African Energy Chamber has released its Energy Outlook for 2021, assessing Africa’s competitiveness compared with other frontiers, while highlighting the countless opportunities that continue to emerge and exist across the entire energy value chain.
The report explored the forces shaping up continent’s energy market after the historic shocks of 2020, and analysed the upcoming recovery on the back of the global energy transition and persisting market uncertainties.
After a year of historic crisis, the outlook offered guidance and solutions for African energy stakeholders to navigate troubled waters and support a strong recovery in 2021 and beyond.
The report provided detailed information in areas of critical importance, and included sections examining jobs and employment, cash-flow and profit forecasts, the expenditure and investment outlook, carbon emissions, oil and gas market projections, and regional production outlook.
Pressing issues including notably the Organisation of Petroleum Exporting Countries (OPEC)’s production cuts, ongoing regulatory reforms, the impact of the Coronavirus (COVID-19) by region and country, and offshore drilling demand across multiple continental shelves are analysed in detail.
‘’It goes without saying that Africa has witnessed its fair share of difficult times this year.
“Even though oil and gas activities have taken a hit, optimism surrounding African projects, fiscal regime and investments still exist but requires all of us as stakeholders to do more.
“There has always been opportunity in drastic and unprecedented times, which gives us a lot to look forward to,” said the Executive Chairman of the African Energy Chamber, Nj Ayuk.
The outlook was the result of strong regional and international cooperation between actors of government, and public and private sector stakeholders across sub-Saharan Africa.
It gathered the latest available data on sub-Saharan Africa’s hydrocarbons markets, and benefits from the insights of key local, regional and international companies, experts and economists, making it the most comprehensive resource to date on the future of African energy markets.
‘’The report highlights the expected outcome of post COVID-19 mitigation strategies to the African energy sector in 2021 and beyond.
“It also assesses Africa’s competitiveness compared with other frontiers, and highlights the countless opportunities that continue to emerge and exist across our entire energy value chain.
“We look forward to this report serving as a basis for sound decisions towards a thriving energy industry in Africa,’’ said Senior Vice President at the African Energy Chamber, Verner Ayukegba.
African Energy Chamber issued rallying call to all industry stakeholders to work together on a reform agenda to keep African natural resources competitive and create jobs; short-term outlook for African oil and gas remains marked by COVID-19 and uncertain market conditions expected to result in a $30 billion cut in Capex spending (2020-2021); South Western Africa expected to emerge as the next energy frontier on the continent on the back of high-impact wells coming up in 2021 and 2022; the continent’s production of oil and gas is expected to increase in 2021 as OPEC’s sanctions ease and on the back of increase oil output from Libya and increased gas production from Algeria and Egypt.
The pandemic notably came at a particularly difficult moment in Africa, exacerbating already challenging market conditions on the back of a competitive American shale industry, the delaying of major projects due to regulatory uncertainty, and increasing global attention to decarbonisation.
African Energy Chamber notably expected a CAPEX spending cut of $30 billion over the 2020-2021 period, and has identified a further $80 billion of investment whose sanctioning would depend on improving market conditions, along with bold policy and fiscal reforms from African regulators.