioritising boosting partnerships with companies who are willing to reinvest in existing wells while drilling new exploration projects to expand reserves. Lastly, we will be focusing more on gas because gas is the energy resource of the future that will drive our growth aspirations.

How has Equatorial Guinea’s energy sector become a more attractive destination for foreign investment?

It is simple, the hydrocarbons sector contributes 90 percent of Equatorial Guinea’s GDP and with that in mind, to drive economic growth, we have focused on creating an enabling environment for industry players. Through licensing rounds and direct negotiations, we are continuing to position the country as an attractive energy investment destination with global majors such as Kosmos Energy, ExxonMobil and Chevron as well as independents such as Marathon Oil, Atlantic Methanol, Trident Energy, Gunvor and Vaalco Energy and more, operating in the country.

You are a big supporter of EGYPS, how important is this regional platform for advancing the global conversation on energy transition?

To achieve energy sector expansion and progress, partnerships between global energy markets and between the public and private sector stakeholders will be crucial. Improved cooperation between Egypt and its neighbouring countries in North Africa and the Mediterranean will be vital to shape the energy transition and energy security in Europe and across the globe considering the events which have taken shape in the aftermath of the Russian-Ukraine war. Gatherings such as EGYPS represent an ideal platform to unite industry stakeholders to discuss market challenges and opportunities.

His Excellency Gabriel Mbaga Obiang Lima the Minister of Mines and Hydrocarbons of the Republic of Equatorial Guinea is speaking at the EGYPS 2023 Strategic Conference in Cairo on Monday 13 February, where he will share his inputs on addressing the realities of current converging market dynamics.

Register today at www.egyps.com/delreg