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OIL & GAS: Europe should Decarbonize while Africa Industrializes

While western nations are calling for the abrupt end to fossil fuel utilization in Africa, countries such as the UK and Norway continue to hold licensing rounds intended to scale-up exploration and production. With Africa’s socioeconomic development hinging on the exploitation of the continent’s oil and gas resources, this hypocrisy could spell a travesty for Africa. As western organizations such as Greenpeace move to end African hydrocarbon investment in the name of climate change, shouldn’t European nations move to decarbonize first?

Europe is well-positioned to decarbonize its high-emitting sectors, owing to the availability of the required technologies; the regulatory frameworks in place; and the financial and economic capacity to do so. Having utilized ‘dirty’ fuels such as coal, oil, and gas for decades, the continent has been able to develop its economies substantially. According to the Eurostat, the EU operates a single market made up of 27 countries; total GDP in 2019 equated to €16.4 trillion; the EU accounted for 15% of the world’s trade in goods, and economic growth is projected to increase by 4% in 2022 and 2.8% in 2023. However, countries in the EU are also responsible for approximately 18% of global carbon dioxide emissions produced since the industrial revolution began. In the third quarter of 2021 alone, the EU’s greenhouse gas emissions t 881 otaledmillion tons of CO² equivalent. Yet, these nations continue to call for the end of African oil and gas development, despite holding licensing rounds to develop their own oil and gas.

On the contrary, despite holding some of the world’s largest oil, gas and coal reserves – estimated at 125.3 billion barrels of crude oil, 620 trillion cubic feet of gas and nearly 16.4 billion short tons of coal -, Africa’s development has been slow, largely due to natural resource exports, refined product imports, the lack of adequate infrastructure and the lack of adequate investment and reinvestment in key sectors. Representing the world’s fastest growing population; the youngest population; and holding some of the world’s fastest growing economies, Africa has the chance to accelerate development across its entire economy, driven by the exploration, production and utilization of its oil and gas reserves.

Having utilized ‘dirty’ fuels such as coal, oil and gas for decades, the continent has been able to develop its economies substantially

Oil and gas will enable Africa to improve access to energy and lift the over 600 million people across the continent out of energy poverty; significantly reduce the continent’s dependence on energy imports; and provide the much-needed revenue which African governments can utilize to fund infrastructure rollout in various sectors including energy, mining, transportation and health which are vital for economic stability.

African hydrocarbon producers should follow in the footsteps of European counterparts including Norway and Britain who have and continue to introduce new exploration licensing rounds to make it easier to drill and to expand production capacity. In January 2022, the Norwegian Ministry of Petroleum and Energy awarded 53 production licenses in mature oil and gas producing areas in a bid to remain western Europe’s largest hydrocarbon producer whilst the British government in its latest Energy Security Strategy announced that it will award licenses for the increased drilling of oil and gas in the North Sea. This is what Africa needs to do: increase its exploration licensing rounds and the use of domestic hydrocarbons resources to end energy poverty rather than leaving these resources in the ground.

Countries across the continent have already made progress in this area with the introduction of licensing rounds in 2020 and 2021. According to the African Energy Chamber’s (AEC) Q1 2022 Outlook, the results of some 14 licensing rounds are expected to be announced this year while other rounds in Ivory Coast, Senegal, Algeria, the Congo, Sudan, South Sudan, Somalia, Uganda and Kenya are expected to be introduced in 2022 and 2023. Despite this progress, more needs to be done. While the introduction of licensing rounds is critical, implementation and execution is often slow and deters investors. In this regard, Africa needs to take a lesson from Europe, fast tracking these rounds and approvals so that the development of oil and gas can be accelerated.

“For years Africa has been told to stop using its oil and gas resources, even if those very resources are the solution to making energy poverty history. Now, faced with their own energy security crisis, Europe is pushing for new oil and gas licensing rounds to increase exploration, production and oil and gas utilization. How is it that Africa must decarbonize while Europe continues to industrialize? It seems that the saying do as I say and not as I do is clear, even in the energy space. But Africa will not do as they say. We deserve to develop our oil and gas to make energy poverty history. In 2022, Africa needs to ramp up its licensing rounds, drive exploration and position itself as the primary supplier for domestic and global markets,” Leoncio Amada Nze, President of African Energy Chamber CEMAC.

African Energy Week (AEW) 2022, Africa’s premier event for the oil and gas sector, which will take place from 18 – 21 October 2022 in Cape Town, remains committed to ensuring Africa develops and benefits from its oil and gas resources. Under the theme “Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment,” and through a series of panel discussions, investor forums and networking events, AEW 2022 represents the most suitable platform for driving project partnerships and investment deals while kickstarting both Europe’s decarbonization and Africa’s industrialization in 2022 and beyond.

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Oil & Gas

List of African countries with the highest petrol prices

Across Africa, petrol prices are soaring. This problem has worsened by a number of factors, including the increasing scarcity of the commodity.

In Nigeria, petrol has been scarce for about a month now. Some experts have said, the case in Nigeria started after the country inadvertently imported adulterated fuel.

Efforts by the West African country’s state-owned energy company (the NNPC) to clean up the contaminated product from the market inevitably resulted in a shortage. Since then, it is alleged that marketers have been hoarding and profiteering.

Despite the recent price surge in Nigeria, the country is not making it to the list of African countries with the highest fuel prices in Africa, perhaps this is due to the fact that the Nigerian Government heavily subsidises the commodity.

The rising cost of petrol in Sub Saharan Africa has also been attributed to the ongoing Russian invasion of Ukraine. There are fears that as the conflict continues to escalate, it could have an even more negative impact on energy costs in Africa.

Already, global oil prices have surpassed the $100 per barrel mark, which was last recorded in 2014. The commodity is currently trading at $102.6 per barrel, according to benchmark price Brent Crude.

