Inside Business Africa INSIDE BUSINESS AFRICA APRIL 2019 - Page 20

Agri-business I N S I D E B U S I N E S S A F R I C A Getting the praises OPEC Praises Nigeria, 8 African Countries for Helping to Stabilise Oil Market T he Organisation of Petroleum Exporting Countries (OPEC) has said that more than one- third of the 24 countries currently working together under a negotiated framework to cut down oil outputs and inventories, to stabilise prices in the global market were from Africa. It explained that these countries included Algeria; Angola; the Republic of the Congo; Equatorial Guinea; Gabon; Libya; Nigeria; Sudan; and South Sudan, adding that they were contributing to the oil market stabilisation efforts it initiated with non- OPEC oil producer led by the Russian Federation within the 'Declaration of Cooperation' framework reached in 2016. Speaking at a recent conference organised by the African Petroleum Producers Organisation (APPO) in Equatorial Guinea, OPEC's Secretary General, Dr. Mohammed Barkindo, also stated that the cartel recognised the need for more oil inventories to drop despite some healthy developments from their observation of the agreement to cutback their production levels to rebalance the market. "When looking at the 'Declaration of Cooperation' it gives me great pleasure to say that over one-third of the 24 participants are from Africa: Algeria; Angola; the Republic of the Congo; Equatorial Guinea; Gabon; L i by a ; N i g e r i a ; Sudan; and South Sudan. "Moreover, half of OPEC's Membership comes from this continent of Africa. This underscores the vital role this great continent plays within OPEC, within the 'Declaration of Cooperation', and within the global oil industry," said Barkindo. He explained that in terms of oil, Africa has around 130 billion barrels of proven crude oil reserves; an increase he noted was around 50 per cent since the end of last century. "And in terms of proven natural gas reserves, the figure is over 15 trillion standard cubic metres, a number that has more than doubled since the mid-1980s. "It is irrefutable evidence of the petroleum potential of Africa, the exciting and abundant opportunities, and the role that this industry can play in unleashing tremendous economic development and prosperity across the continent," he added, while calling for countries of the continent to build alliances to make the most of their hydrocarbon resources. Turning to the status of the oil market, Barkindo, stated that the OPEC recognised the current, critical uncertainties surrounding the global oil market throughout 2019, and stressed on the shared responsibility of all participating countries in the 'Declaration of Cooperation' to sustain market stability and prevent the recurrence of any market imbalance. He explained that: "Every country understands the importance of 20 u t APRIL1 4 - 28, 2019 Trade & Investment THE MAGAZINE 0F THE CORPORATE WORLD achieving full and timely conformity with their voluntary production adjustments under the decisions of the 175th Meeting of the OPEC Conference and the 5th OPEC and non- OPEC Ministerial Meeting, on the 6 and 7 December 2018. "Overall conformity levels to the new voluntary production adjustments, reached almost 90 per cent for the month of February 2019, which is up from 83 per cent in the month of January. We expect them to improve further in the coming months. "While we have seen a marked improvement in market conditions in the 1Q19, compared to the turbulence and volatility of the 4Q18, with the market steadily moving towards a more balanced state, we still believe we need to see inventory levels drop further." According to him, "We also recognise the fact that underlying risks remain, such as ongoing trade negotiations, monetary policy developments, as well as increasingly complex geopolitical challenges and climate change-related concerns. "Additionally, we need to see a further pick-up in industry investments, particularly for long cycle projects. We need to remind ourselves that exploration and production spending fell by an enormous 27 per cent in both 2015 and 2016, and only increased by 8 per cent in both 2017 and 2018." He added that it was for these reasons that the cartel and its partners have continued to take a very measured approach through the 'Declaration of Cooperation', saying, "we look at the economic and market outlook, and we listen to consumers and other stakeholders." "The 'Declaration' is not about short- termism. We are focused on continuity; we are steadfast and completely unwavering; we have long-ter m objectives and goals. "This was exemplified in Baku through further statements of support by participating countries for a permanent intergovernmental platform, under the Charter of Cooperation between Oil Producing Countries," he added. Bouted out Abdelaziz Bouteflika steps down after 20 years in charge of Algeria His regime, meanwhile, has fallen to infighting E VEN HIS critics found Abdelaziz Bouteflika's last moments as president difficult to watch. After two decades in power, the Algerian leader stepped down on April 2nd. Slumped in a wheelchair, dressed in a baggy djellaba robe instead of his usual three-piece suit, he looked like a doddering old man roused from bed in the middle of the night. He struggled even to hand his letter of resignation to the head of the constitutional committee (a stroke in 2013 left him an invalid). Mr Bouteflika styled himself a partisan and a politician who fought for Algeria's independence and led the country out of civil war. There was no glimpse of that man in his final public appearance as president, only a frail shell. Algerians flooded into the streets to celebrate a moment that was unthinkable two months earlier. Mr Bouteflika was tipped to win a fifth term as president, the only viable candidate in a stage-managed election. But in near-daily protests since February 16th, hundreds of thousands of Algerians demanded his resignation. Ye a r s o f c o r r u p t i o n a n d mismanagement had left the oil- and gas-rich country with a big deficit and 1.4m unemployed. Mr Bouteflika's subjects were unwilling to endure five more years under a president barely able to speak. Le pouvoir (the power), as the officers and oligarchs who really call the shots are known, stalled for time. In March Mr Bouteflika, or whoever drafted the letter for him, promised not to stand for re-election and to oversee a transitional period. Then he offered to quit before the end of his term on April 28th. None of this appeased the street. Nor did it pass muster with the army chief, Ahmed Gaid Salah, who asked the government to declare Mr Bouteflika unfit and remove him. In the end it was General Salah's threats that drove the president out of power: though described as a resignation, it looks more like a sacking. Abdelkader Bensalah, the head of parliament's upper house, becomes Abdelaziz Bouteflika t 33 u APRIL1 4 - 28, 2019 interim president and must organise elections within 90 days. Mr Bensalah, a Bouteflika loyalist, is familiar with the duties, for he often stepped in when the ailing president was too ill to welcome foreign dignitaries and suchlike. He backed the president's plan to seek a fifth term and did not endorse the protests. His elevation may give succour to Mr Bouteflika's allies-except that many of them seem to be in custody. It is hard to separate fact from rumour right now: Algeria's politics are opaque and it lets in few foreign journalists. But there are credible reports that Said Bouteflika, the president's powerful brother, is under house arrest. Ali Haddad, a construction magnate who grew rich off state contracts, was detained last month while trying to cross the Tunisian border, supposedly with a large sum of cash in his car. He served for years as the head of Algeria's main business federation and was a Bouteflika ally. The regime is justifiably worried about capital flight. Within nine months of the revolutions in Egypt and Libya in 2011, residents had withdrawn $8.6bn, says the Bank for International Settlements, a Basel-based financial institution. Many of Mr Bouteflika's allies made a fortune through corrupt contracts and want to protect their gains. Ahmed Ouyahia, a four-time prime minister, was barred from leaving the country (allegedly while trying to drive his Mercedes onto a ferry bound for Spain). He denies reports that he sold his home in Hydra, a wealthy district of Algiers. The villa is rumoured to be worth some $4m, a princely sum on a civil-servant's salary. But the list of detainees looks rather like a purge orchestrated by General Salah. A former president, Liamine Zéroual-himself pushed out by the army in 1999-recently wove a tale of intrigue in a letter to an Algerian newspaper. He claimed that Mohamed Mediène, a retired spy chief who was the longtime éminence grise of Algerian politics, asked him to oversee a transitional period. Said Bouteflika