Logistics companies involved in the oil and gas sector will be watching developments in Africa with keen interest.While there is consensus about short-term opportunities, particularly in Namibia and Mozambique, the opinion on long-term prospects is divided.NJ Ayuk, executive chair of the African Energy Chamber (AEC), believes demand will not dry up soon.“Despite the call heard ’round the world commanding the global business community to divest from fossil fuels and shrink their carbon footprints in the name of net-zero, international oil companies recognise Africa as their next frontier,” he said.Over the past year half a billion barrels of oil equivalent (bboe) in recoverable oil and gas reserves were found around the continent, he states.Acknowledging that “the global transition to carbon-free energy is inevitable,” Ayuk says the AEC’s stance is that “if we can secure foreign investment in our oil industry today, Africa will develop the funding to back its own transition tomorrow”.Less optimistic is a report by the Green Connection which found that “there is scant evidence that the exploitation of oil and gas resources (in Africa) naturally leads to improvements in the lives of those living and working in oil and gas-rich areas.”Divestment by oil majors has seen Africa’s share of global oil output decline from 12.3% in 2010 to 8.1% in 2021, according to BP’s Statistical Review of World Energy.Kofi Mbuk, senior clean tech analyst at the Carbon Tracker think tank, warns companies investing in fossil fuels in Africa could be left with stranded assets. Africa’s vision to expand its natural gas production will leave it financially stranded, he warns in a 2023 report. He is supported by a McKinsey study which predicts that global oil demand could peak by as soon as 2024, and gas by 2030.The replacement of approximately 60% of Africa’s current oil production could become uncompetitive by 2040, it adds.For now, the world still needs hydrocarbons. Preferred investment areas should be those which already have logistics infrastructure in place, says George Maxwell, CEO of US-headquartered Vaalco Energy.He is quoted in African Business as stating that “to be able to tie back and utilise key infrastructure such as pipeline and LNG facilities is becoming increasingly attractive in the sector.“Being able to bring production into existing systems provides for faster cycle times and potentially lower capital outlays.”