Below is a list showing the top10 African countries with the highest petrol prices as of March 2022, according to data made available by Global Petrol Prices.

  1. Zimbabwe: This Southern African country has the highest petrol cost in Africa. A litre of petrol costs as much as $2.153. Earlier this month, the country’s Energy and Power Development Minister, Zhemu Soda, explained that frequent petrol price hikes were driven by developments in the international oil industry. Zimbabwe is not an oil producer, although there were conflicting reports about crude oil discovery in Northern Zimbabwe in 2018.
  2. Seychelles: This island country has the second most expensive fuel price in Africa, according to data. A litre of petrol in this country is sold for $1.541. The country does not currently produce any oil and gas, although some international oil companies are busy prospecting potential oil deposits off its many coasts.
  3. Malawi: Malawi follows with $1.426 for a litre of petrol. The country is said to have a great prospect of discovering crude oil reserves in Lake Malawi.
  4. South Africa: Here, a litre of petrol costs $1.413. In 2019, Total Energies announced that it had made a major discovery of gas condensates in one of its exploration fields in South Africa. Experts said this could significantly improve the country’s fortunes.
  5. Uganda: In this country, a litre of petrol costs $1.389. The high cost of petrol in Uganda is despite the fact that the country actually produces oil. Checks by Business Insider Africa show that the country’s crude oil reserves, as of 2021, stood at 2.5 billion barrels.
  6. Mauritius: This country has the sixth most expensive petrol price in Africa at $1.381 per litre. Mauritius currently does not produce oil, although experts say there are prospects.
  7. Burundi: In this East African country, a litre of petrol costs $1.340. According to the United Nations Environmental Programme, this country currently does not have any local sources of crude oil or natural gas.
  8. Senegal: In this Francophone West African country, it costs $1.299 to buy a litre of petrol. The country discovered some crude oil deposits between 2014 and 2017, although full-scale exploration has been pushed back till 2023.
  9. Lesotho: In this country, it costs $1.231 to buy a litre of petrol. The country does not have any confirmed oil deposits.
  10. Rwanda: Here, a litre of petrol costs $1.230. This East African country does not produce crude oil.

 

*Africanews

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Oil and Gas: Nigeria Takes the Lead in Exploration, Production and Regulation in 2022

Nigeria represents one of Africa’s heavyweights when it comes to hydrocarbon exploration and production. With over 36 billion barrels of oil (bbl) and 200 trillion cubic feet of natural gas, the country has managed to position itself as both an attractive upstream market and competitive producer. In its Q1 2022 outlook, The State of African Energy, the African Energy Chamber (AEC) (EnergyChamber.org) contends that Nigeria will maintain its position as one of Africa’s leading crude oil producers as well as one of the continent’s top three gas suppliers between 2022 and 2025, providing an opportunity for the West African country to leverage its energy resources for economic growth while addressing global energy demand.

According to the outlook, Nigeria will produce 1.46 million barrels per day (BPD) of crude oil out of the 6.35 million BPD that Africa as a whole will produce during the year, reaffirming the country’s position as a continental energy hub as production in the West African state peaks in 2023. Production declines in mature oilfields coupled with the country’s reliance on offshore basins – approximately 65% of the crude oil Nigeria currently produces sourced from offshore projects – has highlighted the need for Nigeria to increase oil exploration and production to maintain a secure supply as legacy projects diminish and thereby shrink the country’s production capacity from 2023 onwards. Out of the 36 bbl of oil reserves Nigeria holds, just over 25% is currently produced from deep water projects, underlining a huge opportunity for Nigeria to expand partnerships and investment to ramp up production and increase its role in both the continental and global energy landscape.

“The recent $1.2 billion deal between Nigeria’s Seplat Energy and American energy firm ExxonMobil, in which the multinational will continue with its deep-water projects whilst handing over onshore projects, is an indication of the huge potential the country’s offshore projects have in the near future in addressing energy needs as energy consumption increases. By increasing focus on these projects, accelerating exploration and production in key basins, Nigeria has the ability to unleash its full energy potential,” stated NJ Ayuk, Executive Chairman of the AEC.

By increasing focus on these projects, accelerating exploration and production in key basins, Nigeria has the ability to unleash its full energy potential

In order to consolidate its position as a global producer, the Nigerian government needs to fast-forward the approval process for deep-water projects and put in place policies that reduce taxes for operators, the majority of which are international majors that have partnered with national oil companies, to ensure more projects come online through 2025 for a continued stable supply of crude oil.

More investments are also required within the country’s downstream sector with inadequate infrastructure slowing down oil production and increasing Nigeria’s reliance on fuel imports. Nigeria imports up to 1.25 million metric tons per month of gasoline due to inadequate domestic refining capacity. Accordingly, the $12 billion Dangote refinery project in Lagos, slated to kickstart operations during Q4 of 2022 with a processing capacity of 540,000 barrels per day and partly owned by state-company the Nigerian National Petroleum Corporation, is an example of the willingness of Nigeria to set itself as an oil heavyweight while expanding its oil and gas capabilities to meet domestic, regional and global energy needs.

Meanwhile on the gas front, the AEC outlook shows that Nigeria has also retained its spot amongst Africa’s main gas producers in 2022. An annual production capacity of 1,450 billion cubic feet is expected as the country recovers from 2020 low production levels. Existing gas producing fields, as well as those currently under development, are expected to sustain the country’s gas production through to 2025. Despite factors such as vandalism of infrastructure which are restraining optimal gas and oil exportation, as well as the high costs and emission rates associated with deep-water projects driving majors to diversify their portfolios, greenfield investments in Nigeria and its African counterparts will increase capital expenditure across the continent to $30 billion in 2022, providing an opportunity for new projects to come online and for leading hydrocarbon producers such as Nigeria to modernize and build new infrastructure as well as expand exploration and production.

