The continent offers significant opportunities for UK-based investors and service providers – from upstream to midstream and infrastructure development.
The African Energy Chamber (AEC) has called for pragmatic and common-sense approaches to Africa’s oil and gas development at the Wider African Energy Summit in Aberdeen on Wednesday. Pointing to Africa’s need to alleviate energy poverty, NJ Ayuk, Executive Chairman of the AEC highlighted the need to make Africa a home for international companies, underscoring the abundant opportunities for UK-based operators and service providers across the continent’ evolving hydrocarbon supply chain.
“We believe in affordable and abundant energy. There are so many people in Africa that don’t have economic opportunities. Our job is to change that and to bring pragmatic, common-sense approaches to how we address the twin demons of climate change and energy poverty. They are two sides of the same coin,” he shared.
With over 125 billion barrels of proven oil reserves and 620 trillion cubic feet of natural gas, Africa’s hydrocarbon industry has the potential to unlock long-term economic benefits across its economies. Efforts are underway by African governments to monetize these resources. However, challenges remain, highlighting the need for a coordinated approach by African states to engage investors and drive projects forward.
“The African advantage comes down to our population and an industry with a hunger for technology. We are going to see opportunities in new provinces, such as the MSGBC basin in Senegal and Mauritania as well as basins in Mozambique, Namibia and South Africa. We are seeing countries becoming more open and friendly, without focusing on resource nationalism. This is where the advantages are. We have seen UK companies active in these markets, shooting seismic and opening doors. But we need to explore more,” Ayuk explained.
To incentivize foreign investment across the African market, Ayuk emphasized the need to address above-ground risks. Notably, through improved fiscals and realigned regulatory structures, he explained that African countries can increase their competitiveness for foreign capital at a time when expenditure is becomingly increasingly restricted.
“Most African countries have started to realize that the more we address above-ground issues, the most investable we become. We are not competing for capital between Mozambique and Zimbabwe, we are competing with Guyana and Suriname. We have seen countries like Angola turning above-ground issues around, providing better fiscals and attracting investment. The result? We have seen Shell go back and investing,” Ayuk said.
Ayuk also highlighted opportunities for UK service companies across the continent’s midstream sector. He explained that “our infrastructure deficit is a big problem. Nigeria, for example, has not been able to power the region with gas – and this is not because of lack of resources. How can we move resources across the continent? We need to look at baseload energy and natural gas. We don’t have LNG receiving terminals and need to look at this.”
Strengthened partnerships with companies that have seen success in the North Sea could support these efforts, creating a more affordable, diverse and connected energy system in Africa. Closing the discussion, Ayuk said: “Choose Africa. Whatever you do in Africa, it will be worth it – both in a financial sense and in the ability to change lives.”