THE RISE OF OIL AND GAS IN
AFRICA
Africa holds around 7% of the world’s proven crude oil and
natural gas reserves, yet the continent remains largely under-
explored. It’s safe to say that the motherland is far from having
exploited its full potential. For this potential to bear fruit and
translate into economic development and jobs, several things
need to happen. Good thing is, they are slowing taking shape.
There are seven trends that will shape sub-Saharan Africa’s oil
and gas in 2020 and beyond:
1. The rise of the African content
An emergence of strong African Oil Companies (AOCs) across
the value chain, from field operators to services providers, is a
key emerging trend for the sector. Many companies from West
Africa particularly are seeking regional expansion across the
continent and driving the regionalisation of the African content.
As most countries strengthen their local content regulations, the
trend is likely to accelerate.
2. Regional and international cooperation is becoming key
We will know in 2020 whether African nations have learned how
to cooperate on transnational energy deals and infrastructure
for the benefit of all participants involved. This year could see
the unlocking of multi-billion-dollar opportunities through
transnational energy cooperation and projects. This applies to
planned and stalled pipeline projects in need of revival such
as the East African Crude Oil Pipeline for instance, but also to
upstream investments and developments, especially in the Gulf
of Guinea. Similarly, the way AfTCA impacts intra-African trade
could be a boost to Africa’s energy sector if properly utilised.
On the international stage and under the leadership of Secretary
General Mohammad Sanusi Barkindo, OPEC has welcomed more
African producers – Equatorial Guinea (2017) and the Republic
of Congo (2018) being the latest ones. As the organisation
further expands the OPEC/Non-OPEC outreach across Africa
to find consensual solutions to market stability while offering
technical assistance to upcoming producers, 2020 might be the
year a new addition of an African oil producing country as OPEC
member.
3. Expansion of Africa’s midstream and downstream
infrastructure
New refinery and petrochemical complexes are being
constructed. The continent is likely to see the emergence of
regional hubs and markets with the strategic ambition of
procuring petroleum products and natural gas. Examples
include Equatorial Guinea’s LNG2Africa initiative and the
Akinokien import and regasification terminal, the Dangote
Refinery in Nigeria, Ghana’s Tema LNG terminal project.
Market access is also increasing on the back of several pipeline
projects such as the Lokichar-Lamu Crude Oil Pipeline in
Kenya, and the intensifying talks over the 5 660km pipeline
that could supply gas to as many as 15 West African countries
between Nigeria and Morocco. The State of Niger also signed
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African Mining March 2020
For example, it is encouraging to see African oil and gas
companies becoming more and more a part of the continent’s
economic empowerment story. In this context, 2020 is likely
to see a continuation in the rise of the African private sector’s
contribution to supporting industry growth and jobs creation.
NJ Ayuk is the founder and CEO of Centurion Law Group, a pan-African
law firm with a focus on oil and gas. He is the current chairman of the
African Energy Chamber and best-selling author of two books Big
Barrels: African Oil and Gas and the Quest for Prosperity’ (2017) and Billions
At play: The Future of African Energy and Doing Deals (2019).
the Transport Convention on the construction and exploitation
of the Niger-Benin Export Pipeline, key to Niger significantly
increasing its crude oil production over the next five years to
as high as 100 000 barrels per day (bpd). In East Africa finally,
Ethiopia and Djibouti have reached an agreement on a gas
pipeline that will offer an exit route for Ethiopia’s gas fields and
help unlock tremendous value in gas export potential.
4. Africa is transitioning to gas
There is a promising outlook for the African gas sector. Countries
without substantial gas resources will be turning to LNG imports to
power their homes and industries. Ghana, for example, is installing
a new floating regasification unit in 2020. Ivory Coast, Morocco
and South Africa have also looked at installing these units soon.
The urgent need for rapid industrialisation will create tremendous
opportunities for gas to fuel African economies in a more cost-
effective and environmentally sustainable manner. The race is on.
At the end of the Gas Exporting Countries Forum’s 2019 Summit,
Equatorial Guinea launched the Declaration of Malabo – a
document affirming the importance of retaining rights of
member countries for natural gas resources – which will lead to
the securing the energy transition Africa needs and to meeting
sustainable development goals and attracting investment into
gas infrastructure projects.
5. Expect vigorous technology adoption to drive operational
efficiencies
Africa’s potential for innovation and leapfrogging is slowly
affecting its hydrocarbons sector – we are finally seeing the
adoption of sophisticated software and tools such as AI and ML
in oil and gas. New ways to drill wells and handle equipment
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