• Behind every discovery in the African energy industry, final investment decision (FID), and first oil announcement in our continent are companies of all sizes.
  • Collectively, these companies are validating the long-held assertion by the Africa Energy Chamber (AEC) that the African continent represents the next frontier for energy exploration and production.
  • Where international corporate divestment from Africa’s oil industry is occurring, smaller players are taking up the slack.

Behind every discovery, final investment decision (FID), and first oil announcement in our continent are companies of all sizes, advancing our energy industry and bringing Africans closer to realizing the energy security and prosperity their petroleum resources represent.

Collectively, these companies are validating the long-held assertion by the Africa Energy Chamber (AEC) that the African continent represents the next frontier for energy exploration and production.

Despite concerns over corporate divestment from the African oil and gas sector in recent years — moves made largely to conform to expanding global ESG expectations — international oil companies (IOCs) and African national oil companies (NOCs) continue to be the key driving forces behind Africa’ short-term supplies, hydrocarbon potential, medium-term production, and spending.

As detailed in the released report by the Africa Energy Chamber, “The State of African Energy 2024 Outlook,” NOCs collectively hold the continent’s largest working interest share of African hydrocarbon potential and supplies due to their involvement in upstream operations while IOCs hold the second largest share from their legacy operations in both North and sub-Saharan Africa.

But we also see increased activity by international NOCs (INOCs) and independent companies in Africa. These entities are also contributing to the overall success of Africa’s fossil fuel industry.

National oil companies in leading roles

Our new outlook report explains that we expect African NOC flow rates to reach approximately 2.63 million barrels per day (bpd) of liquids and 13.55 billion cubic feet per day (Bcf/d) of gas in 2023. In 2024, while we expect NOCs’ total liquid product to drop to 2.57 bpd of liquids, we are forecasting a significant increase in their natural gas production to 14.17 Bcf/d.

Of all the NOCs operating across Africa, the efforts of just four amount to the lion’s share of the total supply. Estimates predict that, together, Sonatrach of Algeria, Angola’s Sonangol, Libya’s National Oil Corporation, and the Nigerian National Petroleum Corporation (NNPC) will be responsible for 85 per cent of liquids and 88 per cent of natural gas produced by African NOCs between 2023 and 2024.

The prominence of oil and gas production in the nations these NOCs represent is partly due to an open and cooperative approach to development and a shared commitment to progress.

In September 2023, having failed to meet its OPEC quota and contending with a decline in production, the NNPC announced a substantial reduction of its standard contract negotiation period from three years to six months. Formalizing the new terms in an agreement signed with oil majors Shell, Chevron, Eni, ExxonMobil, and TotalEnergies, the NNPC hopes they will help expedite foreign investment in Nigeria’s hydrocarbon sector. With $13.5 billion secured, Nigeria aims to reach a production level of 2.1 million bpd by December of next year.

Amidst the Angolan oil and gas industry’s return to a more prosperous position, which this year saw the nation outpace Nigeria, taking the top spot among Africa’s largest oil producers, Sonangol brokered a deal with the China National Chemical Engineering Company (CNCEC) outlining the development of a refinery in Lobito.

With a projected production rate of 200,000 bpd and a slated completion date in 2026, the refinery should eventually reduce Angola’s reliance on imports for gasoline and diesel.

Sonatrach has been working with Italian multinational energy company Eni in Algeria on natural gas production and importing liquefied natural gas (LNG) to Europe. Since signing a Memoranda of Intent in January of this year outlining future joint projects, including upstream decarbonization and energy transition initiatives, the two companies have made progress on these efforts, meeting in Algiers as recently as October 2023 to discuss fugitive gas emission detection and flaring-down options at Sonatrach’s natural gas fields.

Other recent developments include the Memorandum of Understanding established between Norway’s largest oil and gas producer, Equinor, and Libya’s NOC. The agreement includes plans to evaluate Libya’s maritime region in the Mediterranean for its oil and gas potential and extend oil and gas sector training to local personnel.

Read also: Nations gather in Kenya to bargain a global plastic treaty before 2023 end

Oil majors advancing exploration

In March of this year, in partnership with Shell and QatarEnergy, Namibia’s national petroleum corporation, Namcor, publicized a third oil discovery in the Jonker 1-X well in the Orange Basin off Namibia’s southern shore, adding to the sizeable discoveries made by Shell and France’s TotalEnergies in the Graff-1X and Venus-1X wells in 2022. Namibia expects to see the first oil from these finds by 2030.

At the September Angola Oil and Gas 2023 conference and exhibition, Melissa Bond, Managing Director for ExxonMobil Angola, reported 18 discoveries in Block 15 and plans for further drilling in the Namib Basin next year.

Numerous oil and natural gas discoveries in West Africa also show great promise. Considering just the BP-Kosmos Yakaar-Teranga discovery in Senegal, BP and Kosmos’ Orca discovery in Mauritania, and Eni’s Bailene discovery off the Ivory Coast amount to 3.6 billion barrels of oil equivalent, with additional sites in Ghana, Gabon, and Angola, this region is an exploration hot spot.

As exploration is crucial to sustainability for Africa’s oil and gas industry, the AEC is pleased to report active exploratory drilling schedules over the next two years, with oil majors operating in Algeria, Egypt, Nigeria, and Namibia as the main drivers behind these efforts.

Filling voids and capitalizing on opportunities in the African energy industry

Where international corporate divestment from Africa’s oil industry is occurring, smaller players are taking up the slack.

Whether under public pressure to decrease emissions and focus on sustainable development goals or stakeholder pressure to sell off mature fields in pursuit of higher returns, as oil and gas majors pull away from portions of their operations, INOCs and wholly independent entities remain eager to take over where they left off.

By taking on ventures like the re-development of declining wells to boost production, these smaller companies are helping to satisfy the increasing global demand for fossil fuels while offering continued support to host communities facing the perils of abandonment otherwise, and their cumulative efforts add up to a significant percentage of Africa’s energy economy.

As documented in our 2024 outlook report, the 24-month period of 2023-2024 will see INOCs like Equinor, PetroChina, the China National Petroleum Corporation (CNPC), and several more responsible for three-quarters of all INOC liquids output in Africa.

In the same time frame, we project that independents like the APA Corporation, Marathon Oil, Wintershall DEA, Perenco, Seplat Energy, Tullow, and ConocoPhillips will collectively produce the third-highest natural gas output.

Our optimism grows as the AEC continues to advocate for a thriving African energy industry and encourage investment in our continent — just as we encourage every hydrocarbon-bearing African nation to engage in uncomplicated, mutually beneficial trade negotiations.

Each outlook report we publish for the AEC indicates that the African oil and gas industry is secure, strengthening with time, and on its way to becoming an invaluable asset to the global energy market.

The author, NJ Ayuk, is the executive chairman of the African Energy Chamber

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