Nigeria is positioned to lead African investment with proven oil and gas reserves as well as a reformed regulatory landscape making the sector increasingly attractive for foreign capital. The implementation of the Petroleum Industry Bill (PIB) in 2021 by the Nigerian government, for example, provides regulatory clarity on royalties and other issues that have previously made it difficult for oil and gas E&P companies and downstream market players to expand investments within the country’s market. Now, with the implementation of the PIB, Nigeria is better positioned, now more than ever, to attract investments and accelerate development in 2022 and beyond.

The AEC’s annual conference, African Energy Week (AEW), taking place from October 18-21, 2022, in Cape Town, will not only highlight post-PIB opportunities in Nigeria, but will make a strong case for the role the country plays in both the African and global energy landscape. Through a range of investor-specific forums, market-driven panel discussions, and ministerial summits, AEW 2022 will discuss exploration, production and regulation, with dialogue centered around how Africa’s oil and gas sector can make energy poverty history by 2030.

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Oil & Gas

ECP signs Partnership Agreement with Senegal’s Petrosen

Senegal’s national oil and gas company has signed a development and cooperation agreement with Africa’s leading investment platform for the energy sector

  • ECP is responsible for the organization of the MSGBC Oil, Gas & Power Conference & Exhibition, developed under the patronage of H.E. Macky Sall, President of the Republic of Senegal.
  • ECP will, from now on, be integrated in an event committee led by Petrosen, that will allow further collaboration in the organization of the MSGBC Oil, Gas & Power Conference & Exhibition as well as other initiatives.
  • The new agreement will see Energy Capital & Power (ECP) build a deeper relationship with the NOC, participating in a number of initiatives to promote the country’s energy sector throughout the year.

Energy Capital & Power, Africa’s leading investment platform for the energy sector and the organizers of West Africa’s largest energy event, the MSGBC Oil, Gas & Power Conference and Exhibition, has signed a partnership agreement with Senegal’s national oil company, Petrosen, that will see the two entities deepen ties as they collaborate to promote the energy sectors of the country, and the MSGBC Region as a whole.

ECP’s relationship with Petrosen has been nothing short of symbiotic, and I look forward to bringing this success to new highs in the years to come

Following the largely successful first edition of the MSGBC Oil, Gas & Power Conference and Exhibition, organized by ECP, this partnership comes as a milestone for the two entities whose vision is to promote the MSGBC Basin’s attractiveness to international investors at a time when new developments have primed the region as a world-class opportunity for production and exploration.

In the wake of the hugely successful first edition of the MSGBC Oil, Gas & Power Conference and Exhibition in December 2021, ECP has been continuously developing initiatives to promote the development of Senegal, its energy sector, and fundamentally, its people, with the company maintaining its close and fundamental partnership with H.E. President Macky Sall. The growing relationship with Petrosen is only a natural extension of those very efforts.

“We cannot overestimate the importance of this partnership for Senegal in particular and for the MSGBC region as a whole. ECP’s relationship with Petrosen has been nothing short of symbiotic, and I look forward to bringing this success to new highs in the years to come,” says International Conference Director, Sandra Jeque, ECP’s leading name in the Senegalese energy landscape

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Oil & Gas: Turning Africa’s Oil Production Decline Around – Kola Karim

Despite being blessed with abundant oil and gas resources, Africa’s production has been on the decline, representing a challenge for the continent as moves to initiate a COVID-19 economic recovery and address energy poverty. With exploration restricted due to reduced capital for fossil fuel projects and the transition away from hydrocarbons, the continent needs to act now if it is to reap the benefits of its oil and gas.

In an exclusive interview with the African Energy Chamber (AEC), Kola Karim, CEO and Managing Director of Shoreline Energy International and AEC Advisory Board Member provides more clarity on the current situation.

What will this production underperformance in Nigeria and other African countries mean for the continent as a whole?

We need to see additional financing to fix supply chains and allow manufacturing and maintenance inputs to be located nearer to production facilities on the continent

Underperformance will have a direct effect on the ability of countries to fund budgetary spending. There has been a direct linkage for many years between the oil price and the ability to many African governments to balance the books. The massive slow down with have seen due to covid and the significant economic shocks it has produced coupled with production below capacity will certainly create fiscal pressure. We have seen the oil price rise in the last few quarters to a healthy level, however without the production to take advantage of higher prices, expect to see the usual challenges in funding capital spending. Deficit spending will also therefore depend on the view of the markets on how much damage and for how long countries

What do you feel are the primary reasons influencing production decline in Africa?

I don’t think we can take a cookie cutter approach to identifying where the problems lie. For instance, our production challenges on onshore Nigeria are very different to challenges in other countries that may be more constrained by limited investment in infrastructure or more straightforward operational bottlenecks. Beyond these more systemic challenges m I think also that covid has had a significant impact which has still to be worked out of the supply chain and we will continue to see the effect of this through 2022. We would typically expect a natural 4-5% decline in production in the industry. However, Covid has seen those rates double to 10% over the last couple of years. The massive disruptions in global supply chains has also meant that equipment and maintenance activities such as part replacement has been severely disrupted across the industry leading to significant production delays and production shut ins in the worst cases.

What can be done to turn this around?

We are facing some quite significant headwinds. The Systemic and Covid related challenges I alluded to earlier are significantly complicated by the additional variable of de-carbonisation which continues to create a potential financing gap for both local producers and IOC’s looking to invest in new production. Banks are retreating from lending to Oil and Gas projects, and this creates an uphill task with regard to the key cornerstone of any turnaround which is financing. We need to see additional financing to fix supply chains and allow manufacturing and maintenance inputs to be located nearer to production facilities on the continent and we need more investment in opening up additional reserves to close the production gap as consumption returns.

