With production declines presenting newfound challenges for Africa, stakeholders are pushing for enhanced exploration to help mitigate this trend. Despite global calls to transition to renewable energy sources, Africa still needs its oil and gas reserves if it is to meet its development goals and make energy poverty history by 2030.

In an exclusive interview with the African Energy Chamber, Tim O'Hanlon, Senior Advisor for the Oslo-listed energy and power company, Panoro Energy, provides critical insight into Africa's changing energy sector.

What will this production underperformance in Nigeria, Libya, Angola, Congo, Equatorial Guinea and African countries mean for the continent as a whole?

For the individual countries involved it is definitely a significant setback and a direct blow to their economies since they have probably been too slow at diversifying away from oil and gas and investing the windfall resource revenues of the last decades into more sustainable sectors like agriculture, industry and services. But for the majority of Africa's 54 countries with little or no production, I honestly don't see much impact, one way or the other. 

What do you feel are the primary reasons influencing production decline in Africa?

Oil production is falling across the Continent for a number of reasons but mainly due to lack of exploration for new reserves to maintain production profiles, a lack of investment in existing fields and civil strife. The last point is easiest to understand.

The required investment – which normally flows in from outside the Continent - quickly dries up when Governments are unable to provide a secure and safe working environment. Thereafter, frontier exploration spending is always discretionary for IOCs and is the first to be cut when oil prices collapse as they did in 2014.

Even today, with the oil price still below 2014 levels, IOCs are facing an overnight and extreme (I would say often hysterical) pressure, mainly from "sorted" Western society, to halt all future exploration, particularly for oil. For the same reason, even some mature producing African projects are being starved by their IOC operators of the capital required to maintain or improve production - normal good housekeeping if you like.

Tranches of mature producing assets are becoming available as the industry consolidates and as certain IOCs even recede from the Continent altogether. This exodus is sadly accelerated by certain African Governments being a bit slow to react to these market forces by easing fiscal terms as they should in response to the deteriorating investment climate for IOCs.

What can be done to turn this around?

All is not lost. Firstly, it is very encouraging to see some of the Majors – notably TotalEnergies and ENI – holding their nerve and sticking with the Mother Continent notwithstanding the background noise. While they are understandably shedding certain non-core mature producing African fields, they are also still drilling the occasional frontier wildcats and it is paying off.

ENI has just had a whopper of an oil discovery in Ivory Coast, TE a major gas discovery in SA and both continue to invest in the massive projects up the East African coast from Mozambique to Uganda to Egypt.

And good luck to them I say. Secondly, the existing crop of experienced Africa-focused E&P players (Perenco, Trident, Panoro, Tullow, Assala...) together with their African brothers (Seplat, Oando, XXXXX, YYYYY...) are being joined by an emerging group of impressive start-ups (Baobab Energy Africa, Boru Energy, Afentra and others) ready and able to replace any exiting Majors and inject new life into mature assets. With the right fiscal incentives, these NewCos will extend into exploration and add the desperately needed new barrels to the African pot.

What would you recommend as an industry approach to low carbon gas monetization and financing in Africa?

It would probably be futile to try craft an industry-wide approach here. Our African E&P industry is adept at dealing with challenges, whether from Mother Nature or the societies they serve. Ever pragmatic, commercially driven and science-based, both large and small IOCs are already quietly embracing the Energy Transition imposed upon them by Climate Change.

Gas is fast becoming the new oil for explorers and its monetization less of a headache than it was before. When we started Tullow back in 1986 our first project was, by chance, gas for power generation in Senegal. But this was the exception back then when a gas discovery could get a geologist fired being akin to a dry hole in the pursuit of oil.

It is all change now with many of Africa's then "stranded gas reserves" on production today serving domestic power needs or the international LNG market. Once nearly impossible to finance, gas developments are now much more bankable and even dedicated gas exploration is being given the green light by shareholders.

The morally bankrupt notion that tiny-carbon-footprint Africa should leave its enormous gas reserves undeveloped and "stay poor" while Europe remains plugged right in to existing African gas production has been given short shrift by Africans.

What should new independents consider while entering a changing African energy sector?

While on the one hand it seems like all change these days, on the other hand nothing much has changed for any independent entering the African energy sector. This is because presumably, as savvy actors, they will already know that change is just about the only constant in our game.

The new paradigms of "less oil please" or "more gas please" or "your project must be carbon-neutral" are just the latest set of problems to solve for what are at the end of the day professional problem solvers. They will already by technically top-drawer, risk-tolerant and alert to the sometimes extreme above and below-ground challenges but still excited by the immense rewards available in Africa for the tenacious.

And I don't just mean shareholder returns here but the type of satisfaction derived from being able to add sometimes billions of dollars to the economies of developing African nations by just doing you day job to the best of your abilities - just as we did at Tullow back in the day...

Is it time for Model Gas/LNG Production Sharing Agreement?

I am not aware of any gas projects lying idle and undeveloped across Africa due to the absence of standardized Gas PSAs or similar. Gas monetization has always been more complex than oil. Even small quantities of gas can be worth a fortune if you find some close to a hungry gas grid or near worthless if found in a remote area even in large quantities. On the other hand, oil fetches much the same price in Chad, Chile or China! But this additional complexity in financing gas development projects is an equal burden for both the host Government and the gas-finder IOC.

It is always just about finding the equitable balance of risk and reward for these actors who are well-used to thrashing out such agreements. If it is not happening it often simply means the host Government has an inflated opinion of the value of their gas project and the lazy capital has simply flowed elsewhere.

In these times of the COVID-19, organisations should provide support for employees as a routine aspect of their operation, advises Arjun Mallik, MD Prudential East Africa. He adds that if staff members are cared for, the wider community is strengthened.

Mallik says that COVID-19 and its resultant ebbing lockdown periods have been a stressful time for people all over the world including in Africa therefore emotional wellness of people should be at the forefront of most companies’ plans.

While businesses are grappling with how to sustain themselves, they should simultaneously be taking care of their employees. For Mallik and Prudential, they have rolled out simple initiatives to address mental health among employees.

Below are excerpts of an interview in which Mallik explains what they are doing at Prudential East Africa to avert COVID-199 induced mental health issues.

What key learning lessons has Prudential Africa attained as a result of operating in the COVID - 19 pandemic?

Collective trauma as a result of COVID-19 happened at a societal level while making individuals more inward-looking. Our employees in Ghana, Kenya and Uganda are experiencing heightened trepidation due to everyday uncertainties, less interaction with colleagues and concerns for family safety. Inevitably, employee pressure equals business pressure.

We find that it requires more mindful work within our workplace to balance business objectives and life’s normal needs and responsibilities.

With 60% of its population under the age of 25, Africa is the youngest continent. The continent continues to offer businesses the best prospects for future growth. Human capital is a vital prerequisite for capitalising on opportunities ahead. 

To fully unlock the potential of the vast human resources available it is paramount that each individual is provided with an atmosphere to develop, maintain and grow their mental wellness, which has taken a knock during the pandemic.

Our experience shows that for employees to reach their potential, to contribute meaningfully and to create value in a workplace they must be in the right state of mind.

Shareholders and managers demand a lot from staff and excess stress of this kind leads to mental and physical break downs and sometimes burnout. If someone is anxious, stressed or depressed, they become less attentive and less productive and it sets back their growth potential. Awareness and acceptance of this stress is part of the key to the mental fitness of employees and should never be overlooked.

Although COVID has negatively impacted our lives, it has given people the confidence to admit that they need help and support and to recognise that mental wellness is a priority.

Moreover, at Prudential Africa we have realised that if we give our employees the opportunity to be heard and to heal emotionally, we create an atmosphere for them to bounce back quicker.

Prudential Africa, believes that the first step is to bring the conversation about mental wellness into the open – to acknowledge it, talk about it and, finally, in unison with staff, find solutions to improve. 

What has Prudential Africa invested in to support building staff emotional wellness? 

Prudential Africa has invested in a dedicated programme that ensures the following:  

• Alleviates stress and builds tool and resources to help staff and managers recognise and act on emotional wellness issues.
• Exhibit management commitment by providing holistic and sustainable solutions in order to foster a sense of community
• Create a culture of openness for all staff to perform at their best.
• Encourage all employees to be accommodating, to listen and to assist with the emotional issues their colleagues are facing.
• Ensure that the programme transcends beyond the COVID pandemic.

What other tools has Prudential Africa inputted into the staff emotional wellness program to ensure its success?

• Third party experts presenting on topics such as gratitude and how to balance work and play.
• Provide staff with tools such as meditation techniques to handle stress.
• Train managers to identify warning signs within their team or among colleagues - provide them with a toolkit to help them conduct a conversation around emotional wellness.
• Introduce flexi hours which allow staff to do their work and remain in a safe environment – to be with their families and deliver at work.
• Install a 24/7 confidential counselling line run by a professional third party for staff and their dependants.
• Host more teambuilding activities that increase bonding among staff in and out of office to increase collaboration and to keep motivation high.

The ultimate message to staff should be – you are not alone – everyone has mental challenges in different ways and we are all in this together. You should be able to show up to work in the best possible form of yourself.

The National Resistance Movement (NRM), the largest and ruling political party in Uganda, is preparing for the 2021 general elections by electing persons to represent them in the national elections at different levels.

The concluded National Delegates Conference held at each of the district headquarters approved the endorsement of President Yoweri Museveni as national chairperson and presidential flag bearer. It elected members of Central Executive Committee.

