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The African Energy Chamber (AEC) has averred that Africa’s energy sector is a catalyst for growth and development across the continent, saying “Industry and investors need to stay abreast of the high-speed advances in the energy landscape in the continent.”
Business Hilights recalls that last week, AEC launched its first annual African Energy Outlook for 2020.
The report, compiled to provide key insight on what sub-Saharan Africa’s oil and gas industry can expect to see next year, also doubles as an overview of the role the energy sector stands to play in developing competing economies.
Though the continent’s oil and gas sector was significantly impacted by the oil price crash, 2019 has proven to be a year of recovery for many African economies. With many continuing works on projects that were previously halted or cancelled, some developing new large-scale projects and others working to increase their exploration and production activities; the continent is undoubtedly poised to see accelerated growth in the years to come.
To this, in the African Energy Outlook 2020, the AEC showcases key economies and projects that are set to transform the energy landscape, placing the sector at the center of economic growth. In outlining major projects and economies to look out for in 2020, the Outlook features highlights on announce oil projects in Angola, Ghana, Senegal and Nigeria as well as announced gas projects in Mauritania, Congo Republic, Ethiopia, South Africa and Cameroon.
In unlocking the next phase of transformation for the sector, the report insists the market access and intra-Africa cooperation will be critical, particularly in oil and gas pipeline and infrastructure projects.
In his remarks, the Executive Chairman of the AEC, Barr. NJ Ayuk, said “Market access is increasingly on the agenda of existing and upcoming African producers of oil and gas, with several cross-country oil and natural gas pipelines in the works to unlock billions of dollars,” it says. Noting that, “Lessons have to be learned on how to negotiate transnational infrastructure deals and 2020 will show if African nations have learned how to cooperate better for the benefit of all.”
While revealing that “Next year, we need to see continued progress, Ayuk added that AEC understands what we have on our hands, now we must build environments that will not only attract investors but keep them for the long-term.”
He said “That is going to be our main challenge, ensuring policy certainty, political stability, favourable environments and matching returns.”
“In 2020, hundreds of blocks and acreages will be up for grab across Africa, from Senegal to Nigeria to Somalia. Competition will be fierce to attract capital from a diversifying basket of explorers now coming from North America, Europe, Russia, China, India, South East Asia and the Middle East.
In its Energy Outlook 2020, the Chamber notably stresses investors’ concerns over uncertain fiscal terms in sub-Saharan Africa, and calls on governments to find better ways to reconcile their expectations of short-term tax gains with the need for sustainable and long-term investment in exploration.
“The importance of increasing exploration efforts cannot be under-estimated in Africa. The continent is the world’s hottest exploration frontier, with several discoveries made over the past few years. The world’s largest discovery this year was made off the coast of Mauritania by Kosmos Energy. It adds up to other large discoveries made this year by Noble Energy in Equatorial Guinea, or the Springfield Group in Ghana for instance.
“2020 needs to be a drilling year,” declared Nj Ayuk, Executive Chairman of the African Energy Chamber and CEO of the Centurion Law Group. “Africa has the highest exploration success rates in the world. In basins like the MSGBC, international explorers like Kosmos Energy have even had a 100 percent success rate from all their exploratory drilling,” he added. “It is up to African governments and legislators to provide the right framework to keep attracting these kinds of players ready to take risks and bet on our continent’s potential.”