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Africa

Cape Town to Host African Energy Week From 18th – 21st of October 2022

Cape Town, South Africa has once again been selected as the host of the highly anticipated African Energy Week (AEW), taking place on the 18th – 21st of October 2022 in Cape Town, South Africa. AEW 2022 will once again bring Africa’s energy leaders and global stakeholders together for a week of intense dialogue on the African energy sector.

The conference and its organizers remain fully committed to the continent, its people, and its potential, with 5000+ attendees, 175+ international speakers and 21+ Ministers from all over Africa and the world coming to Cape Town. During this year’s edition, delegates and speakers can expect a strong line-up of panel discussions, investor forums, networking functions, and deal signing ceremonies covering the entire African energy sector and value chain. Extending on narratives expressed at the 2021 edition of the conference, AEW 2022 remains wholly focused on making energy poverty history by 2030. With over 600 million people still without access to electricity, the continent requires immediate action if it is to realize its socioeconomic development objectives.

In pursuit of an electrified economy, AEW 2022 will introduce critical topics that cover the entire energy value chain. Regarding the upstream sector, there will be a focus on exploration, licensing rounds, and remaining competition for investment in 2022 and beyond. With emerging frontier markets such as Somalia, Kenya, Namibia, Uganda and Côte d’Ivoire gaining increased attention from regional and international players, AEW 2022 will emphasize the potential and current opportunities across Africa’s emerging and mature upstream markets. On the midstream front, AEW 2022 will offer critical insight into new and existing projects – such as the $6 billion African Renaissance Pipeline Project and the proposed 1,800km Tanzania-Uganda Natural Gas Pipeline Project – introducing lucrative opportunities to investors. Finally, with the scaling up of refinery construction underway across the continent, the conference is committed to increasing investment and enhancing production across key African markets. By discussing the challenges and opportunities present across the downstream sector, African stakeholders will collaboratively discuss the future of the African energy industry.

“In 2021, they said it could not be done in Cape Town and we all must go to Dubai. With massive support from the City of Cape Town, the government of South Africa IOC’s and NOC’s and alternative energy companies, we demonstrated that Africa is ready and capable to hold a continent-wide energy event in Africa and we held the largest event on the continent. Even in the midst of the pandemic, AEW took place, ushering in a new era of safe, accessible, and industry-focused events. This year will be huge for the African energy industry. We expect a range of investments to be made and developments to take off that will drive the continent’s economic advancement,” stated NJ Ayuk, Executive Chairman of the AEC.

During this year’s edition of AEW, an emphasis will be placed on finance, natural gas, electrification, hydrogen, upstream and a just transition

“During this year’s edition of AEW, an emphasis will be placed on finance, natural gas, electrification, hydrogen, upstream and a just transition as we believe these sectors have a specific role to play in Africa. By developing our gas resources, Africa can meet the growing demand for energy while reducing emissions. From AEW 2022, we will be going to COP27 to meet with global leaders and discuss African energy – from Cape to Cairo,” Ayuk notes.

Meanwhile, with energy representing a catalyst for sustainable economic progress, AEW 2022 aims to drive the continent into a new era of enhanced industry growth by providing the best platform for deals to be signed and relationships formed that will improve investment and development. As the continent continues to deal with reduced funding for hydrocarbon projects, AEW 2022 will offer new insights into how Africa’s oil and gas projects can raise capital in a post-COVID-19, energy transition context. Accordingly, panel discussions and investor forums will place a focus on finance, enabling environments, and the role that African Energy Banks will play in financing the future of the industry. By introducing African stakeholders to innovative capital raising, AEW 2022 is committed to the growth of African oil and gas.

Regarding gas, Africa is not only rich with resources but opportunities. Markets such as Nigeria, Mozambique, Mauritania, Senegal, Tanzania, Equatorial Guinea, the Republic of the Congo, and Ghana have significant untapped resources. Already, there has been an influx in investment and development within the gas sector, and yet a range of opportunities remain, particularly within the gas-to-power and Liquefied Natural Gas space. AEW 2022, therefore, has placed a strong emphasis on the role that gas will play in electrifying Africa, driving socio-economic growth and industrialization for years to come. By introducing project profiles, highlighting key discoveries, and emphasizing how gas will drive a just transition in Africa, AEW 2022 has placed gas at the center of its program agenda.

What’s more, the recent move by the European Union to label certain gas projects as green is likely to usher in a new wave of investment in Africa and AEW 2022 will be the place where deals in this area will be made. Africa is in the midst of an energy transition whereby significant levels of investment are required if the continent is to realize its environmental targets. The development of resources such as gas, hydrogen and renewables will ensure Africa adheres to global climate mitigation targets while at the same time driving economic growth.

With a focus on green energy, AEW 2022 will hold the transformative African Green Energy Summit – a platform for an inclusive discussion on Africa’s green energy sector. During the Summit, speakers will highlight key opportunities across Africa’s renewable energy space, providing insight into potential markets such as the Congo, Mozambique, the Gambia, Kenya, Angola, and Libya, all rich with renewable resources. Additionally, the Summit will emphasize the role that hydrogen will play in Africa by detailing high potential markets and projects such as Hive Hydrogen’s green ammonia plant in South Africa and the $9.4 billion green hydrogen project in Namibia.

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Oil & Gas

We Need to Talk About Africa’s Energy Crisis: Why is Production Waning? Its Exploration By Bigstock

The final frontier for oil and gas exploration, a range of untapped resources awaiting exploitation, and opportunities across the entire energy value chain all represent key components of Africa’s hydrocarbon market. For years, resource rich nations have been capitalizing on their resources, driving exploration and production alongside global players. Now, producing markets across the continent have started to dramatically underperform, with countries such as Nigeria missing production targets by a large margin. What will these production declines mean for the African continent and what can be done to mitigate this trend?

