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Addressing Delays in the Name of Progress: The State of Play of African Oil and Gas (By Gawie Kanjemba)

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African oil

At a time when African oil and gas holds the key to a secure energy future, the trend of project delays needs to be addressed

JOHANNESBURG, South Africa, May 16, 2023/APO Group/ — 

By Gawie Kanjemba, International Energy Fellow, African Energy Chamber (www.EnergyChamber.org)

Historically, oil and gas projects are known to experience delays ranging from 5% to 20% of the project duration owing to project complexity, significant capital requirements and the multi-faceted nature of developments. In 2023, oil and gas projects across Africa are experiencing even further delays, a trend which is detailed in the African Energy Chamber’s (AEC) recent market-focused report, The State of African Energy Q1, 2023 Outlook. The report paints a telling picture of the challenges facing the industry and the impacts these delays could have.

Procrastination: The Foe of Progress

According to the report, delays from discovery to final investment decision (FID) to development kick-off have increased, leading to revenue losses due to deferred production, increased costs for contractors, and essentially lack of progress. This trend mimics Parkinson’s Law of Delay, an observation that work will expand to fill the time allocated to it. In this scenario, procrastination is the ultimate foe of progress and productivity, and unless delays are addressed, Africa will not be able to unlock the full potential of its oil and gas. 

Despite their significance, a number of large-scale projects are experiencing a lull. These include the Mozambique liquefied natural gas project which has experienced multiple delays due to security concerns. Developed by TotalEnergies, the project was originally scheduled to start production in 2024 (FID was secured in 2019) but the start-up is now delayed to the late-2020s due to the declaration of force majeure by TotalEnergies. Additionally, the East African Crude Oil Pipeline – which will transport crude oil from Uganda to Tanzania for export – has been delayed due to financing challenges and environmental opposition. The project, which is being developed by TotalEnergies and other partners, was initially expected to start operating in 2020 but is now expected to come online in 2025. In Nigeria, several offshore oil projects have experienced delays due to security concerns, regulatory issues, and technical challenges. For example, the TotalEnergies-developed Egina oil field, saw a 12-month halt due to issues related to local content requirements and delays in the delivery of key components. Meanwhile, sizeable natural gas volumes discovered in Ethiopia in the 1970–1980s are yet to see FID, with project delays extending decades.

However, there are several successful stories such as the Jubilee field off the coast of Ghana, which has been in production since 2010 and has had a significant positive impact on the country’s economy. Another example is Egypt’s Zohr gas field, which has been in production since 2017, and Angola’s Kaombo, which has been producing since 2018. These countries have experienced relatively few delays in their projects and are now enjoying the benefits of their successful development. Unless other O&G projects are developed with the same urgency, Africa’s production forecast will see a downturn.

According to the AEC’s report, the currently producing fields, both liquids and gas, are in terminal decline due to depleting reservoirs

Start-ups Critical for Long-Term Output

According to the AEC’s report, the currently producing fields, both liquids and gas, are in terminal decline due to depleting reservoirs. Infill drilling or redevelopment programs on these fields, which involve brownfield spending, may only temporarily stabilize the decline in production. Liquids output from these fields is expected to decline from 7.66 MMbbls/d in 2023 to 6.85 MMbbls/d in 2025 and 4.7 MMbbls/d in 2030. The average annual production decline rate is 8% through 2025-2030 and a higher 10% through 2031-2040. Any further delays or shelving of future start-ups can be catastrophic to Africa’s hydrocarbon output. Although short-term (2023-2025) start-ups are expected to have little impact on the forecast, the medium-term (2026-2030) and long-term (2030+) start-ups are expected to drive a revival in Africa’s liquids output. The good news is that the overall impact of delayed start-ups is short-lived, and the total liquids output from Africa is expected to ramp up to about 8.4 MMbbls/d in 2036.

