African oil industry will flourish in 2023

[ Time:2023-03-10 | Hits:788 ]

From global demand growth to supply uncertainty, to the demand for low-carbon oil operation, the combined effect of a series of factors means that 2023 may be the year of the African oil industry

At the COP27 Climate Summit, African governments made it clear that they would develop natural resources to combat energy poverty

With the support of the government and the potential of using new low-carbon production methods and carbon capture technologies, African oil countries have great development potential

In recent years, several energy companies have developed oil and gas projects in Africa and the Caribbean because they have turned to low-carbon oil and gas and future-oriented businesses. With the increasing pressure of decarbonization, many oil and gas giants have left the aging and carbon-intensive operation sites and turned to develop new projects in non-traditional oil production areas. At the same time, African countries are determined to take a share of the global energy cake and are unwilling to give up precious natural resources and refuse to participate in the operation. So, as several African countries continue to develop their oil industry, what will happen in 2023? After the epidemic, as the demand for oil and natural gas continued to rise, we saw that governments turned to other major oil countries for supply, because Europe imposed sanctions. While increasing the oil production of traditional oil fields, many countries have begun to strengthen their relations with emerging oil powers, hoping to ensure the supply of low-carbon oil while the global demand for fossil fuels is still high. Most of these low-carbon businesses are developed in areas where huge reserves have recently been discovered, such as the Caribbean and Africa. In these regions, oil giants are using low-carbon production methods and carbon capture technology to ensure that crude oil production is less harmful to the environment.

At the COP27 Climate Summit held in Egypt in November, African government representatives made it clear that African countries should be allowed to develop fossil fuel resources to help their people out of poverty. As the United States and Europe gradually move away from the energy sources of large capacity countries, the strong global demand for oil and natural gas has become clear, and African leaders have found opportunities to promote low-carbon oil development across the continent. The Namibian oil commissioner Maggy Shino said: "There are many oil and gas companies attending the meeting because Africa wants to send a message that we will develop all our energy resources to benefit our people, because our problem is energy poverty."

This will help stimulate the development of the oil and gas industry. Several projects are planned to be carried out in the African continent in 2023. In addition, the annual African Oil Week will be held again in October to promote the development opportunities of the oil industry on the African continent. According to analysts, more than 70 oil and gas projects will be put into operation by 2025, providing up to 2.3 million barrels of crude oil per day.

Total Energy announced last year that it would invest in the Haitang gas field in Angola, another investment of the company in other projects in the region. This will increase the output of the region by 30000 barrels per day. After an investment of 850 million US dollars, it is expected to start operation at the end of 2024.

As one of the largest oil producers in Africa, Nigeria also has an ambitious plan to diversify its oil business by developing new projects outside the Niger Delta in the north of the country. After years of delay, Shell will continue to promote the Bonga North project this year, and will invest US $10 billion to develop the Bonga South West oil field in 2024. Bonga North is believed to have as many as 525 million barrels of crude oil, which can support Nigeria's goal of raising production to the pre-epidemic level. In recent months, Nigeria has repeatedly failed to meet the OPEC quota.

Uganda plans to continue to expand its oil industry through the Albert Lake Development Project operated by Total Energy. So far, the project has invested US $10 billion. Uganda plans to develop the upstream oil projects of Tillenga and Kingfisher and build the long-awaited 1500km East African crude oil pipeline, which has been delayed for many years. If the project is completed, Uganda will obtain 230000 barrels per day of production from Lake Albert.

Ghana is focusing on its domestic production and hopes to double its production from less than 200000 barrels per day to about 420000 barrels per day by the end of this year. The recent discovery in the Tano Cape Three Points block has attracted more foreign investment. Aker Energy of Norway is operating its business in the region.

With the announcement of two production sharing contracts with the Republic of Equatorial Guinea by the African Oil Company (AOC) in February, a new oil power is emerging in Africa. If the government applies, AOC is expected to hold 80% of the operating interests in the offshore EG-18 and EG-31 blocks.

Due to the strong global demand for low-carbon oil and natural gas, Africa has found a clear space for Africa on the international oil stage, and countries on the African continent have taken rapid action to ensure their seats. Although Nigeria and other old oil countries are expanding their industries, emerging countries such as Ghana and Equatorial Guinea are encouraging greater exploration efforts and developing new projects to provide low-carbon oil and gas and fill the gap of green transformation.