By Raven Tribune
Although occupier Russia is threatened by sanctions, there is speculation as to how much Africa needs to become an oil and gas supplier. The continent is already positioning itself.
Somalia is considered a dangerous place and a failed state: it has been shaped by tribal wars, drought and the terrorism of al-Shabaab, an Islamic militant group. Nevertheless, an unstable government is trying to return to normalcy and want to lure companies to the horn of Africa – recently re-creating fossil resources.
Oil Minister Abdirashid Mohammad Ahmed says there are high oil and gas reserves in the Okadan Basin and beyond the Somali coast. At the next big industry conference for African Energy Week in Cape Town in October, he wants to “meet with global investors and give a decisive impetus to the high-energy sector.”
The Somalia Petroleum Law, an oil authority and the Somali National Oil Corporation – all have a legal framework in place to attract international oil companies. A few years ago, in the first round of licenses, oil reserves were estimated at 30 billion barrels and natural gas reserves at 5.7 billion cubic meters. Shell and ExxonMobile blocks are protected, but not used due to “force labor”.
Between hype and exaggerated expectations
Somalia is special – but currently the country is not an isolated case in Africa. There is speculation across the continent that Africa could become Europe’s new energy hub, while occupied Russia is threatened by sanctions – or Western consumers simply do not want to buy oil and gas suspected of being war criminals. Some warn against exaggerated expectations. However, the oil and gas states are certainly keen on expanding their fossil fuel infrastructure before the start of the green transition – especially as large sections of the population are still short of energy.
The population of Africa is growing rapidly. Today, one-sixth of the world’s population on the continent accounts for only six percent of global energy consumption and three percent of all climate-damaged emissions. A good 600 million Africans are still without electricity, and many residents – all over Europe – will flock to cities in the next 20 years. The continent faces the dual challenge of producing more energy without harming the climate. That’s why Africa is not the only seasoned conservationist facing.
“Africa’s energy path is of global significance,” said Fatih Berol, head of the International Energy Agency’s IEA. The IEA emphasizes that “Africa can play a key role in transforming the world’s energy systems into a renewable age.” Throughout sub-Saharan Africa, despite high demand, it is “heartbreaking” to see one-third of total solar energy produced by Britain, says Prowl.
See also ++ Ukraine Conflict: Moscow and Washington make serious allegations
Nigeria and Angola play only a minor role
So industrialized nations are primarily promoting Africa’s renewable energy – renewable energy – from wind and solar power and more recently to green hydrogen. Various initiatives, including development banks, states and the IEA, “Desert to Power” are seeking financial assistance, technology transfer and investors because capital spending on the continent is seven times higher than in Europe or North Africa. The risk is high. But Africa’s basic needs – and essential government revenues – will initially come from coal, oil, gas and hydropower.
Today, Africa accounts for about 8 percent of world oil production, compared to 12.4 percent for Russia and 31 percent for the Middle East, according to the IEA. Compared to world market leaders Saudi Arabia (352 million) and Russia (269 million), Nigeria will play a smaller role as net exporters in 2019 with 99 million tonnes and Angola 63 million tonnes. Other oil producers are small wells and deposits in Libya, Algeria, Egypt and Sudan, Ghana, Congo, Uganda, Gabon and Chad. Most recently, Namibia celebrated the discovery of significant oil and gas fields by Total and Shell, promising three billion barrels of oil.
In the African gas sector, too, some radical players now account for six percent of global gas production, with Algeria accounting for 2.3 percent above all – compared to Russia’s 18 percent worldwide (US 23.6, Middle East 16, OECD 38). However, net exports of 41 billion cubic meters from Algeria and 27 billion cubic meters from Nigeria (2020) are not far from the net exports of Africa to the US (77 billion) or Russia (230 billion).
How quickly can producing countries increase capacity?
In view of the large number of deposits, these amounts can always be expanded. Approximately 13 trillion cubic meters of natural gas reserves are due to the continent. In 2021, the proven oil reserves total 125 billion barrels. However, the question is under what conditions and at what speed can they be created. Thomas Scurfield, an economist at the London-based Natural Resources Governance Institute, said: “Africa certainly has great potential to become a powerful energy hub.” But there are no mature plans to start production quickly. In one study, Scurfield calculated that the average growth time from the discovery of deposits in Africa to the actual production in the 1960s was 12 years.