Similarly, regarding gas production, the decline in producing fields, though terminal, is not as steep as liquids-producing fields. The short-term start-ups are estimated to account for 10% of the total output by 2025, but the share from the currently producing fields is expected to drop to 50% by 2031 and further to about a quarter of the total output by 2040. The long-term start-ups are estimated to add up to a third of the total output by 2035 and half of the total output by 2037-2038, and this share is only expected to increase going forward.

Capital Flows to Africa’s Deepwaters

Governments are already considering project delays and the issues caused, both economically for the countries dependent on hydrocarbon exports and domestically for countries looking to diversify the energy sector. Efforts have been made to address these issues, such as Nigeria passing the Petroleum Industry Act resulting in new production-sharing contracts signed with supermajors. As such, investment is seeing a gradual surge, and Africa’s deepwater prospects are gaining attention.

Due to the fact that most of the untapped O&G are currently located in deep waters off the coast of Africa, the majority of future investment is expected to be directed towards the deep offshore. By 2025, it is projected that 45% of the estimated $24 billion greenfield spending will be in deepwater projects, and by 2030, it is estimated to increase to over 50%. This trend is expected to continue, with over 55% of the estimated $64.5 billion total spending in 2035 projected to be spent on deepwater projects. Of the estimated $775 billion total greenfield spending between 2023 and 2040, approximately 48% is expected to be spent on deepwater projects.

Some notable deepwater projects in Africa include the Greater Tortue Ahmeyim (GTA), Yakaar–Teranga, Bir Allah, and Orca projects offshore Senegal-Mauritania as well as the Pecan project offshore Ghana; the Brulpadda and Luiperd gas fields offshore South Africa; and the recently discovered Graff, Venus and Jonker finds offshore Namibia. These deepwater projects are significant in terms of reserves and cost, making them major drivers of O&G spending. Given the importance of these projects for Africa’s production forecast, both governments and operators must prioritize securing funding for their development.

The AEC’s State of African Energy Q1, 2023 Outlook provides a comprehensive overview of the state of play of Africa’s O&G projects, highlighting the urgent need to advance collaboration, investment and development. Time is of the essence, and missing this opportunity could result in a significant development gap between Africa and the rest of the world. However, with accelerated projects, it is still possible for Africa to utilize its resources while adhering to global climate targets. In this context, AEC Executive Chairman NJ Ayuk’s slogan, “Drill baby Drill!” holds a palatable meaning. Let us work together to prevent project delays and drive environmentally-sound developments so that Africa benefits from its O&G resources. 

Distributed by APO Group on behalf of African Energy Chamber.

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RIOT Network and MediaTek collaboration expands digital access in South Africa through innovative, community-driven Wi-Fi solutions

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RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities

JOHANNESBURG, South Africa, November 22, 2024/APO Group/ — 

MediaTek (www.MediaTek.com), a global fabless semiconductor company powering nearly 2 billion connected devices a year, and RIOT Network (https://RIOT.Network), a community mobile broadband provider in South Africa, have announced the successful integration of Mediatek’s Filogic 830 (https://apo-opa.co/3CIbkNl) chipset into RIOT’s second-generation CROWDNet Core Nodes.

The successful deployment of the CROWDNet nodes has enabled RIOT Network to achieve its aim of offering uncapped internet at an affordable price of R99 per month, and to do so profitably. To date, RIOT Network, in partnership with Sonke Telecommunications, has leveraged the nodes to connect more than 800 households and 5000 users in Olievenhoutbosch to uncapped Wi-Fi services.

RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities. Its CROWDNet Nodes, enable an innovative model for deploying user-operated network infrastructure. Community members serve as operators of some of the core network devices to earn a share of the fee from neighbours who use the service.

With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity

CROWDNet powered by MediaTek Filogic 830 brings affordable, last-kilometre broadband to communities where it is not commercially viable to deploy towers or fibre. The MediaTek Filogic 830 is a high-performance SoC for routers, repeaters, access points and mesh networking devices. The SoC enables device makers to build-in powerful applications based on an energy-efficient, Wi-Fi 6-ready platform.

