There are strong bonds between Africa and Opec, ref lecting the critical role the continent will play in the future of the energy industry, according to Mohammad Sanusi Barkindo, Opec Secretary General. “African countries have historically assumed strong, proactive leadership roles in Opec. Angola currently holds the presidency of the Opec Conference and will be succeeded by Congo in 2022. Recent years have seen an expansion of the African presence in our organisation,” he said.“Congo became a member country in 2018, Equatorial Guinea joined in 2017, and Gabon rejoined in 2016. This consolidates the incredibly positive, constructive and fruitful roles played by Libya since it joined our organisation in 1962, Algeria since 1969, Nigeria since 1971 and Angola since 2006.”Delivering a keynote address at Africa Energy Week recently, Barkindo said he foresaw a bright future for Africa's oil industry, with significant opportunities for growth.“The continent is home to five of the top 30 oil-producing countries in the world and several top gas-producing nations. The world will continue to rely on Africa’s precious resources in the long term in order to meet the rapidly rising global demand for oil and gas.“In 2019, before the Covid-19 pandemic broke out, Africa produced approximately 8.5 million barrels of oil per day, which is around 9% of world output. The continent’s proven oil reserves amounted to around 126 billion barrels at the end of 2019. Of this, Nigeria held the majority with an estimated 36.9 billion barrels, or 29%, of the continent’s total reserves.” In terms of the downstream sector, last year’s oil demand shock caused by the Covid-19 pandemic resulted in numerous refinery closures worldwide, said Barkindo, indicating additional closures were expected in the coming years.“Looking ahead, from 2021 to 2026, we expect to see around 6.9 million barrels of oil per day of new refining capacity come online, mostly in the Middle East, Asia-Pacific and Africa. Africa’s potential refining capacity is expected to start increasing in 2022 at just below 0.4 million barrels per day, before reaching just above 1 million barrels per day in 2026. Many of these projects will involve petrochemical integration.” Looking at the longer term, Barkindo said Opec forecast 14 million barrels per day of capacity additions, mostly in developing countries. In Africa, long-term demand growth will lead to an increase in refinery throughputs of almost 5 million barrels per day in 2045, up from 2.4 million barrels per day in 2019.“Another important downstream factor has to do with global refinery utilisation rates, which are forecast at a rate of 81% in 2024 and slightly lower by 2026, yet still higher when compared to 2019 levels,” said Barkindo. “These rates are forecast in consideration of recovering demand, in addition to the realisation of numerous closures triggered by the Covid-19 pandemic. In the longer term, utilisation rates are expected to drop to approximately 76% in 2045 as more capacity comes online and demand declines in developed regions. This, of course, will result in additional closures in order to maintain rates at sustainable levels.”He said these overall positive developments in the African downstream would help increase local refined product output while reducing product imports from other regions.“In terms of downstream investment, we estimate a total of roughly $1.5 trillion will be spent during the period 2021-2045. $450 billion of this will be invested in new refinery projects and expansions of existing units. Most of these projects will be located in developing countries, including Africa.”Barkindo said the importance of creating an investment-enabling environment was important. “Cumulative oil-related investment requirements amount to $11.8 trillion in the 2021-2045 period. Of this, 80%, or $9.2 trillion is in the upstream, with another $1.5 trillion and $1.1 trillion needed in the downstream and midstream, respectively. Creating the stability in the oil market necessary to attract the required levels of investment has been one of the primary motivations behind Opec’s collaborative efforts with several non-Opec countries.”
