The African Petroleum Legislation Atlas

1 Background Information

1. 1 The African Legal Support Facility—ALSF

The ALSF is an international organization established by Treaty in 2008. The office is hosted by the African Development Bank (AfDB). Its membership is open to (a) every AfDB member state, (b) other states, (c) the AfDB itself, and (d) other international organizations or institutions. The ALSF’s main objectives include:

Assisting the AfDB’s Regional Member Countries address litigation brought against them by vulture funds (and other such entities).

1. Creating an avenue for regional member countries to access technical advice when negotiating complex commercial transactions relating to infrastructure, extractive resources, PPPs, debt, and related commercial agreements.
2. Investing in and organizing legal counsel training from participating RMCs to equip them with the legal expertise necessary to represent their countries’ interests better.
3. The development of knowledge products.

1.2 The African Natural Resources Centre—ANRC

This is a non-lending department of the AfDB with a mandate to assist African countries to maximize development benefits derived from natural resources. The centre encourages the capacity of African countries to achieve sustained and inclusive growth from these resources. To achieve this, it offers:

• Practical knowledge and expertise.
• A technical helping hand and advocacy support for improved and transparent management of renewable and nonrenewable resources.
• Advisory services.

The core actions of the centre include (i) policy advice, (ii) advocacy, (iii) technical assistance, and (iv) knowledge building.

1.3 The African Petroleum Legislation Atlas—APLA

APLA is a project aspiring at legislation gathering, organization, dissemination, and capacity building and utilization. The APLA Project involves three main activities, namely:

1. The formulation of the APLA platform, a free online one-stop resource for the continent’s petroleum legal frameworks (petroleum regulations, standards, and laws) with interactive features to provide comparative data.
2. Reproduction a guiding template, an annotated document that outlines a menu of legislative solutions to assist countries in preparing or revising their petroleum laws.
3. Capacity building by means of training (on-ground and remotely) of African legal professionals, students, and researchers in using the online platform and on overall subjects in petroleum law.

Together, the ANRC and ALSF aim to develop the APLA Platform to support African countries in maximizing the benefits from their petroleum resources through promoting transparency, accessibility and comparison of Africa’s petroleum laws.

Furthermore, it pursues facilitating the preparation, revision and implementation of petroleum laws; providing a living database that will propel research and policy debates on legal and regulatory issues; and promoting local legal expertise on African petroleum laws. Progress of the APLA Platform will be managed by a committee comprising officials of ALSF and ANRC (the “APLA Secretariat”).

2 The Platform

2.1 From a Pilot to a Full-Scale Platform

As a precursor to the implementation of the ultimate APLA Platform, a pilot platform has been developed as a one-stop database hosting all the petroleum laws, regulations and related legislation from four (4) African countries: Nigeria, Chad, Ghana, and Congo-Brazzaville, in an easily readable, searchable and downloadable format.

The APLA Pilot Platform will assist as a prototype for the development of a comprehensive APLA Platform. The APLA Pilot Platform has been colonized by advanced law students forming the Legal Research Team (LRT). The LRT for the pilot phase were picked from a leading African university with sharp literacy in petroleum law. To populate the APLA Pilot Platform, the LRT commenced training on how to process and analyze petroleum laws and whereby to upload the laws and regulations on the platform.

The Post Pilot Platform (Year 1) activities will include uploading the petroleum-related legislation of sixteen countries, namely: Angola, Algeria, Kenya, Cote d’Ivoire, Mauritania, Senegal, Sierra Leone, Liberia, Uganda, Cameroun, Egypt, The Gambia, Rwanda, Equatorial Guinea, Tunisia, and Mozambique.

LRT selected by the APLA secretariat will populate the APLA Post Pilot Platform. The LRT will get one week of training after being selected by the APLA secretariat on the following topics (i) how to use the APLA platform; (ii) how to process and analyze petroleum laws for the purpose of filling the platform; and finally, (iii) how to upload petroleum laws, regulations and related legislation.

The APLA Platform will be launched following the successful completion of the APLA Pilot Platform. The APLA Platform will be a free online one-stop resource for African petroleum legislation that provides the public with all existing petroleum laws of the African continent in an easily readable and searchable format. The development of this platform is currently underway. The APLA Platform will host (i) all the petroleum laws, petroleum regulations and related/associated legislation of all the countries on the continent; (ii) a country-by-country specific provision comparison tool; and (iii) interconnectivity with resourcecontracts.org, an initiative that maintains a repository of petroleum contracts.

