By Herman Opondo
In a few months, world leaders will be meeting in Baku in Azerbaijan for the the29th Conference of Parties to the UN Framework Convention on Climate Change and as usual, we expect the noise around oil and petroleum to ‘phase down’ and ‘phase out’ due to their potential to greenhouse gas.
At COP28 in Dubai last year, participants produced a deal to transition away from fossil fuel consumption in energy systems.
This followed from a strong debate before the climate talks over whether to ‘phase out’ or ‘phase down’ fossil fuels. However, the COP agreement did not use either of these terms, strongly favored by those who look at issues from the climate justice lens.
While a section of the CSOs, mostly from the climate justice side continue with their demand for phase-out, the pragmatic majority however see this as ill-informed. The oil and gas industry is firmly part of Africa’s future well-being.
As the world shifts towards renewable energy sources, Africa must support the exploration and development of oil and gas, resources that so abundantly occur on the continent. This is for several reasons: economic growth, energy security, and the opportunity for a balanced energy transition.
Oil and gas exploration and production are pivotal to the economic growth of many African nations. The industry provides significant revenue through taxes, royalties, and export earnings, which can be reinvested in critical areas such as infrastructure, education, and healthcare.
Countries like Nigeria, Angola, South Sudan Gabon, and Algeria rely heavily on oil exports, which contribute substantially to their GDP. Others like Kenya, Uganda, Somalia, Tanzania, Mozambique, Malawi, and Cote d’Ivoire have the undoubted capacity to produce the commodities but for some unknown reason are reluctant to begin commercial exploitation.
By continuing to develop these resources, African nations can ensure steady economic growth and improved living standards for their populations.
Moreover, the oil and gas sector is a major source of employment, offering jobs directly in exploration and production, and indirectly through related industries such as transportation, refining, and petrochemicals. According to Statista Research Department report of February 2024, the majority of employees in the global oil and gas industry are working specifically in the oil sector. Around 7.6 million people were employed across the oil supply chain worldwide in 2022.
This is out of a total of more than 11.5 million jobs recorded for the oil and natural gas industry overall. However, only about 1 percent of Africans work directly in the sector. The ILO report of 2015, this is far less than the potential. Developing this sector can reduce unemployment rates and contribute to poverty alleviation across the continent.
Energy security is a pressing concern for many African nations. Despite the continent’s vast natural resources, millions of people still lack access to reliable and affordable energy. Continued investment in oil and gas exploration can help bridge this gap by providing a stable and secure energy supply.
This is particularly important in the short to medium term, as renewable energy infrastructure is still being developed.
On the positive side however, the establishment of the African Energy Bank (AEB) by the African Petroleum Producers Organization (APPO) and the African Export-Import Bank (Afreximbank) potentially provide much-needed financing for oil and gas projects.
This initiative will ensure that Africa’s energy needs are met while supporting the transition to cleaner energy sources. The AEB will help fund projects that might otherwise struggle to secure financing due to the global shift towards renewable energy investments.
The global energy transition moves towards renewable sources is essential to address climate change. However, it is equally important to recognize the unique challenges faced by African nations in this transition.
Unlike developed countries, many African nations do not have the luxury of transitioning to renewable energy without significant economic and social disruptions. Thus, a balanced approach that includes continued oil and gas exploration alongside the development of renewable energy sources is necessary.
The APPO’s strategy showcase initiatives that will ensure that the oil and gas industry operates more sustainably while contributing to the continent’s broader energy transition goals. By focusing on reducing environmental impacts, Africa can develop its oil and gas resources responsibly.
What is not in doubt is that the oil and gas industry in Africa has the potential to drive technological advancements and infrastructural development. Investments in this sector can lead to the creation of state-of-the-art facilities and the adoption of cutting-edge technologies.
For instance, the Greater Tortue Ahmeyim project in Senegal and Mauritania and the Mozambique LNG project are examples of how modern technology can be utilized to extract resources efficiently and sustainably.
However, what is not clear is why, those who have been in climate change negotiations have not hammered the need for technology and innovation transfer into the sector.
This is shy such civil society groups as the Africa Energy Security Coalition, the African Energy Chamber (AEC) and others on the continent should seek to collaborate with the APPO to enhance local content development and encourage technology-focused investments. This partnerships will stimulate innovation and capacity building within the continent, ensuring that African nations can harness their resources effectively.
The exploration and development of oil and gas in Africa remain crucial for economic growth, energy security, and a balanced energy transition.
By supporting the oil and gas sector, African nations can leverage their natural resources to achieve sustainable development, all lagging behind schedule.
The writer is the Continental Coorinator, African Energy Security Coalition