Now the party is looking at selecting through the NRM party primaries individuals to contest in the general elections as Members of Parliament (MPs) and district local council leaders. MP slots are expected to be highly contested.

The ruling party will take no chances as it looks forward to retaining their majority representation in parliament. They cannot afford to lose even a single slot and for that matter, it will be looking at fronting the strongest candidate who then will battle contenders from other political parties or independents.

Kampala, the epicentre of Uganda’s politics, has some interesting races but being a predominantly an opposition stronghold, Kampala Central, a constituency that has never fallen in the hands of the opposition, has attracted some interesting young candidates at party level.

Poor Youth Coming For Nsereko’s Kampala Central

Kampala Central is occupied by Muhammad Nsereko, currently an independent but a known NRM person. In fact, he was an NRM candidate the first time he contested and won to become MP. He hasn’t expressed intent to reclaim his NRM cap preferring to remain independent.

In the party primaries race, Kampala Central has attracted Kato Isa, famously known for his activism with NRM Poor Youth, Cedric Babu Ndlima, the son Francis Babu and others who will be gunning to capture the blessings of the party.

In an interview with News Today Uganda, Kato Isa comes off as the winning formula that the party needs to reclaim the constituency from an unreliable NRM leaning independent Nsereko.

Kato, has been an active member of NRM right from the university days and at the village level. He resides in William village, Nakasero parish, Kampala.

"I was the general secretary Makerere University NRM Chapter.  When I came out, I concentrated on working and getting more education abroad. When I came back, in 2014, we started the NRM Poor Youth. We did a lot of activism. We were majoring in rooting for rule of law, fighting corruption and empowering the youth," he said.

Through activism under NRM Poor Youth, Kato and his colleagues caused reforms in the party and governments. To date, they are still active fighting corruption in government institutions like Bank of Uganda but they feel the time to upgrade from activism to policymaking is now hence his pursuit to become MP.  

"You know being an activist means that you have a cause and as NRM Poor Youth we had a cause and it doesn’t end at just that, being an activist.  Now we need to also influence decisions.

We have been pushing but there is somewhere where decisions are made, that is where I want to go, the parliament, and take these activism ideas there. We all know the powers that parliament has – everything has to be implemented, supervised and audited in parliament and that is where we need to go right now.”

I Am A Strong Candidate In A Strong Party

Kato is confident that NRM can retain Kampala Central because it is strong with majority voters. “I can give you an example. We have 136 villages and 90 per cent of the chairpersons of these villages are NRM. That gives us the leverage to feel in charge of the city,” he explains.

But with this support and base, Kato believes that the incumbent who enjoys the perks of the party in power has given the electorates a raw deal.

“He is just an MP who keeps in the media but on the ground, we feel that there has been a very big gap which he created within the leadership of Kampala who he should be working with because they are stakeholders.

In the ten years, he has been in parliament, he has never held village meetings to consult, even at parish level – we have 20 parishes – he has never held a meeting to consult. He has abandoned his electorates,”

Kato says he is a strong candidate compared to others and he has premised his manifesto on developing a city that doesn’t compromise its residents. This, he says, requires working together and consulting all stakeholders whose lives and survival are connected to the decisions made by the city leadership.

Boda Bodas, Markets And Education

For example, on the issue of boda boda operating in Kampala, Kato sees no reason why they should be chased out of the city but instead provided lanes in which they can operate without inconveniencing others.

"Why wouldn’t the city physical planners put up walkways and cycling lanes instead of chasing away people. The country is only planning for car drivers; so, I want to advocate for the construction of walkways.

We can work with the technical planning team at KCCA because the plans are there but have not been implemented.  Then we can have cycling lanes, these can give us a breather,”

By the look of things, we shouldn’t expect Kato to advocate for the chasing of boda boda riders out of the city anytime soon. The other key issue in Kampala is the fate of markets. He says that markets are catalysts of development and government should apply the method of zoning so that development is spread across the city and shared.

Kato’s other big ideas are the education sector where he wants to improve academic and sports performance; tourism is something where he wants to tap into by promoting tourist attraction sites in the city and the introduction of themed festivals.

At 35, Zion Adeoye is the youngest Managing Partner at an African multi-national law firm. Appointed in 2020 to head the Centurion Law Group, Zion embodies a new generation of African lawyers leading the continent into the transformations that will place Africa as the 21^st century’s success story.

As he reflects on his professional journey so far, he shares his lessons to any young Africans in search of a meaningful legal career on the continent.

Called to the bar in 2011, Zion holds an LLB from the University of Ibadan in Nigeria and a BL from the Nigerian Law School. Having spent most of its early legal career in Nigeria working on cross-border energy transactions, he moved to South Africa in 2017 to take on the position of Senior Associate Attorney at Centurion, before being promoted to Managing Director this year.