“The Mediatek’s Filogic 830 chipset delivers a unique balance of high performance and cost-efficiency, allowing us to keep operational costs low while maximising network reliability and speed,” said Jarryd Bekker, CEO at RIOT Network. “This combination of affordability and sustainable business growth is pivotal to our vision of expanding digital access in underserved communities. Our work in Olievenhoutbosch near Centurion demonstrates the power of reliable, affordable internet, creating new opportunities for economic and social engagement.”

“With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity,” said Rami Osman (https://apo-opa.co/4ghZBUn), Director for Business Development, MediaTek Middle East and Africa. “We look forward to supporting RIOT in building a future where high-quality internet is accessible and impactful for all.”

Distributed by APO Group on behalf of MediaTek Inc

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African Energy Chamber (AEC) Endorses Inaugural Congo Energy & Investment Forum, Catalyzing Growth in the Republic of Congo’s Energy Sector

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African Energy Chamber

The African Energy Chamber proudly supports the inaugural Congo Energy & Investment Forum, scheduled for March 25-26, 2025 in Brazzaville

BRAZZAVILLE, Republic of the Congo, November 21, 2024/APO Group/ — 

The African Energy Chamber (AEC), as the voice of Africa’s energy sector, proudly supports the inaugural Congo Energy & Investment Forum (CEIF), set to take place in Brazzaville on March 25-26, 2025. Unveiled during African Energy Week: Invest in African Energies in Cape Town by the Republic of Congo’s Ministry of Hydrocarbons, this milestone event signals the nation’s commitment to strengthening its role as a key energy player on the continent, while showcasing a range of investment opportunities. 

Under the leadership of Hydrocarbons Minister Bruno Jean-Richard Itoua, the Republic of Congo has emerged as sub-Saharan Africa’s fourth-largest oil producer, with anticipated production of 280,000 barrels per day (BPD) by the end of 2024 and ambitions to reach 500,000 BPD within three to five years. Building on this momentum, the CEIF will highlight innovative projects and foster strategic partnerships that enhance investment, drive economic growth and position the Congo as a leader in Africa’s energy expansion.

Meanwhile, Société Nationale des Pétroles du Congo (SNPC), led by CEO Maixent Raoul Ominga, is spearheading the Congo’s energy growth. SNPC holds a majority stake in the Mengo Kundji Bindi II permit, with 2.5 billion barrels of estimated oil potential. The company is developing the site through 13 wells, 3D seismic data acquisition, and the construction of six production platforms. 

We are honored to secure the Chamber’s endorsement for this pivotal forum

With the Chamber’s official support, the CEIF is set to attract government leaders, C-suite executives from major IOCs and energy experts, who will offer critical insights into Congo’s oil, gas and energy sector developments. The country is overhauling its gas sector to unlock 10 trillion cubic feet of resources through a comprehensive Gas Master Plan and new Gas Code that introduces favorable fiscal terms and enables small-scale project development, as well as large-scale, integrated gas megaprojects like Eni’s Congo LNG and Wing Wah’s Bango Kayo. 

“The Congo Energy & Investment Forum marks a major milestone for the country, amplifying its strategic energy initiatives and showing industry stakeholders that it is serious about advancing its energy sector. We look forward to supporting this forum, which promises to connect investors, drive impactful partnerships and elevate the Congo’s position within Africa’s energy sector,” says NJ Ayuk, Executive Chairman of the AEC.  

“We are honored to secure the Chamber’s endorsement for this pivotal forum, which, through its vast network and influence, will help attract key stakeholders and decision-makers to the event. Together, we aim to highlight the immense potential of the Congo’s energy sector, foster strategic partnerships and drive transformative investments that contribute to sustainable growth across the industry,” notes James Chester, CEO of Energy Capital & Power, organizers of the CEIF.   

This premier forum provides a unique platform for connecting local and international investors with high-impact opportunities across a diversified range of energy projects, paving the way for collaborations that drive growth and transformation. The AEC’s endorsement underscores its commitment to fostering strategic partnerships, sustainable investment and regional cooperation, aligning with its broader mission to make energy poverty history across the continent by 2030.  

