Renewed Investment in African Oil and Gas: A Call from the African Energy Chamber

Context of the G20 Summit in Johannesburg

As global leaders gather for the G20 Summit in Johannesburg, the African Energy Chamber (AEC) has voiced a compelling argument for the urgent need for renewed global investment in Africa’s oil and gas sectors. This appeal highlights the significance of fossil fuels in driving industrialization and improving energy access across the continent. With millions of Africans still without electricity, the AEC emphasizes that strategic investment is vital—not just for energy security but also for alleviating poverty and fostering regional prosperity.

The Potential of Africa’s Energy Resources

Africa is rich in energy resources, particularly oil and gas. The AEC projects that by 2026, African oil and gas production could reach approximately 11.4 million barrels per day (bpd), with a growth trajectory towards 13.6 million bpd by 2030. This increase is driven by significant exploration efforts in frontier basins in countries like Mozambique, Angola, and Nigeria, with the continent expected to channel around $41 billion in upstream capital expenditures by 2026.

Licensing rounds and new exploration initiatives are underway in both established markets—like Nigeria and Libya—and emerging regions, such as Namibia and Sierra Leone. These opportunities are enticing explorers and investors, illustrating Africa’s untapped potential on the global stage.

Africa’s Critical Role in Global Gas Markets

Africa’s proven gas reserves exceed 620 trillion cubic feet, positioning the continent as a crucial supplier not only for international markets but also for its domestic energy needs. Countries like Mozambique are at the forefront with major liquefied natural gas (LNG) projects, while Senegal is advancing significant initiatives as well. The focus on gas is seen as vital for both economic development and energy accessibility, particularly for the estimated 600 million Africans currently living without electricity.

Political Commitment and Industrial Growth

In his remarks at the G20 Africa Energy Investment Forum, South Africa’s Minister of Mineral and Petroleum Resources, Gwede Mantashe, encapsulated the urgency of the moment: “Drill, baby, drill.” His call reflects a broader recognition that unlocking fossil fuel potential is essential for the GDP growth and overall industrial development of South Africa. This sentiment reveals a shared understanding among African leaders that energy access, job creation, and economic growth go hand in hand.

Challenges to Investment: Global Financing Frameworks

Despite the continent’s enormous potential, restrictive global financing frameworks pose significant challenges to investment. The World Bank’s fossil-fuel lending ban, along with conservative policies from many Western banks, risks sidelining critical projects. The AEC asserts that restoring capital flow to Africa is a once-in-a-lifetime opportunity, enabling the continent to harness its natural resources to combat energy poverty and foster industrial development.

As exploration remains a cornerstone of Africa’s energy future, the AEC calls on the G20 to recalibrate its financing strategies to prioritize exploration rather than penalize it. The AEC argues that gas should not merely be considered a transitional fuel; instead, it is pivotal for powering various sectors and laying the groundwork for sustainable economic growth.

U.S. Investment as an Example

The African Energy Chamber commends the United States for its $4.5 billion financing commitment to Mozambique’s LNG project. This investment illustrates that G20 nations can invest in African fossil fuels responsibly and profitably, setting a precedent for future endeavors. However, the AEC emphasizes that more substantial financing at this scale is essential to realize Africa’s complete energy potential.

Need for a Reset in Energy Projections

In light of Africa’s resources, the AEC urges the International Energy Agency (IEA) to revise its projections, which often underestimate the continent’s hydrocarbons and ignore the vital role gas can play across various dimensions, including job creation and energy access. Ending the stigmatization of fossil fuels is crucial for aligning funding and genuine respect for Africa’s energy priorities.

Comprehensive Energy Solutions for Africa

As the conversation around energy access expands, the AEC applauds initiatives promoting liquefied petroleum gas (LPG) and clean cooking solutions. These are seen as immediate, practical ways to improve energy access for millions of households. However, the AEC stresses the necessity for a diversified energy mix that includes LPG, gas-to-power initiatives, and large-scale natural gas development to foster sustainable economic growth and industrialization.

Regulatory Reforms and Investment Environment

African governments, from Angola to Mozambique, are actively implementing reforms to create a favorable investment landscape. This includes stable fiscal terms and efficient regulations aimed at enhancing investment attractiveness. The continent stands ready to support strategic partnerships that enable long-term growth, provided that the capital, technology, and supportive global financial structures are in place.

A Call for a Just Energy Transition

In the face of global calls to phase out fossil fuels, the African Energy Chamber firmly opposes this trend, arguing it jeopardizes Africa’s prosperity and keeps millions locked in energy poverty. