Tuesday, 19th October 2021
To guardian.ng
Breaking News:

‘Africa’s petroleum downstream, others require $1.5 trillion investment’

By Kingsley Jeremiah, Abuja
13 October 2021   |   3:03 am
The Organisation of Oil Exporting Countries (OPEC) has stated that about $1.5 trillion worth of investment would be required in the downstream segment of the petroleum industry between now and 2045.

The Organisation of Oil Exporting Countries (OPEC) has stated that about $1.5 trillion worth of investment would be required in the downstream segment of the petroleum industry between now and 2045.

Secretary-General of OPEC, Mohammed Sanusi Barkindo disclosed that over $400 billion of this investment would go into new refinery projects and expansions of existing units, adding that most of the projects would be located in developing countries, including Africa.

These comments came as OPEC, African Refiners and Distributors Association (ARDA), African Energy Chamber (AEC) and others insisted that urgent actions were required from stakeholders in the energy industry across the continent to ensure the development of a unique, inclusive energy transition plan.

The experts, including Minister of Mines, Petroleum and Energy of the Republic of Cote D’Ivoire, Thomas Camara and other key speakers from AEC, IPIECA, UNEP, IEA and S&P Global Platts at ARDA’s 15th virtual conference stated that there is no “one size fits all” solution to the issue of the energy transition.

To them, reducing emissions must have multiple paths. They stated that Africa must not be rushed to join the global push away from fossil fuels.

The experts also noted that the continent and its key stakeholders must work together to address its energy challenges and design a personalised roadmap on the backdrop of growing population.

Coming ahead of the UN Climate Change Conference (COP26) next month, where global leaders will take critical decisions impacting the future of energy transition, the experts called on the need to address inherent bottlenecks, while focusing on ways to make fossil fuel cleaner for transportation, cooking, power and industrial activities.

Barkindo, who spoke at the event, 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.

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

Barkindo also said 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 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.

Camara shared the current national initiatives on energy transition, which spanned refinery upgrades to produce cleaner fuels (50 ppm Sulphur in line with new ECOWAS standards) and lower the facilities’ Energy Intensity Index, a dedicated reform of the Ivorian LPG market to make butane more affordable.

Executive Secretary of ARDA, Anibor Kragha said that Africa’s energy transition plan(s) 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 the majority of the required technology is still in the development stage.

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

In the power sector, he called on policymakers on the continent to focus on natural gas as a cleaner primary energy source, while improving power transmission infrastructure and creating support for fulfilling domestic and industry power demand before focusing on electric vehicles (EVs).

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.

For emerging oil-producing countries in Africa, on the continent, Ayuk believes that there is a need to keep tapping existing resources and using those resources to address challenges on the continent before joining the broader global energy transition push.