Africa needs help from US to develop and refine power sources

Africa needs the United States to be not just a partner in exporting crude oil but a partner in helping the continent develop and refine its own power sources, energy officials told their US counterparts on the second day of a forum to boost trade ties.
Crude oil worth some $ 24 bn made up the bulk of African exports towards the US last year under the African Growth and Opportunity Act (AGOA), which exempts qualified African products from US import duties.

Africa's main oil exporters -- Nigeria, Chad, Angola and Gabon -- have in the last year exported some 9 mm bpd providing for 18 % of US oil needs, according to George Person of the Africa section of the US department of energy. That proportion will likely be boosted to 25 % over the next decade, he said, proving that "energy is clearly important to economic development in Africa". But with limited infrastructure in their energy sectors and no refineries of their own, the lights in these countries are rarely on and petroleum products need to be re-imported to deal with domestic demand.
"We are not able to capitalise on the wealth of oil resources we have in our country, either for export or for use at home," said Chad's deputy petroleum minister Yoboussoum Nodjitoloum.

Among the methods proposed to add value to the light, sweet crude pumped off-shore or sent down pipelines for transport is harnessing the natural gas that flares with the extraction of oil -- to "monetise" that resource, said Person. Investments in liquefied natural gas, or LNG, of which Africa boasts substantial reserves, can also develop the energy sectors in countries prepared to sign agreements with US companies.
"But the United States can only encourage the development of the power sector, and encourage sovereign nations to make that their own priority when they reach agreement with oil producers," Person said.

To attract needed investment to exploit oil resources and develop energy sectors, he added, African governments need to be more transparent in their accounting and crack down on "non-technical losses" or corruption.
"Ultimately, it's about providing a favourable rate of return for investors," he said.

But according to Elisabeth Tankeu, trade, industry and energy commissioner for the African Union, that favourable rate of return is often at the expense of Africa's poor, who reap few benefits from being citizens of oil producing nations.
"All of the countries that live from extractive resources are still poor -- what about helping us transform those resources here?" she said. "We are happy to hear that you want to help improve development in Africa but by focusing on our oil, and not helping us properly benefit from it, you may find that it is only going to help widen the gulfs between nations and risk starting conflicts."