To continue developing specialized expertise on the continent, the project will continue training LRT’s made up of advanced law students selected from multiple African universities, representing all five regions of Africa (namely North Africa, West Africa, Central Africa, East Africa and Southern Africa). The role of the LRT will be to populate the APLA Platform by locating petroleum and related legislation and conducting comparative research on specific topics across different countries’ petroleum legislation, under the guidance of the quality review team comprised of senior specialists in the sector.

2.2 A Guiding Template

The APLA Guiding Template will be a petroleum law drafting and reference tool that will lead a petroleum law’s potential elements in Africa’s current realities. It will cover over 200 topics, each clearly described, followed by legislative sample provisions. Each of them will be accompanied by an annotation explaining the context, issues, and helpful features of the presented language. Most of the examples will be drawn from or inspired by current petroleum laws within Africa. Where such instances do not exist, they will be sourced from petroleum laws outside Africa or drafted de novo.

The APLA Guiding Template intends to be responsive rather than prescriptive in order to provide a tool that is sensitive to the unique character of each African nation, its actual legal framework and the particular context in which each petroleum sector is established. The tool will be developed in collaboration with a Review Committee of international organizations, law firms, and multilateral institutions.

3 Study Cases

3.1 Regional energy growth in Central Africa

Through a series of high-profile meetings with industry leaders and international oil companies, the African Energy Chamber (www.EnergyChamber.org) is driving a solid narrative on the role of regulation and a catalyzer environment in accelerating investment in Equatorial Guinea.

The CEMAC region – which comprises Chad, Cameroon, the Central African Republic, Gabon, Equatorial Guinea, and the Republic of Congo – is blessed with multiple natural resources, in which a recent oil and gas boom has the potential to stimulate economic growth while alleviating energy shortage throughout the region. Despite enclosing one of the richest areas in Africa – with actual production levels at 700,000 barrels of oil per day and 5 million tons of LNG per annum ­– the CEMAC group also remains one of the most challenging business environments in the continent, with burdensome regulations and red tape creating significant barriers to entry.

Noble Energy operates gas from the YoYo/Yolanda field, which straddles the maritime border between Equatorial Guinea and Cameroon. Noble Energy and both governments inked an agreement in mid-2017 to jointly develop the fields. YoYo’s resources are assessed to be 47 Bcfg and 18 MMbc, whereas Yolanda’s are projected to be 27 Bcfg. The delays in finalizing these agreements are not beneficial to the residents of both nations, and all players are being asked to act quickly to fast-track the process. Whilst the Etinde fields are just 35km away from Punta Europa; there are concerns about the delays in developing this project as well. Stakeholders hope to see a Final Investment Decision (FID) soon and free from regional politics.

The region has been favoured by many companies that explore energy resources like Glencore,  Exxon Mobil, Perenco, Bowleven, Lukoil, Atlas Petroleum, Tower Resources, Chevron, Vaalco, Marathon, Total Energies, BW Offshore, Royal Gate Energy ENI, Kosmos Energy, Panoro Energy, Assala Energy, etc. Local authorities have stated that the energy transition issues are real, and thus honest dialogue is welcomed to make energy poverty history.

3.2 Rules of engagement: regulatory instruments designed to promote and secure local content

In a broader sense, local content requirements are mandates imposed by the administration on investors to procure and support the growth of an industry. Ideally, the objective of local content requirements is to effectively expand local participation through creating local jobs or building local businesses. The problem with these regulations is that they are difficult to define and implement. There is currently no widely accepted meaning of the term “local,” and there is no agreement on what “content” should be incorporated in the petroleum industry.

When LC is defined, it is frequently done to represent the state’s goals (regulation) rather than local content terminology. Local content is defined as “Nigerian product” in Nigeria, for example, meaning “the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry”.

In terms of the implementation, these legislative mandates appear to place a greater emphasis on foreign investors’ responsibilities in cultivating the local supply than on the broader investor pool, which includes local investors. As an illustration, even though legal frameworks provide that these mandates apply to foreign and local investors, the general practice seen in Angola and Nigeria has leaned more to mandating foreign investors only. In Angola, the introduction of the “Decree on rules and procedures” (“Decree-Law 17/09”) to regulate the recruitment, training, integration, and development of workers from the oil sector, demanded that international oil companies need to allocate a certain specified amount of training to nationals.