“By my third year at the University of Ibadan, I knew what I wanted to do was specializing in Energy Law. In fact, I had an unconventional journey because I completed by NYSC programme at the Nigerian Petroleum Development Company (NPDC) before proceeding to Law School,” he recalls.

His early career in Nigeria would then take him to the Tax division of KPMG and eventually to top law firms in Nigeria such as Terra Cotta Legal, Olaniwun Ajayi LP and Templars, before moving in-house at the Transnational Energy/Bresson Power Group. Such experience has offered Zion a decade of expertise in energy, finance and taxation law, which has been the pillar of his success at the Centurion Law Group.

Swimming Against the Current: Beware of the Underdog

As a young Nigerian lawyer working for a pan-African energy law firm, Zion has been in the position of the underdog more than once in his career. “When you are a relatively young energy lawyer in Africa and practice law on a meaningful level, you get used to walking into a room and having people questioning your credibility,” he explains.

“This is especially true of the oil & gas industry where a lot of deals are still made outside the continent in big places like Paris, London or New York by lawyers who are twenty to thirty years older than you and very often educated in big international universities. I have quickly learned to trust my African education and experience gained from doing deals on the ground. Trusting your abilities is key if you want to make it in this industry.”

From his experience gained doing deals in Nigeria but also Zambia, Uganda or South Sudan, Zion believes that a practical mindset and local understanding is how African lawyers can make the difference in a very competitive industry. “Do not let your age or gender bring you down. At the end of the day, clients will be judging you on the quality of the work you do. Do not be afraid of being the underdog,” he says.

Leading in Unchartered Territory: the Challenges of a Changing Legal Profession

As the legal profession worldwide enters unchartered territory, it is in need of leaders who understand both the evolving needs of clients, but are also willing to adopt new technologies and innovate to make their practice more efficient.

With the launch of its new on-demand legal services platform, CenturionPlus, the Centurion Law Group is bringing to Africa a new legal approach to solving clients’ requirements on a need-basis. “CenturionPlus is an answer to clients’ demand for more flexibility in the delivery and billing of their legal requirements, but also responds to the increasing complexity of corporate and commercial transactions made in Africa,” explained Zion.

“Managing an African law firm in 2020 presents a lot of challenges, especially because our continent is growing so rapidly. You need to make sure your team stays ahead the curve and that your practice is constantly innovating to deliver on clients’ expectations. As a team leader, this requires you to build consensus and align your team around one vision and determination,” he added. 

Despite a challenging environment these past years, Centurion has remained ranked Band 1 law firm in its key jurisdictions such as Equatorial Guinea while its senior lawyers are constantly recognized for their contribution to the industry. At the end of 2019 for instance, Zion was recognized as an ESQ 40 under 40 Lawyer at the Nigerian Rising Stars Award.

Adapting to Change: Managing Multi-Cultural Relations with Clients and in the Workplace

Often described as one entity, Africa is one of the most culturally-diverse continent on the planet. Its 54 countries speak hundreds of languages, have their own particular legal regimes, and are at different stages of economic growth. Growing a pan-African practice requires a deep understanding of social and cultural nuances across Africa, which many executives often under-estimate.

“The oil sector is one of the most internationalized industries so by nature you will be dealing with clients from all over the world willing to invest and do business in African jurisdictions that can be very different from one another,” declared Zion. “Do not make the mistake of thinking that because you have done a deal in Ethiopia, you can do the same deal easily in Ghana. Similarly, having as a client a major American oil company is not the same as working on a transaction for a major Chinese oil company. I have seen many law firms and lawyers making these costly mistakes,” he added.

To address this issue, Centurion has kept regionalizing over the years and currently has offices in Equatorial Guinea, Cameroon, Ghana, South Africa, Mauritius and Germany. It has also diversified its lawyers and attorneys, who currently come from over 10 countries and notably speak English, French, Spanish and Portuguese.

“If you want to be successful at managing your law firm, you need a multi-cultural mindset and an understanding that people from different countries and background do business differently and communicate differently,” declared Zion.

“I always found that my legal background has been useful in this regard. As lawyers we are used to finding the right balance between technical, financial, commercial and legal aspects of a transaction. Managing your team takes the same approach of arranging different pieces together to attain a common goal.”

With this leadership style, Zion has earned himself a strong reputation among its peers and the firm’s leading clients from across the continent. When asked about what his biggest challenge was on accepting the responsibility of managing the firm earlier this year, he said: “The biggest challenge when you manage a law firm is having two jobs at the same time. As a Managing Director, I have to oversee several support departments such as business development and marketing, along with supporting other lawyers at the firm and coordinating our strategy. But I am also a lawyer with my own practice having to retain our biggest clients.”