See also Corona epidemic in Germany: Mecklenburg-Western Pomerania releases Astrogeneka for all ages – Knowledge
To further liberate Europe’s energy supply from Russia, the European Union has already announced its intention to involve Africa more closely in its REPowerEU program. EU Energy Commissioner Kadri Simpson says Egypt, Algeria and Nigeria are the most reliable suppliers. “We want to increase trade.”
However, it is uncertain to what extent oil and gas will be operational here – above all to what extent the leading producing countries can quickly increase their capacity. Market observers point out that neither Nigeria nor Angola have pumped enough to reach their OPEC quota today, especially in the case of oil. According to market reports, investments in capacity building have been low in the politically unstable environment plagued by corruption in recent years.
Given the rapid availability of natural gas, NRGI’s product experts believe it would be a good idea to look to Europe, North America or elsewhere to change supply gaps. Large export volumes will require large investments in LNG terminals or pipelines. “These are long-term investments, and banks need more network than expected today to ensure profitability,” Scurfield warns. After all, the global North is heading towards the Renewable Energy Era.
Mozambique has big plans to build LNG terminals
Nevertheless, the BP Group expects gas production in Africa to increase by 80 percent by 2035. In its view, the African Energy Chamber estimates that more than 60 percent of fossil resources will be generated in gas fields over the next ten years. Nigeria has high gas reserves, but the West African country produces half as much as Algeria and less than Egypt. According to Scurfield, the recently politically revived plan to pump 30 billion cubic meters a year to Europe via the “Trans-Sahara” pipeline via Niger and Algeria was “in the drawer for years.”
Algeria is geographically very close to Europe and aims to double its gas field development and production over the next five years. Italy and Spain in particular are focusing on making greater use of existing pipelines or adding them. But the government in Algiers has deep diplomatic divisions with Spain over the controversial status of the Western Sahara. So ROM may have better cards. A 2,000-kilometer transmit pipeline is planned for Italy, to be completed by 2027.
See also Russian offensive begins in the east: All hospitals in the Luhansk region are destroyed
In the southeast of the continent, Mozambique has higher gas reserves than Egypt and Libya and has large plans to build an LNG terminal over the years. But the unrest in the country has not even allowed production to cross the initial stage, and real progress is not expected until 2025. Tanzania, on the other hand, which borders Senegal and Mauritania to the north and has recently discovered deposits, wants to start quickly.
According to the trusted American firm Brookings, it has “recognized the long-term development opportunities arising from the conflict between Russia and Ukraine” – and Tanzania is one of the countries seeking to contribute to Europe’s independence from Moscow. President Samia Zuluhu Hassan says he has the sixth largest gas reserves on the continent at 1.6 trillion cubic meters. Previous disputes with energy companies should be a thing of the past, and maritime projects should be updated by 2023.
Hype or true?
There is a certain enthusiasm in Africa, says Silas Olong, an energy expert at the Resource Governance Agency. But in the long run it does not apply to the risk assessment that companies make. In his view, perspectives are inconsistent, and the potential increase in energy supplies from Africa is still many years away – and the fundamental question arises as to whether Europe, in view of the planned transition from fossil fuels to renewable sources, will adopt new ones. Long-term obligations to oil and gas want to let Africa inside.
But Olang warns that if Europe really wants to develop the continent as an energy supplier, it must put pressure on better governance: it can also introduce accountability in presidential palaces, while at the same time fighting the energy poverty of the people – and finding a way to a sustainable energy supply in Africa in the medium term. “Then it could be a win-win situation.”
Otherwise, his colleague Scurfield warns, “the current heated debate will end in disappointment and dire consequences” – meaning governments promise rich wealth to their citizens, but take on new debts to build infrastructure and utility networks, and cannot pay them off when problems arise. The situation was similar in Ghana in recent years.