Per Magnus Nysveen, Senior Partner and Head of Analysis at Rystad Energy has said that Africa will host the majority of new oil and gas discoveries over the next 30 years compared to other regions, underscoring the need to introduce more licensing rounds to exploit its huge untapped potential.
Nysveen made this known in a panel discussion held at the Pre-Event Workshop Day during the African Energy Week (AEW): Invest in African Energies 2024, noting that Africa stands a chance to supply the growing global energy demand and will become the last frontier for new discoveries by 2060.
In the past three to five years, Nysveen said, the African continent has introduced 300 million barrels of oil every year and replaced 10% of existing production with new projects.
“We underestimate the resources Africa has. Risk is overestimated by global investors and there are little licensing activities. Africa needs to capitalize on the massive capital being brought in by the small E&P firms, as well as by the majors to unlock its full potential,” stated Nysveen.
Furthermore, Ibitola Ukabam, Associate Vice-President, Natural Resources (Oil & Gas and Mining) at investment firm Africa Finance Corporation, added that 85% of growth within the oil and gas sector will emerge outside developed economies, with Africa holding a large share.
Ian Cloke, COO at upstream oil and gas firm Afentra, added that unlike in the North Sea where investment has increasingly become unfeasible in the past 15 years due to transition policies, Africa is prioritizing a just energy transition, hence new investments coming in.
Expanding on the origin of the majority of growth in Africa, Cloke added that “Angola has the most stable fiscal terms. The creation of enabling environments onshore in Nigeria, Libya, and South Sudan can fast-track project rollouts.”
Pranav Joshi, Vice President of Rystad Energy, added that “TotalEnergies’ FID on the Venus prospect in Namibia, as well as Mozambique’s Area 4 project, will drive new FIDs and production growth in Africa in the next few years.”
With deepwater projects and supply proving secure globally, Ukabam reiterated the need for global majors to invest in local infrastructure, adding that this will enhance Africa’s potential to source offshore resources to meet local demand. Ukabam said that majors must not continue making slow decisions to develop local infrastructure, to match their export agenda.