Even at the start of 2022, producing nations in Africa continue to grapple with the effects of the COVID-19 pandemic. Demand fluctuations, price instability, and the global reduction in fossil fuel directed capital expenditure have left many oil-reliant nations scrambling. While attempts to diversify economies have been noted – specifically through developments in natural gas, renewables, and associated sub-sectors such as transportation and logistics – in the short- to medium-term, oil continues to be a critical asset for many African countries.

Africa’s oil and gas resources are a blessing for the continent’s socio-economic development, and yet production figures towards the end of 2021 represent a growing challenge. Nigeria, for example, with over 36 billion barrels of oil in place has the potential to produce upwards of 2 million barrels per day (bpd). Yet, during December 2021, the country was only producing 1.1 million bpd – resulting in an estimated 2.4-million-barrel loss for the month. Similarly, despite production targets of 1.8 million bpd by 2022, during December 2021 Libya also underperformed, producing on average 1.06 million bpd. However, this was largely attributed to blockades at key oilfields due to political conflict, and the country’s production is starting to increase again.

The impacts of underperformance on African economies will be significant. Notably, with Africa contending with its own energy crisis – whereby over 600 million people are still without access to electricity – a production downturn could further accentuate the crisis. As Dean Foreman, Chief Economist at the American Petroleum Institute describes, “African crude oil and natural gas production adds value to the economy and is an engine for employment, investment, economic growth and innovation.  When this production underperforms, as it has recently, producing nations across the continent lose these benefits, and their global oil market position weakens. Moreover, nations that import refined petroleum products could end up with greater dependence and higher prices to attract products from global markets.”

On the other hand, underperformance in Africa could impact production quotes. Energy Board Executive, Abdur Rasheed Omidiya, extends on this notion, stating that, “Continuous inability to meet OPEC production quota means OPEC may at some point review down the African countries quota and source increase in other member countries which will directly impact the economy as crude oil sales made up to one-third of some government budget revenue and 90% of export earnings.”

These production trends, if continued, will have significant impacts on refineries, as well as domestic energy supply, in Africa. Omidiya describes the current situation as a “double-edged sword, as the shortfalls may impact crude supply with the current increase in demand pushing the crude price higher. This is good and bad news for a country like Nigeria, which should ordinarily earn more foreign exchange from the sale of crude, but now has to deal with paying more subsidy since there’s a positive relationship between the international prices of the commodity and how much Nigerians get the product at the pump.”

One of the primary reasons contributing to continent-wide production declines is the lack of adequate investment across the upstream market. COVID-19 coupled with the global push for an energy transition has led to many international investors pulling out of hydrocarbon projects, diverting capital to green energy. However valuable for the renewables market, this move has proved disastrous for African oil and gas dependent nations.

Demand fluctuations, price instability, and the global reduction in fossil fuel directed capital expenditure have left many oil-reliant nations scrambling

Sebastian Wagner, Managing Director of DMWA Resources, credits the production decline to a combination of factors, stating that, “The year 2021 brought along multiple divestments in the African upstream sector, which have since impacted production. In addition, the impacts of the pandemic are still being felt as the multiple shutdowns caused snags with restarting oil wells. A disturbing trend has emerged over the years. There has been a decrease in investments in the exploration and development of oil and gas, thus impacting infrastructure and hampering oil and gas production.”

So, what needs to be done to mitigate this trend? Wagner notes that, “In anticipation to becoming a principal supplier and reviving crude oil output, African governments and policymakers can counter the pressure by attracting more investments into the upstream sector.” Accordingly, the solution lies in the upstream market. Recent developments worldwide have not only emphasized the need to scale-up capital expenditure in African exploration, but have reaffirmed the role oil and gas continues to play in the global energy space. Europe’s energy crisis, for example, and the European Union’s decision to label gas as green could represent both a challenge and opportunity for African markets. While the new label could usher in a new wave of investment in Africa, trickle-down effects from Europe’s crisis poses a new challenge.

Foreman explains by stating that, “The short-term spillover effect of Europe’s energy crisis has been to raise natural gas and other energy commodity prices, and short of government intervention in markets that could have a cooling effect on prospective investments the current cycle likely needs to work itself out.  Longer-term planning across the African continent could have beneficial effects, both to develop greater resources for African consumption and exports but also potentially to position some producers as pivotal future suppliers to Europe.  Europe’s energy crisis could motivate parties to develop African resources, elevating their market position as a counterbalance to supplies from Russia and global liquefied natural gas (LNG) that could be relatively more expensive to develop and transport.”

In the meantime, the need for accelerated investment in Africa has never been more prominent. “The struggle to increase production is due to years of underinvestment in the upstream oil and gas sector with ageing infrastructure magnified by the recent pandemic and call for no new investment in fossil fuels. The government and oil and gas operators need to find a new way of stimulating investors’ confidence and appetite with 3C’s: Certainty and Consistency in policies and regulatory law and Competitive in business friendliness,” states Omidiya.

The polarizing and misleading campaigns by powerful western groups like Greenpeace against Shell’s 3D seismic survey off the Wild Coast South Africa is wrong. The science does not back their misleading claims and blocking Shell hurts South Africa and many poor people. Exploring for energy oil and gas reserves in South Africa does not hurt the country. South Africa is a net importer of oil and gas and depends on foreign countries. Its energy security, development and beating energy should be prioritized. When a responsible and leading explorer is being demonized, it sends the wrong message to investors, creates a volatile market and hurts everyone. Namibia has showed amazing maturity when it comes to Shell’s work in the country and should be commended. We are confident that Shell’s exploration well in the Orange Basin offshore Namibia will be successful. The Graff-1 well is located in Block 2913A in the Orange Basin where Shell is the operator and its partners are QatarEnergy and the national oil company of Namibia, Namcor.

