Oil Market: Global demand to grow by 6 mb/d in 2021 ― OPEC

By Obas Esiedesa

The Organisation of Petroleum Exporting Countries (OPEC), African Refiners and Distributors Association (ARDA) and other stakeholders have expressed optimism that African countries would play leading role in the development of the energy sector in the future.

Speaking at a virtual conference as part of ARDA’s 15th anniversary, the stakeholders that included the African Energy Chamber (AEC) held that the existing energy gap on the continent places her on top of future energy demand.

Speakers at the event which was held ahead of the UN Climate Change Conference (COP26) next month, said there is no “one size fits all” solution and reducing emissions must have multiple paths.   

OPEC Secretary General, Mohammed Barkindo in his presentation, stated that while OPEC’s World Oil Outlook projects cumulative oil-related investments of $11.8 trillion till 2045 – $9.2 trillion for upstream, $1.5 trillion for downstream and $1.1 trillion for midstream – under-investment poses challenges that may worsen the global energy crisis. 

Barkindo warned that future energy and climate roadmaps must reflect the core principles of the United Nations Framework Convention on Climate Change, hinged on equity, historical responsibility and the principle of common but differentiated responsibilities and respective capabilities, a situation he described as critical to Africa.

According to him, Africa’s oil and gas sector has bright future with significant opportunities, adding that in 2019, the continent produced approximately 8.5 million barrel per day of oil, and currently has a proven oil reserves amounting to around 126 billion barrels as at the end of 2019.

For the Downstream, he stated that Africa’s local refining capacity is expected to increase, with a corresponding reduction in imports, and the continent’s long-term demand growth will lead to about 5 million barrels per day of throughput in 2045.

READ ALSO: Nigeria crude oil production averaged 1.451 mb/d in September – OPEC

Also speaking, Executive Secretary of ARDA, Anibor Kragha said that Africa’s energy transition plan must focus first on cleaner cooking and transport fuels in the near-term to reduce air pollution, before embarking on global Net Zero Emissions plans for which majority of the required technology is still in the development stage.

While stressing that Africa’s eventual energy transition roadmap must treat the transition plan for cleaner fuels, power and renewable energy differently, he added that refineries must be upgraded to produce cleaner fuels, while initiatives to replace biomass with LPG as a cleaner cooking fuel must be prioritized. 

On his part, Executive Chairman, African Energy Chamber, NJ Ayuk disclosed that Africa must not continue to depend on aid or foreign investors before solving the energy crisis. 

According to him, there was need for unity of purpose on development of an inclusive, common-sense agenda for energy transition on the continent, as well as necessary policies and creation of an enabling environment to encourage investments in energy transition and incentivize production of cheaper, cleaner fuels across Africa.

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