Mazeingo urges cheap oil for Africa

ALGIERS – African oil producers should consider creating a two-tier pricing system that would raise prices for Western customers and lower them for poor African consumers, a Namibian energy executive said on Monday.

Joe Vatanavi Mazeingo, managing director of Namibian state-owned oil company Namcor, added in a Reuters interview that African oil producers should follow the example of Hugo Chavez, President of Opec member Venezuela, who provides cheap oil to impoverished Latin American neighbours. “That is absolutely the way to go,” he said on the sidelines of an African oil and gas conference in Algeria.”Obviously it will help those poor countries, because if the price of oil is high you are damaging the whole economy.”Namibia is a net importer of energy, like many African countries, and one of Mazeingo’s jobs is obtaining supplies for the country on the world market.He said the costs amounted to a substantial amount of national wealth.Mazeingo said that with oil at US$60 a barrel, supply from Africa increasing and foreign interest in African oil rising strongly, African oil exporters should consider co-operating to manage supply to the market in ways that would benefit Africans.”When we are exporting to (a rich) country we would have a premium price, and when you are exporting to other countries maybe the price would be much less,” he said.Any such effort could only be in the long term, he conceded, but the potential benefits were real – as was the power that the possession of oil would one day give the continent.”Of course there is power – you have this commodity and it’s not replaceable in the near future so there is a power in itself and you cannot throw it away,” he said.”You can invest, build your own national oil company and it will help balance your budget.”The idea of an African Opec is not new.In the early 1990s African oil producers created APPA, the Association of petroleum Producers in Africa, but the venture fizzled, amid low prices and lack of interest.APPA’s aim was more to share technology in producing oil than influencing prices.The spirit of African oil nationalism has not died however, and several speakers at the oil conference in Algeria called on African countries to do far more to protect their energy sectors from foreign domination.Mazeingo said his envisaged organisation would “definitely” open and tighten the oil taps in order to manage prices, in ways similar to those employed by the Organisation of Petroleum Exporting Countries.But Mazeingo said that Opec was understandably dominated by Middle Eastern producers because they had struck oil far earlier than African countries and currently had a great deal more of it, so African views did not hold sway.”They (African Opec members) have to agree (with Middle Eastern members) even though they might have different considerations and a different viewpoint on things.””And we ought to have other considerations as well.Some markets might be more favoured than others, especially those suffering under poverty and underdevelopment.”Remember: Most African countries don’t even have refineries.”He said the creation of an Africans-only exporting group would encourage Africans to build their own national oil firms.- Nampa-Reuters”That is absolutely the way to go,” he said on the sidelines of an African oil and gas conference in Algeria.”Obviously it will help those poor countries, because if the price of oil is high you are damaging the whole economy.”Namibia is a net importer of energy, like many African countries, and one of Mazeingo’s jobs is obtaining supplies for the country on the world market.He said the costs amounted to a substantial amount of national wealth.Mazeingo said that with oil at US$60 a barrel, supply from Africa increasing and foreign interest in African oil rising strongly, African oil exporters should consider co-operating to manage supply to the market in ways that would benefit Africans.”When we are exporting to (a rich) country we would have a premium price, and when you are exporting to other countries maybe the price would be much less,” he said.Any such effort could only be in the long term, he conceded, but the potential benefits were real – as was the power that the possession of oil would one day give the continent.”Of course there is power – you have this commodity and it’s not replaceable in the near future so there is a power in itself and you cannot throw it away,” he said.”You can invest, build your own national oil company and it will help balance your budget.”The idea of an African Opec is not new.In the early 1990s African oil producers created APPA, the Association of petroleum Producers in Africa, but the venture fizzled, amid low prices and lack of interest.APPA’s aim was more to share technology in producing oil than influencing prices.The spirit of African oil nationalism has not died however, and several speakers at the oil conference in Algeria called on African countries to do far more to protect their energy sectors from foreign domination.Mazeingo said his envisaged organisation would “definitely” open and tighten the oil taps in order to manage prices, in ways similar to those employed by the Organisation of Petroleum Exporting Countries.But Mazeingo said that Opec was understandably dominated by Middle Eastern producers because they had struck oil far earlier than African countries and currently had a great deal more of it, so African views did not hold sway.”They (African Opec members) have to agree (with Middle Eastern members) even though they might have different considerations and a different viewpoint on things.””And we ought to have other considerations as well.Some markets might be more favoured than others, especially those suffering under poverty and underdevelopment.”Remember: Most African countries don’t even have refineries.”He said the creation of an Africans-only exporting group would encourage Africans to build their own national oil firms.- Nampa-Reuters