Accordingly, as a whole, Africa needs to ensure both an enabling and attractive environment for investment. There is no need to wait until African Energy Week in October in Cape Town to find solutions. Despite the progress made to date in this area, more can be done to entice global players and international investors into Africa’s market. In line with this, the African Energy Chamber (AEC) – a leading voice for energy in Africa – firmly believes in the role and value that oil and gas play in Africa’s economies. A lot of changes are necessary to give oil and gas companies the incentive to explore in Africa during the current downturn. But we can’t stop there. We need to consider other pain points that discourage foreign operations in Africa and find ways to eliminate those challenges as well. So why not remove this hurdle? Negotiating with trusted explorers would help them avoid unnecessary delays and bureaucratic red tape. Making these changes would still allow them to emphasize their own priorities, and it might also make IOCs more likely to keep exploring within their borders.

“Exploration, Exploration and Exploration. You can’t produce oil and natural gas if you don’t explore. You can’t let radicals stop exploration campaigns and you can’t let bureaucrats kick out companies with poor regulations like the CEMAC forex rules.  Let’s face it, look at Algeria, where oil and gas production rates were already declining in 2019, before the pandemic, largely because of repeated project delays caused by, among other challenges, slow government approval. During four licensing rounds, Algeria saw minimal interest from investors” Stated NJ Ayuk, Executive Chairman of the African Energy Chamber.

“Nigeria, too, is known for the less than speedy pace at which it sanctions exploration projects. Even before COVID-19, its slow movement on this front contributed to a decline in oil production over a 10-year period” Concluded Ayuk.

As the year begins and new opportunities across the continent emerge, the AEC remains committed to helping African producing states accelerate project activities, improve production, and usher in a new era of socio-economic growth and well-being.

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Oil & Gas

West Africa’s Premier Energy Event Returns for its Second Edition on the 1-2 September 2022

Under the patronage of H.E. Macky Sall, President of the Republic of Senegal, MSGBC Oil, Gas & Power will once again take place in Dakar, Senegal, with the event serving as a catalyst for investment and multi-sector development in 2022; Representing the region’s official energy event, the conference is proud to host Ministries and high-level officials from across the region; MSGBC Oil, Gas & Power 2022 will be developed in partnership with Senegal’s national oil company Petrosen, the Business Council of Renewable Energies of Senegal, and COS-Petrogaz, ushering in a new era of growth for the region.

Energy Capital & Power (ECP), in partnership with Petrosen, the Business Council of Renewable Energies of Senegal, and COS-Petrogaz, is proud to announce the return of the esteemed MSGBC Oil, Gas & Power conference and exhibition. Taking place on the 1st-2nd of September 2022 in Dakar, the second edition of the region’s premier energy event represents the best platform for the exchange of topical information on the energy sector and current marketplace.

Speaking to the caliber of the event, the support and participation of regional ministers has positioned the conference as the most suitable platform for energy stakeholders to engage and sign deals, a trend that will only continue in 2022. In addition to high-level executives, the 2022 agenda and topic program will be relevant to all stakeholders across the value chain.

Delegates can expect a range of technical and strategic sessions, lunch conversations, investor match making functions, as well as live on-stage interviews with energy professionals. Touching on topics ranging from energy sector financing; regional cooperation in energy development and promoting cross-border synergies; MSGBC energy industry youth; women in energy; and the latest developments in exploration and new licensing round opportunities, to name a few, the conference will focus on ensuring that natural resource development continues to translate into long-term economic and sustainable regional growth.

The MSGBC region is unique in that it boasts significant resources across multiple sectors. On the oil and gas front, the region is considered to be in the early stages of a hydrocarbon boom, having hosted a succession of world-class discoveries such as the cross-border GTA field and the Sangomar oil field. Notable discoveries include the BP-operated Yakaar-Teranga and BirAllah discoveries offshore Senegal and Mauritania, which have been appraised to contain up to a combined 85 trillion cubic feet of natural gas. Additionally, the Bambo-1 well offshore The Gambia, operated by oil and gas exploration company FAR, is expected to contain a prospect of 1.1 billion barrels of oil while in Guinea-Bissau, the Sinapa oil discovery, also operated by FAR, features contingent resources of an estimated 72 million barrels of recoverable light oil. While independent explorers have been highly successful in revealing the potential of the basin, regional leaders remain focused on ensuring world-class discoveries translate into sustainable developments.

Speaking during the 2021 edition of the event, H.E. President Macky Sall stated that “A few days after the end of COP26, I must also draw the attention to the decision taken by certain countries to stop foreign financing to fossil fuels, including the gas sector, even as the use of other more polluting energy sources continues. At a time when several African countries are preparing to exploit their significant gas resources, the end of funding for the gas sector, under the pretext that gas is a fossil energy, would bear fatal cost to our emerging economies.”

Natural gas has a key role to play in the energy transition as well as in the power generation ambitions of our country, particularly within our gas-to-power strategy

Identified regional prospects have the potential to transform both the region and the continent at large, ushering in a new wave of development and accelerated socioeconomic growth. Covering an area of 600,000km2, extending from the Cap Blanc Fracture Zone, offshore northern Mauritania, to the Guinea Fracture Zone, situated off the coast of Sierra Leone, these discoveries have resulted in the region becoming a hotspot for development, placing it near the top of the list as one of Africa’s most exciting opportunities for exploration and development.

“The central part of our efforts in Sangomar is structured around our great drilling campaign. The Ocean black rhino FPSO, operated by Diamond Offshore, is drilling away as we speak on what is one of the largest drilling campaigns in the world today,” stated Andy Demetriou, Managing Director for Woodside Senegal.