Where African governments insist on fitting these mandates into petroleum regimes, then appropriate and responsive regulatory frameworks are needed to maximize integrity while simultaneously enhancing economic development. Broadly, local content objectives have been expressed in financial plans and overall or specific policy statements. However, we can also find that the main regulatory instruments used in practice are often detailed within substantive or procedural petroleum legislation, as well as in negotiated contracts (concession, licensing, production sharing).

Most of its citizens still live below the poverty line despite the preliminary and continuous legal, administrative, and fiscal changes Nigeria and Angola undertook within the last 40 years to secure an equitable sharing platform. This signifies that the modifications instituted in relation to local content developments have yet to reflect on ordinary people positively.

3.3 Governance challenges for Uganda

In Uganda, ownership of petroleum resources, together with the prerogative to licence the exploration and production of these resources, is vested in the Government. Since 2006 when the first commercial oil discovery was declared, Uganda has progressed from the exploration to the development and production phases of the petroleum value chain. The licensing regime is based on the structure of the petroleum industry, which is classified into downstream, midstream and downstream. The petroleum licensing regime provides the rights to explore, produce, establish facilities and transport petroleum resources.

There are emerging spaces of resource governance within this new petro-state. A legislation atlas like APLA could identify how modes of private and semi-private resource governance such as transparency initiatives at the national level and CSR interventions at the sub-national level are potential pathways through which resource-led development is advocated and sought. Previous studies reported four critical governance gaps: lack of coherence among CSOs, limited civil society access to communities and increasing state control, industry-driven interaction at the community level, and weak local government capacity.

Through limited civil society and donor response, increased state control and failing decentralization, there are essential information, monitoring and participation deficits emerging in this nascent petro-state, particularly at the sub-national level. For example, in 2011, both the Kampala-based policy think tank Advocates Coalition for Development and Environment (ACODE) and the peace-building NGO International Alert undertook legal reviews assessing the status of Uganda’s oil and gas legislation. The donor community was partially responsible for fuelling this disparate civil society approach because up until 2011, and there was little effort to coordinate donor-funded projects.

4 Next Steps

APLA will continue the development of a free, highly accessible, and user-friendly online smart platform with a clean and intuitive interface designed to:

• Provide immediate visually-optimized information on the petroleum sector of African countries employing interactive mapping technology and including petroleum dependency, EITI status, membership in regional blocs/economic communities, and other relevant information;
• Host content covering petroleum sector legal framework of all African countries (this content should consist of the primary petroleum law, supporting legislation and regulations) and a petroleum law guiding template;
• Include an adequate and easy to operate content management system to enhance the collaboration of universities and other research organisms across the African continent. Academic bodies should be able to contribute to the content upload and tagging of legislative materials for the guiding template and legal framework into the platform coherently and cohesively while facilitating overall platform maintenance.
• Enable features including search, provisions comparison and printing options and a feedback section that allows end-user comments; and
• Providing storage technology that allows for easy integration and maintenance in the hosting entity’s server and cloud storage capability.

The license of the hardware and the software employed for the design and development of the online platform will be granted to the APLA Secretariat. This one shall retain all ownership rights over the software, hardware, and design of the platform.

5 References

[1] https://a-pla.org/en/aboutus

[2] https://www.afdb.org/sites/default/files/2020/11/25/2020-11-18_-_alpa_virtual_launch_agenda.pdf

[3] https://www.sadc.int/

[4] Driving Regional Energy Growth in Central Africa: African Energy Week in Cape Town Emphasizes Market-Driven Policies, Local Content Development, and an Enabling Environment

[5] Asiago BC. Rules of Engagement: A Review of Regulatory Instruments Designed to Promote and Secure Local Content Requirements in the Oil and Gas Sector. Resources. 2017; 6(3):46. https://doi.org/10.3390/resources603004

[6] James Van Alstine, Jacob Manyindo, Laura Smith, Jami Dixon, Ivan Amaniga Ruhanga, Resource governance dynamics: The challenge of ‘new oil’ in Uganda, Resources Policy, Volume 40, 2014, Pages 48-58, ISSN 0301-4207, https://doi.org/10.1016/j.resourpol.2014.01.002