The Organisation of the Petroleum Exporting Countries (OPEC) works to co-ordinate and unify petroleum policies among member countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry. This means OPEC has the ability to sway crude oil prices by increasing or decreasing production.
The organisation that was founded by five countries, namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, has had a Middle Eastern majority – until recently. Today Africa prevails in OPEC, with the number of countries from the continent up to seven, compared to the Middle East’s six.
These countries are Libya (1962), Algeria (1969), Nigeria (1971), Gabon (1975), Angola (2007), Equatorial Guinea (2017) and Congo (2018).
Africa and OPEC: Development or lack of foresight?
For OPEC, Africa represents an opportunity to secure alliances with new producers. For Africa, OPEC represents an opportunity to have a voice on the global stage. As oil and gas production declines in the Middle East, Africa is currently one of the world’s oil and gas frontiers. African countries are increasingly looking to OPEC as an alternative to Western-focused policies and for coordination and investment in the energy sector. Despite all this, experts say the OPEC-Africa alliance may only hold while production cuts hold; once production cuts expire and prices rise once again, the resilience of the new union will very likely be tested.
In what could be a premonition of the future, Equatorial Guinea’s minister of mines, industry and energy, Gabriel Obiang, told a conference in Cape Town, “If, in 10 years, oil becomes a commodity that the developed countries don’t want—they want to focus on just gas, solar—what are the African countries going to do?”
Bloomberg.com reported, “It’s very important to know what our brothers, our bigger brothers in the region, are doing; what Nigeria is doing, what Algeria is doing.” Algeria, sub-Saharan Africa’s third-biggest oil producer, is attempting to raise dialogue on a strategy for a world where energy demand veers away from crude.
Energy trends in the last decade
While OPEC continues to seek stability in the market and looks to further enhance its dialogue and cooperation with consumers and non-OPEC producers, green energy has increased its priority status. The world’s focus on multilateral environmental matters has sharpened in the last decade, with expectations for UN-led climate change agreements to streamline efforts.
In an audit of the global Paris Agreement, released in 2017, the UN Environment Programme found that if action to combat climate change was limited to current pledges, the earth will get at least three degrees Celsius (5.4 degrees Fahrenheit) warmer by 2100, relative to preindustrial levels.
The report’s release came on the eve of COP23, a sequel of sorts to the 2015 UN meeting that spawned the Paris Agreement, and after the UN confirmed that 2016’s atmospheric CO2 levels were the highest the earth has seen in the last 800 000 years, with methane levels also reaching record highs.
“One year after the Paris Agreement entered into force, we still find ourselves in a situation where we are not doing nearly enough to save hundreds of millions of people from a miserable future,” Erik Solheim, head of UNEP, said in a statement. “This is unacceptable. If we invest in the right technologies, ensuring that the private sector is involved, we can still meet the promise we made to our children to protect their future. But we have to get on the case now.”
“We still find ourselves in a situation where we are not doing nearly enough to save hundreds of millions of people from a miserable future.” – Erik Solheim, head of UNEP
In 2017 renewables had the highest growth rate of any fuel, meeting a quarter of world energy demand growth, as renewables-based electricity generation rose 6,3%, driven by the expansion of wind, solar and hydropower, according to the same report.
If developing nations are given enough financing to make the sustainable shift into green energy and the US, which withdrew from the Paris Agreement, is brought back into the fold once a new regime comes into power, then crude may very well be on its way to obsoletion.