Africa and its energy resources are poised to play a central role in promoting global energy security, provided that the right investments turn this potential into reality.
Home to over 125 billion barrels of proven crude oil reserves and 620 trillion cubic feet of gas, Africa's wealth of resources lies at the intersection of global energy security. Not only a solution for advancing industrialisation and electrification across the continent, investing in African energy will stabilise global markets, strengthening resilience in the face of global challenges.
The opening panel of the African Energy Week (AEW) 2023 conference in Cape Town - organised by the African Energy Chamber - drew attention to the vital role that Africa's energy resources will play in addressing global security issues. Speakers explored the continent's potential in this area, while providing ideas and recommendations for accelerating development.
Ahead of the round table, Calib Cassim, acting CEO of South Africa's state-owned utility Eskom, gave an overview of the utility's efforts to ensure energy security. He said: "We are looking forward to using transitional technologies such as gas and renewables. There will also be a share of nuclear power in the energy mix. Eskom can't do it ourselves: we have to work with the government and the private sector.
Recent geopolitical challenges have highlighted the need to diversify global supply chains, and Africa has become the market of choice in these efforts. The continent offers not only a range of established energy markets with proven sectors, but also a wealth of untapped opportunities, opening up lucrative prospects for E&P players and capital providers.
António Saide, Mozambique's Deputy Minister of Mineral Resources and Energy, said: "We have the solution to the world's energy security challenges. We have the necessary energy resources, from coal to renewable energies. We have agricultural land and can produce biofuels. We can supply as much as the world needs.
While African energy is supposed to provide the security that global markets desperately need, the continent's own energy needs take precedence. More than 600 million people have no access to electricity, a figure that is set to rise unless adequate investment is made across the entire energy value chain.
According to Dr Matthew Opoku Prempeh, Ghana's Minister of Energy, "We need energy security, we need industrialisation, and the opportunities offered by African countries with their oil and gas resources cannot be ignored. We want to develop a mix of energy sources to make Africa self-sufficient in terms of energy. For these reasons, Africa cannot afford to stop drilling for and using gas.
Osvaldo Inácio, a member of Sonangol's Board of Directors, echoed these remarks, saying that "half of the population increase will be in Africa. We will need to guarantee energy security to meet this demand. In doing so, we must also ensure that we decarbonise our operations by deploying technology... this requires several solutions.
Speakers highlighted the need to move to cleaner energy sources, with partners such as Saudi Arabia playing a key role in facilitating opportunities in this area.
Dr Fuad Mosa, Deputy Minister of Localization, Local Content and Risk Management, Ministry of Energy, Saudi Arabia, said: "We are trying to help not only Africa, but also the youth of the future. Yes, we need the energy transition, but we have to understand that the energy transition will be different from place to place.
Following a wave of regulatory reforms and political adjustments, the investment climate in Africa has never been so attractive. The continent has become a business opportunity not to be missed and AEW2023 should facilitate a wave of new transactions.
Countries like South Sudan are very attractive. Puot Kang Chol, Minister of Petroleum, explained further, stating that "South Sudan has a bankable alternative pipeline and scalable refining projects. Investing in fossil fuels, particularly in South Sudan, is not a waste. You will not be there to support us; we will do business together.
Neighbouring Uganda has made great strides towards developing an attractive investment environment. According to Ruth Nankabirwa, Minister of Energy and Mining Development, "you need to create an investment-friendly environment to encourage the private sector to come and develop. We also need to work on regional cooperation. Uganda is currently developing the East African crude oil pipeline and the East African power pool. This will enable us to share resources.