BRULPADDA A NEW ERA
FOR SA
French multinational Total’s gas condensate discovery in the
Outeniqua Basin, 1 785km off the southern coast of South Africa
could be a potential game changer for the country. The company’s
exploration well encountered 57m of net gas condensate in Lower
Cretaceous reservoirs.
Kieran McNamara, an analyst at IEA, noted that these will have
“profound effects on Africa’s energy mix and how the economy
develops.”
According to Tae-Yoon Kim, an analyst at IEA, Africa needs to
radically increase its investment in power generation from the
current USD30-billion to USD120-billion by 2040, if it is to achieve
universal access to electricity.
If countries on the continent do not change current policies on
energy use, Africa will not achieve the African Development Bank’s
target of universal electricity by 2030. But with improved policies,
Africa can see the continental economy expand four times with
matching energy demand that is only 50 percent greater than the
current demand.
OPTIMISM ABOUT AFRICAN
OIL AND GAS
Discussions about African gas and oil at last year’s African Oil Week held in
Cape Town.
Speaking at Africa Oil Week last year, Dr Enzo Insalaco, vice
president Exploration Africa at Total said that South Africa has
become an interesting area for exploration. “There are a number of
significant, relatively underexplored basins and a lot of scope for
exploration and significant potential,” said Insalaco.
ENERGY DEMAND CAN
EXPAND AFRICAN ECONOMY
According to PWC’s annual Africa oil and gas review 2019 new oil
and gas finds off the coast of Africa have led to an increase in
investment in infrastructure, technological advances, updates in
regulation and improved governance, as well as the development
of new skills.
Andries Rossouw, PwC Africa Energy Utilities and Resources
leader, says that renewed optimism has returned to Africa’s oil
and gas industry on the back of a rebound in prices and increased
investor interest. “The African oil and gas industry have been
through some difficult and challenging years in the wake of the
oil price crash. However, the industry has restructured itself and is
more competitively placed in terms of efficiency and operational
performance. The outlook for the industry continues to improve
with oil & gas companies targeting cautious growth in areas less
vulnerable to external volatility while maintaining their cost and
operational margins,” he says.
According to the African Energy Outlook 2019 report, compiled
by the International Energy Agency (IEA), Africa has the potential
to expand the continental economy fourfold, if energy demand
increases by only 50%. The IEA released its report on the first day
of the second African Investment Forum in Johannesburg, South
Africa, in November last year. The report states that one of the most dramatic finds in Africa over
the past decade is Mozambique’s natural gas estimated at over 180
trillion cubic feet (tcf ), which has already unlocked the first three
large-scale LNG projects. These projects, together with project
expansion phases and additional exploration have the potential to
position Mozambique as the third largest LNG producer in the world
after Qatar and Australia by 2030.
The report found that the continent’s future energy prospects look
bright if African governments are able to make the shift to more
renewable energy sources. The report says there are three factors
that will determine the continent’s future energy consumption
– its growing population, the rapid increase in urbanisation and
industrialisation. Nearly 91% of African gas production continues to come from
Algeria, Angola, Egypt, Libya and Nigeria, and saw an overall
increase of 4.8% from last year. An interest in Africa’s gas reserves
has also led to a series of successful LNG projects resulting in
a liquefaction capacity of 18% of the total global capacity. In
both 2017 and 2018 the only top-10 major discoveries on the
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