Staff Reporter
JOHANNESBURG, South Africa, November 15 — NJ Ayuk, Executive Chairman of the African Energy Chamber, sheds light on the dynamic landscape of Africa’s energy sector and its pivotal players in a recent article.
Beneath every breakthrough, final investment decision (FID), and inaugural oil proclamation on the continent lies a diverse array of companies propelling the energy industry forward, steering Africa toward the realization of energy security and prosperity promised by its petroleum resources.
These entities collectively affirm the African Energy Chamber’s long-standing assertion that Africa stands as the next frontier for energy exploration and production. Despite apprehensions about corporate divestment from the African oil and gas sector, driven primarily by a desire to align with expanding global Environmental, Social, and Governance (ESG) expectations, both international oil companies (IOCs) and African national oil companies (NOCs) persist as the driving forces behind Africa’s short-term supplies, hydrocarbon potential, medium-term production, and expenditure.
The recently released report by the African Energy Chamber, titled “The State of African Energy 2024 Outlook,” underscores the significant roles played by NOCs and IOCs. NOCs hold the largest working interest share of African hydrocarbon potential and supplies due to their upstream operations, with IOCs closely trailing, deriving their share from legacy operations in North and sub-Saharan Africa. Yet, there is a discernible rise in activity by international NOCs (INOCs) and independent companies in Africa, contributing to the overall success of the continent’s fossil fuel industry.
National Oil Companies in Leading Roles
According to the AEC’s outlook report, African NOC flow rates are projected 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. While a slight dip is anticipated in NOCs’ total liquid production in 2024, there is a noteworthy surge in natural gas production, expected to reach 14.17 Bcf/d.
Four key NOCs—Sonatrach (Algeria), Sonangol (Angola), Libya’s National Oil Corporation, and the Nigerian National Petroleum Corporation (NNPC)—are predicted to contribute significantly, responsible for 85% of liquids and 88% of natural gas produced by African NOCs between 2023 and 2024. The collaborative and progressive approach to development shared among these nations contributes to their prominence in oil and gas production.
In Nigeria, facing a decline in production and falling short of its OPEC quota, the NNPC has taken proactive measures, reducing its standard contract negotiation period to six months. This move formalized in an agreement with major oil companies, aims to expedite foreign investment, with Nigeria aspiring to reach a production level of 2.1 million bpd by December of next year.
Angola, surpassing Nigeria as Africa’s largest oil producer, demonstrates a return to prosperity. Sonangol’s partnership with the China National Chemical Engineering Company (CNCEC) for a refinery in Lobito, with a projected production rate of 200,000 bpd and completion in 2026, aims to reduce Angola’s reliance on gasoline and diesel imports.
Sonatrach in Algeria collaborates with Italy’s Eni on natural gas production and LNG export to Europe, focusing on upstream decarbonization and energy transition initiatives. Recent meetings in Algiers have addressed crucial aspects such as fugitive gas emission detection and flaring-down options at Sonatrach’s natural gas fields.
A notable Memorandum of Understanding has been established between Norway’s Equinor and Libya’s NOC, outlining plans to assess Libya’s maritime region for oil and gas potential and extend sector training to local personnel.
Oil Majors Advancing Exploration
Collaborative efforts by oil majors, as evident in Namibia, are leading to significant discoveries. In partnership with Shell and QatarEnergy, Namcor announced a third oil discovery in the Jonker 1-X well in the Orange Basin. ExxonMobil Angola reported 18 discoveries in Block 15, with plans for further drilling in the Namib Basin in the coming year.
West Africa remains an exploration hotspot, with promising discoveries in Senegal, Mauritania, Ivory Coast, Ghana, Gabon, and Angola. These findings, including the BP-Kosmos Yakaar-Teranga, BP and Kosmos’ Orca, and Eni’s Bailene discoveries, collectively amount to 3.6 billion barrels of oil equivalent.
Filling Voids and Capitalizing on Opportunities
In areas witnessing international corporate divestment from Africa’s oil industry, smaller players are stepping in to bridge the gap. Whether driven by public pressure to reduce emissions or stakeholder pressure to divest mature fields, INOCs and independent entities are eager to assume responsibilities relinquished by major oil and gas corporations.
Ventures such as the re-development of declining wells to boost production highlight the contribution of these smaller companies to the global demand for fossil fuels. As detailed in the 2024 outlook report, INOCs like Equinor, PetroChina, China National Petroleum Corporation (CNPC), and others are projected to account for three-quarters of all INOC liquids output in Africa. Independents like the APA Corporation, Marathon Oil, Wintershall DEA, Perenco, Seplat Energy, Tullow, and ConocoPhillips are expected to collectively produce the third-highest natural gas output.
As the African Energy Chamber continues to advocate for a thriving African energy industry, promoting investment and uncomplicated, mutually beneficial trade negotiations, optimism for the future of the African oil and gas industry grows. Each outlook report published by the AEC underscores the industry’s security, strengthening trajectory, and its evolving role as a valuable asset in the global energy market.
To explore the comprehensive insights provided in the 2024 outlook report, visit www.EnergyChamber.org.