As the energy industry continues to serve as a critical pillar of the Congolese economy and a catalyst for sustainable development, the AEC remains dedicated to supporting initiatives like CEIF that foster progress, investment and partnerships across the African energy landscape. 

For more information, please visit www.CongoEnergyInvestment.com

Distributed by APO Group on behalf of Energy Capital & Power.

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Any Successful African Energy Policy at Conference of the Parties (COP) or Anywhere Must Have Oil and Gas at its Core (By NJ Ayuk)

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Conference of the Parties

Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels

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JOHANNESBURG, South Africa, November 21, 2024/APO Group/ — 

By NJ Ayuk, Executive Chairman of the African Energy Chamber (www.EnergyChamber.org).

I believe the ultimate responsibility for getting there is ours and no one else’s. Yes, we need partners to walk alongside us, but the success of our energy movement rests on African shoulders.

To begin with, I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals.

This will be particularly important in COP29 in Baku. It is imperative that African leaders present a unified voice and strategy for African energy transitions. We must make Africa’s unique needs and circumstances clear and explain the critical role that oil and gas will play in helping Africa achieve net-zero emissions in coming decades.

I would encourage African leaders to talk about the need for financing, as well, to make it possible for us to adopt renewable energy sources and set up the necessary infrastructure. Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels.

Africa’s governments have a role to play in a successful African energy movement as well.

Because Africa’s energy industry still can benefit greatly from the presence of international oil companies, our government leaders need to approve contracts with oil and gas companies promptly instead of allowing red tape to delay projects after discoveries are made.

And, they need to offer the kinds of fiscal policies that allow oil companies to operate profitably in Africa. In turn, that will help those companies generate revenue, create jobs and business opportunities, and foster capacity building.

I also would encourage governments and civil societies to reward companies that exemplify positive behavior. Let’s incentivize the kind of activities we want, from creating good jobs and training opportunities to sharing knowledge.

I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals

And there’s more.

We in Africa must work together to create more opportunities for women to build careers in the oil and gas industry at all levels. Our energy industry can’t reach its potential to do good when half of our population is left out. Our progress on behalf of women has not been great—We need to do better, and we need to act quickly.

How the world can support

Now, I mean it when I say Africans are responsible for building the future they want. But, I would love to see Western governments, businesses, financial institutions, and organizations support our efforts.

How? They can avoid demonizing the oil and gas industry. We see it constantly, in the media, in policy and investment decisions, and in calls for Africa to leave our fossil fuels in the ground. Actions like these, even as Western leaders have pushed OPEC to produce oil, are not fair, and they’re not helpful.

I also would respectfully ask financial institutions to resume financing for African oil and gas projects and stop attempting to block projects like the East African Crude Oil pipeline or Mozambique’s LNG projects.

Please understand that with the war in Ukraine, the energy crisis in Europe, and the energy poverty facing our continent, our countries, like many others, are simply choosing the paths they believe are most likely to help their people.

You know, people for years have accused me of loving oil and gas companies more than Africa. The opposite is true. In my frequent travels around the continent, I’ve observed far too many young people with little in the way of opportunities.

I know our young people have aspirations for a better future. I know they have big dreams. And, I know that future is nearly within their grasp.

A thriving, strategically managed energy industry can make it possible for many of these young people, whether it leads to good jobs or it fosters the kind of economic growth that creates jobs in other fields. Even if we only get the lights on in their communities, we’ll be giving our young people hope and improving their chances of realizing their goals.

This is what drives me, the idea that with our ongoing efforts and determination, our young people can realize meaningful opportunities. I encourage each of you to work with us at the African Energy Chamber, in a spirit of cooperation and mutual respect. Together, we can build the kind of African energy movement that our continent, our communities, and our young people need and deserve.

Distributed by APO Group on behalf of African Energy Chamber.

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