“Natural gas has a key role to play in the energy transition as well as in the power generation ambitions of our country, particularly within our gas-to-power strategy,” Massaer Cisse, BP’s VP and Head of Country for Senegal, said.

In addition to oil and gas, the region is considered to be one of the richest regarding renewables resources and human capital, while offering lucrative associated sector opportunities such as forestry, agriculture, and mining. Large-scale projects such as the 450MW Souapiti hydropower station in Guinea Conakry and the 158MW Taiba N’diaye Wind Farm in Senegal emphasize the renewable potential of the region, and while stakeholders move to diversify the energy mix and enhance green investment, MSGBC Oil, Gas & Power 2022 will serve to enhance this trend.

By utilizing its significant natural and human capital resources, the MSGBC region is poised to drive itself towards a new era of energy sector growth while striving towards a fair and just energy transition. Following the 2021 edition of the conference and exhibition – which endeavored to increase investment across the entire energy value chain and in sectors ranging from hydrocarbons, renewables, infrastructure, and power generation – MSGBC Oil, Gas & Power 2022 will present regional ministers, high-level delegates, and top-tier energy business leaders with the opportunity to sign deals for regional development within the basin. Covering the upstream, midstream, and downstream sectors, the event aims to empower capacity building and motivate a transfer of skills and technology to the region.

“While we have to be able to adapt and reduce greenhouse gas emissions, the climate injustice that we are facing today makes us believe that we must do our level best to turn towards social justice, otherwise, we will run the risk of destabilizing the world,” stated H.E. Aïssatou Sophie Gladima, Minister of Petroleum and Energies for Senegal, concluding that, “The world needs to work hand-in-hand to grow, develop, and to be stable.”

Overall, the summit serves as the only event dedicated to energy development in Mauritania, Senegal, The Gambia, Guinea-Bissau, and Guinea-Conakry, demonstrating ECP’s long-standing commitment towards attracting investment in one of Africa’s most exciting regions. Built against a backdrop of sizeable oil and gas discoveries and associated large-scale multi-sector project developments, MSGBC Oil, Gas & Power 2022, under the auspices of the Government of Senegal, will return to Dakar in September 2022 to further enhance investment in the basin while emphasizing the region’s success regarding cross-border cooperation and integration.

During the 2022 edition, speakers and delegates will gain knowledge, exchange ideas, develop strategies, and benefit from critical insight offered by industry peers on topical issues surrounding the energy sector. MSGBC Oil, Gas & Power 2022 appeals to a diverse audience and will be instrumental in the region’s energy and economic future.

“MSGBC Oil, Gas & Power is the sole energy conference dedicated to the entire MSGBC region. During the 2022 edition, delegates can expect a strong line-up of industry-focused panel discussions, innovative networking experiences, technical and strategic sessions, as well as investor-matching functions that all serve to position the region as a globally competitive energy market. Backed by sizeable oil, gas and renewables reserves, modernized legislature, and strong regional relationships, the region is set to experience unprecedented energy and economic growth, with MSGBC Oil, Gas & Power 2022 further enhancing this trend. By attending and participating in the conference, energy stakeholders from all over the world can be a part of the region’s energy revolution,” states Kelly-Ann Mealia, ECP chairperson.

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Oil & Gas

Republic of Congo to Host First-Ever International Energy Summit in Brazzaville

Taking place on June 15, 16 and 17, The Congo International Energy Summit and Exhibition 2022 – organized by Energy Capital & Power under the patronage of H.E. Denis Sassou Nguesso and the Ministry of Hydrocarbons – will represent the first international energy event of its kind held in Congo-Brazzaville; Sub-Saharan Africa’s third-largest producer is seeking to reassert its oil, gas, and power industries through an influx of foreign direct investment and heightened regional energy diplomacy; As global investors turn an eye to green energy investments, the African continent is undertaking an ambitious drive to harness and monetize its vast natural gas reserves, with gas-rich countries like the Republic of the Congo set to become a major regional gas player and exporter.

Energy Capital & Power (ECP) is excited to announce the launch of the first-ever Congo International Energy Summit and Exhibition taking place in the Republic of the Congo on June 15, 16, and 17 2022, which is set to position the country as a key driver of the Central and West African energy narrative. The summit will introduce investors to the post-COVID-19 energy transition landscape of one of Africa’s most mature markets while opening up broader discussions on the role of regional and international players in facilitating investment and maximizing African gas plays.

The event will showcase partnership and investment opportunities in hydrocarbon exploration, gas monetization, green energy, and downstream industries across the continent, with a focus on the Republic of the Congo as a key energy investment destination across oil, gas and power sectors.

Representing Africa’s third largest oil producer – with reserves estimated at 2.9 billion barrels and output at 336,000 barrels per day (bpd) – the Republic of the Congo boasts the active participation of some of the world’s top oil and gas companies. Notable operators in the country include Total Energies E&P, recognized as the largest producer in the country with an estimated 200,000 bpd output. With participating interests in four offshore fields – including Moho-Bilondo; Nkossa/Nsoko; Sendji; and Yanga – the company is a key contributor to the country’s hydrocarbon success. Additionally, Italian multinational player Eni has been active in the country since 1968 in the exploration and production, refining, marketing and chemicals sectors. The company produces in over ten oilfields including Nené Marine and Litchendjili – 140,000 bpd -, Ikalou, Awa Paloukou, M’Boundi, and Kouakouala, to name a few. Meanwhile, Perenco, one of the newest operators to enter the market, operates the Yombo, Masseko, Likoula, Emeraude and PGNF South fields, producing on average 75,000 bpd. Additional international oil companies driving the Congo’s energy expansion include Chevron Overseas Congo Ltd – with operating interests in the Lianzi Unitization Zone and the offshore fields of Nkossa, Nsoo and Moho-Bilondo, producing an average 49,000 bpd.

