Africa is experiencing a “comeback” according to NJ Ayuk

New oil and gas E&P in African basins such as MSGBC (Mauritania, Senegal, The Gambia, Guinea, Guinea Bissau) coming online this year, coupled with the backdrop of the Russia-Ukraine war and a series of security issues globally, are driving investors to diversify their portfolios and look to Africa for private sector opportunities and enhanced energy security for governments. Europeans in particular are courting Africa much more aggressively than been had seen in the years preceding COVID-19.

Whilst the pandemic hit Africa hard, African leaders’ stance of continuing investment in oil and gas projects, as well as in renewables, and their eagerness to partner with financial and technical partners, is bringing about what NJ Ayuk, Executive Chairman of the African Energy Chamber, calls the “comeback”.

According to Offshore Energy, Urgewald’s report on Rystad energy data shows that “Africa (is) turning into hotspot for oil & gas exploration as investments reach $5.1 bln in 2022” with total CAPEX for oil and gas exploration in Africa having risen from $3.4 billion in 2020.

“We saw it slowed down. A lot of projects were stopped. Most people counted out the continent. And we also saw geopolitical instability as well” explains NJ Ayuk. Some projects, like the mammoth project in Mozambique, had been stopped due to terrorist insurgencies.

Ayuk told Qonversations that Total Energies are “already in talks about getting that back online”. There is a return of capital and investors in major projects such as this, and the Congo, out of which ENI of Italy has been operating for decades, with a renewed injection of capital, $10 bln, is changing the game as Ayuk explains, and will provide “gas for Africa, gas for the world. Africa will be playing a global push towards solving world energy crisis”.

The report found that 200 companies are developing or exploring new fossil fuel reserves or building the infrastructure, such as gas and coal-fired power plants, pipelines, or liquefied natural gas (LNG) terminals across the African continent. As indicated by the findings from NGOs, these developments are occurring in 48 of the 55 African nations.

18 of the countries are, “what the industry calls – “frontier countries,” which includes countries like Namibia, Uganda and Somalia that have little or no existing oil or gas production” reports Offshore Energy. Or as NJ puts it, “Namibia – yesterday’s nobody, today’s somebody; five massive oil discoveries, billions of barrels being discovered”.

This year alone Woodside and BP are producing oil and gas in the MSGBC region. “Senegal, Mauritania, you’ve seen oil production that’s going to start with the Sangomar with Woodside and you’re also seeing natural gas that’s going to be produced out of there with the GTA” NJ confirms.

On the trends to watch, momentum has been building in Namibia as it prepares to become a global hydrogen hub. “In Namibia where you’re seeing a $10 billion hydrogen project”, as well as major investment in hydrogen in South Africa, and also “in the Maghreb region, in Morocco, Tunisia and Egypt, you see huge, huge green hydrogen” according to NJ. “So, an African energy mix is on the horizon”.