Global news outlet
Feb. 11, 2022
The African Energy Chamber spoke to Impact Oil & Gas CEO, Siraj Ahmed, about increasing oil production across the African continent, low carbon gas monetization and pending deals that should be concluded at the upcoming African Energy Week, taking place in Cape Town on 18-21 October.
Despite being blessed with abundant oil and gas resources, Africa’s production has been on the decline, representing a challenge for the continent as it moves to initiate a COVID-19 economic recovery and address energy poverty. With exploration restricted due to reduced capital for fossil fuel projects and the transition away from hydrocarbons, the continent needs to act now if it is to reap the benefits of its oil and gas resources.
What will this production underperformance in Nigeria, Libya, Angola, The Republic of the Congo, Equatorial Guinea and African countries mean for the continent as a whole?
These countries are heavily dependent on the export of oil and natural gas, so production underperformance will inevitably have an impact on their economies, both in terms of access to cheap energy and revenues into the treasury. This in turn could have a destabilizing effect on these countries. Temporary underperformance can, however, be managed, but persistent underperformance would be far more damaging, holding back development and the ability of these countries to invest in the energy transition.
In modern society, technology drives progress, but technology requires power – whether a smartphone, tablet, laptop, or other gadget designed to make life easier. Nations that fail to invest in energy will be left behind and will lack the economic growth to fund development. This is an issue for health and social care, progress in living standards and access to opportunities.
In the short term, reduction in supply means higher oil prices, which leads to higher inflation and higher inflation hits the poorest the hardest. These countries have the means and ability to turn this around, so the underperformance need only be temporary.