Ladies and Gentlemen,
Thank you for granting me this unique opportunity to share with you our vision for the development of the petroleum sector in Seychelles, within a framework for sustainable development as encapsulated in the concept of a ‘Blue Economy’.
Sustainable Development is an often misunderstood concept.
The definition envisaged from the first Rio Earth Summit was to provide a template whereby our planet, and the nations which constitute it, could rationalize their development needs with the available resources to achieve it.
It is important to therefore see sustainable development as a process- not just an objective or an end in itself.
For a country such as Seychelles- a Small Island Developing State, population 90,000, 454sq.km of land but 1.3 million sq.km of ocean- our quest for sustainable development has shown us that still too many of the thinkers around development believe that they have a catch all theory that can solve all problems- that there is a ‘one size fits all’ solution.
The first lesson of sustainable development from our perspective is that we must always seek to put our people at the centre of development. This means finding the right development fit that meets our priorities.
Seychelles has designated the largest percentage of land territory in the world to environmental protection, because through this protection, we can create more opportunities for our people, through activities such as tourism which is currently the mainstay of our economy.
And the second element of sustainable development that we have emphasized- is the importance of working with what we have.
We speak of a Blue Economy, because while we are a Small Island State, we are also a large oceanic nation.
But our oceans are too often treated as a ‘secondary space’, and not a true space around which development can be centred.
The fact that so little of our planet’s oceans are neither protected nor developed is somewhat absurd given that they make up 70 percent of the world’s surface area. Large swathes of our oceans are also regrettably plundered and polluted without regulation.
While we do not have much land, our pursuit of sustainable development means we have to weigh up all the resources available to us at sea, and take informed choices on how to develop them for the benefit of our country and our people.
Through a Blue Economy approach, we can harness new untapped resources that strengthen our sustainable development process. While also establishing best practices that reduce risks to our natural environment.
The development of our petroleum sector is very much situated within this Blue Economy approach.
Ladies and gentlemen,
The Republic of Seychelles is made up of the only ‘mid-ocean’ granitic islands in the world; remnants of the split of the super continent, Gondawana, several million years ago.
This fact was established in the mid-1960s during the first International Indian Ocean Expedition. These first expeditions and surveys helped us to understand the potential hydrocarbon deposits, while also better conceptualising our own ocean as a possible source of minerals and energy resources.
We have been happy to work with oil companies that have been very keen to explore this ‘Ocean of Potential’ and there have been several indications that large deposits of hydrocarbons exist offshore. Those countries that would have been our immediate prehistoric neighbours; Tanzania, Kenya, Madagascar and India, have all discovered oil along coasts that were once juxtaposed to Seychelles.
But why should oil companies invest in Seychelles’ petroleum sector… a sector which is in its embryonic stages, but that is nevertheless full of potential?
Ladies and gentlemen, a recent publication by the United States Geological Survey (USGS), carried out as part of their World Oil and Gas Assessment has confirmed that Seychelles has potential for large oil and gas accumulations. However, with only four wells drilled so far, Seychelles’ 1.4 million km2 of EEZ is highly under-explored, particularly in relation to the potential deposits.
Aside from the favourable geology and ingredients necessary to make Seychelles an oil province, allow me to also underline a few other critical advantages:
Firstly, we are the first country in the region to be actively engaged in ‘marine spatial planning’. With technical assistance from organizations such as the Commonwealth we are establishing the best potential areas for all aspects of the blue economy, including the petroleum sector, and as more and more date becomes available, so do the possible sites for petroleum extraction. This ‘spatial planning’ approach ensures a high level of coordination with other sectors of our economy and ensures that there is a coherent and predictable framework for potential investors.
Secondly we also already have a transparent, open and forward looking legal framework that provides strong protection for investments.
We have already put in place the required legal and fiscal frameworks to facilitate exploration and eventual production.
These frameworks have been designed so as to create an attractive investment climate for oil companies to be able to meet their commercial objectives vis-à-vis their shareholders, while at the same time creating wealth for the host country. The terms are straightforward, based on modern petroleum taxation practices, and are sufficiently flexible to cater for all likely exploration, development and production scenarios.
We aim to maintain a flexible and responsive economic and fiscal regime which will encourage the development of small and marginal oil discoveries while ensuring a fair division of returns between the risk taking investor and the Government when an especially profitable field is developed.
Petro Seychelles provides a reliable and experienced partner in terms of facilitating research and potential drilling, as well as advising on the financials.
The Seychelles government is also committed to providing as much transparency as possible also in relation to all aspects of the petroleum sector and in this context, Seychelles has already embarked on an exercise to become EITI compliant within the next two years. The ground work has begun and we are working closely with international institutions such as the World Bank to achieve this objective.
In this respect, oil companies will be expected to operate in full transparency by disclosing all payments made to the Seychelles Government.
At the same time, we are also working towards the creation of the legal framework to set-up a “Petroleum Fund” that will be pivotal in ensuring that wealth generated from this resource will benefit our people for generations to come.
Ladies and gentlemen,
Our position as a financial services hub, also means that several of the associated services required for the petroleum sector are readily available, while our experience in bunkering and re-export of petroleum products means that there is already an understanding of global markets in relation to such products.
Furthermore, Seychelles is considered to be a ‘very high’ human development country. In addition to coming 4th in the Ibrahim Index of African Governance in 2013 and 1st in the 2013 ICT Development Index for Africa, the 2013 Human Development Report ranked Seychelles first in Africa and 46th among 186 countries in the world.
As far as our infrastructure is concerned, Seychelles has one of the deepest and most versatile water ports in the Indian Ocean. Telecommunication facilities are very good and despite its remoteness, Seychelles is linked to the rest of the world by fibre optic cable and has one of the best internet speeds in Africa. We also enjoy good air connectivity.
Ladies and gentlemen,
Discovering oil is often portrayed as a double edged sword. Is it a blessing or a curse?
In Seychelles, we see the petroleum sector as part of a wider vision of development. It is part of our Blue Economy- the oceanic space which must be developed, preserved, protected and nurtured.
We cannot develop it in isolation from the other successful parts of our economy.
Environmental protection is a critical component of our development vision. And we believe that the right technologies, and the right approach, can help ensure that whatever is invested in the petroleum sector can help build a more sustainable Seychelles.
In Seychelles, we are determined, as a Small Developing Island State, to ensure that working with partners can allow us to develop this sector as part of our sustainable development process.
We look forward to working with countries from our region to share experiences and also develop shared resources and spaces.
We look forward to working with all of you, and I welcome your questions and interaction.