The Republic of the Congo and the President have championed the energy sector for years and we are honored to work with this country

The Congolese government has implemented several key reforms aimed at attracting upstream investment and cementing its status as sub-Saharan Africa’s third-largest oil producer. National oil company SNPC has been at the forefront of establishing new regulatory frameworks that mitigate organizational and performance inadequacies –investing heavily in infrastructure projects that enhance E&P capabilities. Leading upstream activities in the Kundji and Tilapia fields, SNPC drilled five appraisal wells in 2021, with a view to increasing output by 30,000 bpd. Meanwhile, Italian multinational Eni will bring 12 new wells online in 2022 in Phase 2A of its offshore Nené field development – increasing production by 26,000 bpd – while also carrying out exploration activities involving the construction of an additional platform and drilling of seven new wells.

“The Republic of the Congo and the President have championed the energy sector for years and we are honored to work with this country and all stakeholders to drive investments into Congo’s energy sector,” stated Kelly-Ann Mealia, Chairperson, ECP. “This investment and dealmaking push comes at a critical time in the country’s energy sector development. The event is the official platform to communicate the direction in which the country and its leading companies are headed ­– in particular, attracting investment to continue exploration and increased production of hydrocarbons, advance domestic and regional gas monetization and facilitate a continent-wide energy transition,” Concluded Mealia.

In addition to upstream exploration, the African continent is undertaking an ambitious drive to monetize its vast natural gas resources, meeting domestic supply of gas to power to fulfill Africa’s electrification objectives while meeting global decarbonization demands. Harnessing Africa’s natural gas and meeting the domestic supply of gas-to-power to is important to support industrialization throughout the continent. Last November, the Republic of the Congo launched its Integrated Natural Gas Master Plan (GMP) at African Energy Week 2021 in Cape Town, establishing a framework to incentivize and promote the exploitation and development of the country’s 284 billion cubic feet of gas reserves. The Congo has the potential to become a major regional gas player and exporter, obtaining energy independence and security while exporting to gas-hungry regions like Europe. Moreover, the EU’s latest decision to label designated natural gas projects as ‘green’ marks a critical turning point for African gas development, with gas-rich countries like the Republic of the Congo better positioned to attract project financing while fostering an African green dialogue.

The Republic of the Congo also serves as a leader in regional energy diplomacy, having joined the Organization of Petroleum Exporting Countries (OPEC) in 2018 and serving as the headquarters of the African Petroleum Producers Organization (APPO). Last September, OPEC Secretary General Mohammad Barkindo applauded the Congo’s renewed efforts to promote its energy industry during an official visit to Congo-Brazzaville and reaffirmed his endorsement of H.E. Bruno Jean-Richard Itoua, Minister of Hydrocarbons as President of OPEC for 2022. The OPEC delegation helped solidify the country’s position among established and leading oil-producing partners. In the wake of oil price volatility, OPEC-led coordination and unity among petroleum producers have proven critical, particularly for African producers that depend on crude oil exports for the lion’s share of their GDP and foreign exchange earnings.

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Oil & Gas

Buhari Appoints Okadigbo, Kyari, Others as Board and Management of NNPC Limited

President Muhammadu Buhari has appointed the Board and Management of the Nigerian National Petroleum Company Limited, in accordance with the power vested in him under Section 59(2) of the Petroleum Industry Act 2021.

Chairman of the Board is Senator Margret Chuba Okadigbo (South East), Mele Kolo Kyari, Chief Executive Officer, and Umar I. Ajiya, Chief Financial Officer.

Other Board Members are; Dr Tajudeen Umar (North East), Mrs Lami O. Ahmed (North Central), Mallam Mohammed Lawal (North West), Engr. Henry Obih (South East), Barrister Constance Harry Marshal (South South), and Chief Pius Akinyelure(South West).

The appointments take effect from the date of the incorporation of the NNPC Limited.

The appointments take effect from the date of the incorporation of the NNPC Limited

Also appointed are Executive Commissioners of the Nigerian Upstream Petroleum Regulatory Commission. They are: Dr Nuhu Habib (Kano), Executive Commissioner, Development and Production, Dr Kelechi Onyekachi Ofoegbu (Imo), Executive Commissioner, Economic Regulations and Strategic Planning, Capt. Tonlagha Roland John (Delta), Executive Commissioner, Health, Safety, Environment and Community, and Jide Adeola (Kogi), Executive Commissioner, Corporate Services and Administration.

Earlier appointed are the Board Chairman, CEO, Executive Commissioner, Exploration and Acreage Management, and Executive Commissioner, Finance and Accounts.

New appointees at the Nigerian Midstream and Downstream Petroleum Regulatory Authority are Francis Alabo Ogaree (Rivers), Executive Director, Hydrocarbon Processing, Mustapha Lamorde (Adamawa), Executive Director, Health, Safety, Environment and Community, Mansur Kuliya (Kano), Executive Director, Midstream and Downstream Gas Infrastructure Fund, Bashir Sadiq (Sokoto), Executive Director, Corporate Services and Administration, and Dr Zainab Gobir (Kwara), Executive Director, Economic Regulations and Strategic Planning.

They join the Board Chairman, Executive Director, Downstream Systems, Storage and Retailing Infrastructure, the CEO, and Executive Director, Finance and Accounts, who had earlier been appointed.

For Midstream and Downstream Infrastructure Fund, new Council Members are; Mr Effiong Abia (Akwa Ibom), Bobboi Ahmed (Adamawa), and Engr. Abdullahi Bukar (Katsina).

It will be recalled that President Buhari had last September written the Senate on the administrative structure amendments to the Petroleum Industry Act, which included appointment of Non-Executive Board Members, removal of the Ministries of Petroleum and Finance from the Board of the two new institutions, and appointment of Executive Directors.

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