By Moses Patience Chat
Following a successful Q1 2023 Outlook, which provided investors with the insights they needed to make informed decisions on the African energy market, the African Energy Chambers (AEC) has announced the launch of its Q2 report, The State of African Energy.
Serving as a blueprint for investing in the sector, the outlook offers stakeholders a comprehensive overview of both the global and African energy markets, covering key themes such as liquids supply, natural gas, upstream M&A activity and renewables. Get your copy today!
The State of African Energy Q2 Outlook provides valuable information, data and analysis on the current state and future prospects of the continent’s energy industry, supporting investment decision-making for financiers and energy firms as well as policy and strategy development for governments and policymakers. With the global oil and gas market experiencing significant volatility owing to global geopolitics, energy transition trends and supply chain challenges, the report offers a guide to both the global and African markets.
On the liquid supply side, the report forecasts global oil and condensate supply for the year to reach 82.7 million barrels per day (bpd), showing a year-on-year increase compared to last year. Brent prices will be impacted by production cuts in Saudi Arabia; however, prices are expected to remain largely unaffected in the long-term.
The report predicted that in Africa, supply is expected to show a marginal increase from 2022 levels, with output estimated at 6.66 million bpd and that African countries are expected to operate in compliance with production targets set by the Organization of Petroleum Exporting Countries (OPEC), with OPEC members Nigeria, Angola, Congo and Gabon actually producing 370,000 bpd less that OPEC quotas.
Also, the natural gas market is set to see an increase in global supply, with output measuring just short of 400 billion cubic feet per day (bcf/d) throughout the year, rising to 520 bcf/d by 2035. African output will be driven by Algeria, Nigeria, Libya and Egypt, with Nigeria and Algeria leading in Liquefied Natural Gas (LNG) output. Going forward, the report expected African gas output to be driven by currently undeveloped fields.
With legacy oil and gas fields in Africa nearing their end-of-life, the AEC Outlook provides a detailed overview of the continent’s upstream market as well as ongoing Mergers & Acquisitions (M&A) trends.
The report further states that African upstream capital expenditure will increase from previous estimates of $442 billion to $457 billion throughout the period 2023-2030 owing largely to higher brownfield spending and a marginal increase in approved projects. Sub-Saharan Africa is expected to lead greenfield spending. The continent’s upstream market has been a buzz of activity, with the report provides insights into recent discoveries and ongoing exploration campaigns.
The outlook notes that half a billion barrels of oil equivalent of recoverable resources have been identified this year alone with sizeable finds made in Namibia, Zimbabwe and Ivory Coast. It further noted that Upstream success has triggered a wave of M&A activity, with announced and completed transactions equating to $1.85 billion this year so far.
Africa’s energy growth transcends oil and gas, however. The continent’s renewable energy market is also experiencing a wave of activity with several high-capacity announcements made in Mauritania, Egypt, South Africa, Morocco, Namibia and more. Hydrogen capacity overtook solar as foreign investors turn their attention to promising green hydrogen markets across the continent. All this and more is further unpacked in the report, with the outlook representing the most comprehensive overview of the African energy sector for 2023.
According to the Executive Chairman of AEC, NJ Ayuk, AEC operates under a mandate of making energy poverty history by 2030, and aims to achieve this by facilitating new investment across Africa’s growing energy sector.
Ayuk added that the Q2 Outlook provides investors with the information they require while advising on market trends, promising industries and markets to watch while urging stakeholders in the energy industry to get a copy of the report.
“AEC’s State of African Energy Q2 Outlook is a must-read for companies looking at expanding their footprint across the African energy sector. The report provides critical information into market trends and potential growth areas while assesses the risks and investments in various segments of the African energy sector and its value chain.
“Whether stakeholders are looking at entering new markets, adopting specific technologies or understanding evolving market dynamics, the report is both relevant and timely and will support investment continent-wide,” he added.
