Capital for oil and gas projects in Africa at risk, as the continent continues to operate carbon inefficient production

By Jorge Joaquim

As the world is moving towards the energy transition in order to curb greenhouse gas emissions and meet the targets in the Paris agreement, the oil and gas industry is doing its share.

Meanwhile, Africa continues to operate carbon inefficient production, which further impacts its ability to raise capital for oil and gas projects, says African Energy Chamber (AEC) in its new report African Energy Outlook 2021.

While Africa benefits from conventional and easy to extract hydrocarbons, the inability to prevent gas flaring nevertheless catapults the continent to the overall least carbon efficient continent at about 31kg CO2 emitted per barrel of oil equivalent produced.

However, AEC understands that flaring and upstream emissions are not always easy to reduce, it nevertheless does represent an enormous opportunity for Africa to reduce its carbon emission per production unit and thereby increase the resources’ competitiveness in a world with an increasingly constrained carbon emission budget.

“In this context, political will and industry compliance will be key,” says AEC adding that initiatives such as the Nigerian Gas Flare Commercialization Program are extremely positive steps in that direction and must be encouraged and supported by all stakeholders.