PRESENTATION BY GBOLAHAN ELIAS D.Phil (OXON.) SAN G. ELIAS & CO. (SOLICITORS AND ADVOCATES) AT THE AFRICA LEGAL NETWORK (ALN) CONFERENCE AND ANNUAL GATHERING 2013 ON “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” (November 22, 2013)

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” TABLE OF CONTENTS 1.Introduction 2.Actors 3.Locations 4.Commodities 5.Issues – Then and Now 6.Issues – The Future 7.Law Firm Practice 8.Apologies 9.A Comprehensive Table? 10.End 2

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 1. INTRODUCTION  The West Africa energy sector has grown rapidly over the years  The principal actors in the sector, locations, energy sources, issues and development of legal practice on it have changed significantly over the years  In this presentation we will examine the main stages in its development and what those stages have meant for the practice of lawyers 3

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 2. Actors  The initial actors were electricity producers for the mining sector  They were followed by State-owned hydro electric power entities  The larger international oil companies came later  These were followed by national oil companies such as Nigeria’s NNPC  National integrated electricity monopolies followed  Then foreign oil and gas independents came  West African independent oil and gas producers are now players  West African independent electric power companies are now also becoming significant players 4

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 3. Locations  The early centres of activity were inland coal and other mines and swamps  Then the coastal onshore areas became very active  True offshore activity began in earnest about 1990  Attempts to make progress in onshore basins have so far not been very successful 5

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 4. Commodities  The earliest work was with coal and hydro power for local electricity production  Then we began to produce oil for export  Gas for export then followed with condensates, natural gas liquids and liquefied natural gas projects  The production of gas for local consumption – petrochemicals and power - is becoming central  Work on tar sands has begun but much still needs to be done 6

G. Elias, SAN (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 5. Issues – Then and Now  The main issues in the early days were about licensing and foreign investment  Tax and the environment also later became major issues  The control of ministerial discretion and executive power has also been very significant  More recently, divestment programmes by foreign investors and programmes of preferences for local actors have become key issues 7

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 6. Issues – The Future  Pressure to privatize the NOCs and State electric power assets will intensify  Pressure to improve tax incentives will grow under the threat of competition from Portuguese-speaking, East African and Western (shale gas) competition  Pressure to reduce the role of executive discretion will grow as public sector transparency improves  Pressure to have a single regulator for both gas and power will grow  Pressure to allow cost-reflective tariffs but counter anti-competitive combinations in the electric power sector will increase 8

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 7. Law Firm Practice  As long as Governments and IOCs virtually monopolized the sector, much of the talent in the sector was outside the law firms  With greater complexity in the issues arising, the law has, and lawyers have, become more sophisticated and true expertise has developed  With greater private sector involvement and demands for public sector transparency, the demand for legal expertise has grown and so have the revenues and skills resident in law firms  The coming years are set to be very exciting, perhaps more so on electricity sector work rather than oil and gas 9

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 8. Apologies  This presentation has been Nigeria-centric (although I have tried to disguise it). It is the country that I know best, and it has a long history in the sector  The various stages described thus far overlap both within any given country and across countries  It is difficult to bring all of the various elements together in a single, simple, one-sheet presentation, but I try to do so on the next sheet. 10

G. Elias, SAN -- G. ELIAS & CO. (SOLICITORS AND ADVOCATES) “WEST AFRICA ENERGY – GROWTH, VARIETY AND EXPERTISE” 11 EraActorsLocationsCommoditiesIssuesLawyers Stage 1 Hydro power, coalRivers; mines Water; coal LicensingLittle local expertise and revenues Stage 2 +IOCs, NOCs oil independents +coastal onshore and offshore oil for exportenvironment; incentives; +discretion; state immunity +developing local expertise and revenues Stage 3 +gas independents+inland basins?+gas for export+pricing; tax; local content +more local expertise and revenues Stage 4 +electricity entrepreneurs; petrochemical entrepreneurs +inland basins?+gas for local use +tar sands? +unified gas and power regulation; free market pricing; foreign investment +true local expertise, sophistication and revenues

THANK YOU! END