Energy Transition: Africa vows to continue petroleum production

Sopuruchi Onwuka

Governments of petroleum producing countries in Sub-Saharan Africa have resolved to press on with investments in petroleum exploration and production despite the prevailing global sentiment in favour of renewable energy.

The decision formed the major resolution of the International Ministerial Panel Session at the ongoing 2021 Nigerian International Petroleum Summit (NIPS) holding in Abuja, Nigeria.

Minister of State for Petroleum Resources, Timipre Sylva

Across the world, scientists and environmental activists campaign vigorously for energy demand switch from conventional fossil fuels to renewable electricity production and storage using solar and wind technologies. The new energy forms are meant to displace petroleum for transportation and power production.

Demand forecasts project drastic reduction in oil and gas demand by 2050 when key industrialized nations target near total exit from petroleum energy which they define as dirty. Other renewable energy sources vigorously pursued by the industrialized countries are considered cleaner, more sustainable and harmless to the environment.

European countries, The Oracle Today reports, have set 2040 deadline for total switch from combustion engine vehicles that run on fossil fuels to electric cars that would be propelled by batteries. They are also developing infrastructure to support mass deployment of electric powered transport systems across the continent.

Policies that support energy transition also target to displace use of gas with solar, wind, nuclear, hydro and geothermal for power generation.

The market outlook emerging from energy transition limits petroleum demand to mainly shipping, aviation, industrial and petrochemicals. The scenario extends the demand outlook for gas longer than other petroleum fuels. Even petroleum based lubricants are being challenged with syntactic options.

At the ongoing NIPS in Abuja, Nigeria, government delegates, and multilateral organizations that service regional cooperation and economic interests, agree that whereas energy transition threatens visible commercial and economic risk for investors and resource owners the continent must continue use of petroleum fuels in tackling prevailing energy deficit and associated economic risks that still stare developing nations in the face.

Ministers of petroleum from Nigeria, Equatorial Guinea, Ghana, Congo, Gabon and Mali agreed with the Organization of Petroleum Exporting Countries (OPEC) and the African Petroleum Producers Organization (APPO) time has come for petroleum producers in the continent to take responsibility for the fate of the industry.

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In setting the tone for conversations at the first International Panel Session at the event, the Executive Secretary of APPO, Dr Omar Farouk Ibrahim, pointing at rising concerns in Africa over the global campaign for energy transition. And the Minister of State for Petroleum, Chief Timipre Sylva, agree with Dr Ibrahim that energy transition would not happen overnight, arguing that no technology is currently on ground to challenge the flexibility, availability and applicability of petroleum as versatile energy factor.

Chief Sylva projected that hydrocarbon resources would still fill over 80 percent of global energy demand and feedstock to the petrochemical and manufacturing industry till 2040.

Dr Farouk who led the charge at the panel pointed out that APPO had envisaged the economic challenges of energy transition for African countries, pointing at narrowing project funding from international finance institutions, migration of technologies from petroleum to renewable and gaps in human resource capacity for continued development of hydrocarbon energy.

He made it clear that Africa, with over 100 billion barrels of hydrocarbon liquids still untapped, has relied on external resources for industry funding, technology and skilled workforce. He made it clear that the continent would suffer resource value erosion if urgent measures were not taken to develop the requisite capabilities to assume control of industry operations.

He said the prevailing risks informed the decision of APPO to transform its Fund for Technical Cooperation to African Energy Investment Corporation in order to broaden the channels of funding inflow from private sector.

On plugging industry capacity gaps in the continent, Dr Ibrahim declared that APPO is driving the evolution of the Africa Local Content initiative as platform for member countries to pursue common objectives.

He called for cooperation among energy producers in the continent in developing transnational infrastructure that would deepen local and regional markets for resource producers in the continent.

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In pledging the support of the Organization of Petroleum Exporting Countries (OPEC) to the African producers, the Secretary General, Dr Mohammed Barkindo, pointed out that demand outlook by the producers’ group shows that rising global population and projected growth in the global economy would continue to grow demand above the capacity of renewable energy industry.

He made it clear that oil and gas would continue to dominate the global energy demand mix by about 50 percent in the next 30 years.

He acknowledged the harsh impact of climate change on the African continent, pointing out that the situation is exacerbated by acute energy poverty in Sub-Saharan Africa where, according to him, 45 percent of the population has no access to electricity and 900 million people have no access to clean cooking gas.

He said Africa currently need all available energy to meet its basic demands, warning that the population of the continent must not be left behind to climate change and energy poverty in perpetuity.

The energy ministers deliberated on the agenda set by both APPO and OPEC, agreeing that the needs and challenges of the continent are peculiar and must be addressed differently and separately from the trends in developed economies.

Chief Sylva who pointed at the huge investments in development of cleaner gas resources in the continent questioned the templates in determining which fuel in the energy mix is cleaner than the other.

He pointed out that hazards and risks associated with some aspects of renewable energy-including nuclear power and fuel ethanol production-pose greater risks to the environment than gas.

He noted that Africa which is currently facing the dilemma of energy transition was never involved in discussions that defined which energy option as clean or dirty.

Minister of Mines and Hydrocarbon, Equatorial Guinea, Mr Gabriel Mbaga Obiang Lima, pointed out that energy transition has placed fossil fuel under attack from all corners at a time Africa still needed over 20 years to develop energy transition infrastructure.

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He called on the resource producing countries of the continent to position for rapid economic recovery by next year, adding that national oil companies must at time seize control of industry operations by mustering the capacity for funding and technological innovations. He urged countries to seek petroleum project funding from unconventional sources other than IFIs.

He said gas has become critical to the future of the petroleum industry and asked countries to invest massively in harnessing, utilizing and monetizing the resource.

Gabonese Minister of Hydrocarbons, Mr Vincent de Paul Massassa, declared that the country has started positioning gas as critical asset in the emerging energy scenario, adding that part of the programme was to deepen domestic utilization in order to spur economic growth.

Director of Petroleum in the Ghanaian Ministry of Energy, Mr Benjamin Kwame Asante, told the panel that the country was taking all the economic opportunities in its hydrocarbon resources in the prevailing energy transition window.

He said the country is building a petroleum hub that would assist use of gas for industrial application and optimize the resource in driving economic growth. Part of the plan, according to him, is to fire all existing power generation plants with gas and also encourage energy efficiency in power generation.

The Oracle Today reports that the International Ministerial Panel Session of NIPS 2021 ended with a strong resolution on the need for Africa to deploy its competitive resource advantage in driving economic growth, fighting energy poverty and arresting climate change impact through displacement of dirty fuels with cleaner burning options.

In achieving the objectives, the ministers agreed to continue production of hydrocarbon energy by developing the requisite operating capacity for eventual control of the industry if and when energy transition turns full cycle.

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