What is the future of Africa's oil and gas?
The future outlook for Africa's oil and gas sector is promising, yet complex, with various factors shaping the sector. Despite being a continent rich in natural resources, the exploitation of these resources hasn't consistently translated into widespread benefits for its people.
Africa's abundant natural resources have long been recognised, yet the continent has faced challenges in fully harnessing these assets to benefit its population.
There's a unique opportunity for oil and gas-producing nations in Africa to transition towards a more sustainable energy future, according to Energy Expert Joshua Narh has said.
The Executive Chairman of the Energy Chamber of Ghana and the Project Mentor for the African Energy and Minerals Management Initiative emphasized the diversification of African economies through oil and gas revenues.
"Many African countries heavily reliant on oil and gas revenue are likely to diversify their economies to reduce vulnerability to commodity price fluctuations. This could involve investing in renewable energy sources, agriculture, manufacturing, and services sectors." "Oil and gas will likely remain significant contributors to many African economies in the foreseeable future. New discoveries and technological advancements in exploration and production techniques may lead to increased oil and gas output in some regions," he said.
McKinsey estimates a significant increase in energy demand by 2040, presenting both challenges and opportunities for the African continent
McKinsey Insights indicated that the ongoing conflict in Ukraine could spur increased demand for oil and gas from African countries equipped with the requisite infrastructure and reserves. The conflict, which has driven up European gas prices over the past year, prompted the European Commission to propose that Europe achieve self-reliance in renewable energy and diversify the sources of its natural gas supply by 2030. This can lead to heightened demand for Africa’s oil and gas.
The Society of Petroleum Engineers also predicts that the future of oil and gas in Africa will surpass its current state. "Africa will experience the second-largest growth in gas supply by 2050, with the demand for natural gas projected to rise by 85% and account for 35% of Africa."
To leverage the continent’s resources and enhance energy security, Narh explained that "African countries may increasingly collaborate on regional energy projects, such as cross-border pipelines and liquefied natural gas (LNG) terminals."
"Adequate infrastructure, including pipelines, ports, and refineries, will be essential for the growth of Africa's oil and gas industry. Governments and private investors may need to collaborate to develop infrastructure projects that facilitate the efficient transportation and processing of hydrocarbons," he added.
