Kicking off the Invest in African Energy Reception in London on Thursday, independent energy research firm Rystad Energy presented its Africa’s Energy Sector Outlook 2023, detailing the current state of the industry and forecast supply and demand dynamics. Organized by the African Energy Chamber (AEC) – the voice of Africa’s energy sector – the reception served to explore new avenues for financing large-scale energy projects on the continent, enhance trade and investment between Africa and Europe, and attract new players to Africa’s most promising oil, gas and power markets to achieve continent-wide energy security.
“We could not have chosen a better city to start our African energy journey. London, we thank you. At the core of what we do is to make energy poverty history,” opened NJ Ayuk, Executive Chairman of the AEC. “Everybody showed up. That tells you that it’s time for Africa and it’s time for us to stop apologizing for producing energy for the world.”
According to a presentation from Rystad Energy – “Energy Addition for Africa” – Sub-Saharan Africa holds 140 billion barrels of oil equivalent, of which only one-third is developed and two-thirds of undeveloped resources are natural gas. New investment in oil and gas exploration and production is necessary, not only to maximize recent discoveries along Africa’s 40,000-km coastline, but also to meet rising energy demand globally and stabilize price hikes. “For 10 years, production has been lagging, which created the super cycle of oil prices,” noted Per Magnus Nysveen, Chief Analyst for Rystad Energy.
Accordingly, Africa’s greenfield upstream spending is expected to boom during the coming decade, reaching $37 billion by 2025 and $50 billion by 2030. The continent continues to require new hydrocarbon exploration and drilling activities, even in the context of the energy transition and simultaneous investments in solar, wind, hydropower and natural gas. “We need as much as 65 million barrels by 2030 from wells that have not been drilled yet,” Nysveen added.
In terms of power generation, Rystad Energy states that African countries must harness their renewable resources in conjunction with natural gas – which “must double” – in order to meet rising electricity demand. South Africa’s Just Energy Transition Investment Plan, which has already secured $8.5 billion for the period 2023-2027, exemplifies this strategy, with the country depending on natural gas to decarbonize its current power mix.