Understanding was growing that Africa could not go without developing its oil and gas resources, highlighted Africa Finance Corporation senior VP: financial advisory Mohammed Abdul-Razaq. He was participating in a panel discussion at the Africa Oil Week conference, at the Cape Town International Convention Centre, on Thursday.
He pointed out that many African countries were dependent on their extractive sectors for socioeconomic development and to provide tax revenues. It was necessary, regarding the development of African hydrocarbon resources, to be practical and pragmatic.
However, the environment could not be disregarded. Climate change could not be ignored. Africa was already suffering from climate change. But the continent also needed to develop its oil and gas projects, and gas was also used to produce fertilizer, which Africa also needed.
An oil and gas industry, if properly managed, could transform a country’s socioeconomic development greatly for the better, emphasized ICA-Finance senior adviser Heine Melkevik, speaking on the same panel. (ICA stood for Immediate Climate Action.) He cited the case of his native Norway, which in 1950 had been a poor country; successful responsible exploitation of its oil and gas reserves had made it a rich country.
“I think that Africa will be very gas heavy [energy-wise] over the next ten to 20 years,” he forecast. “There’s going to be an enormous demand for power.” He noted that Nigeria was projected to become the third most populous country in the world “in the next generation”.
It was a “massive mistake” to talk about the energy transition in the singular, affirmed another panelist, Ernst & Young EMEIA energy and resources partner Jon Clark. It wasn’t a singular event; it involved multiple processes, because different countries had different starting points. As an example, he contrasted Norway and South Africa. Norway gained most of its electricity from hydropower. South Africa used coal to generate most of its electricity. So, using electricity to power offshore gas platforms would make a lot of sense for Norway, but absolutely no sense for South Africa.
“There just needs to be a balance between access and sustainability,” for future African oil and gas projects, stated Abdul-Razaq.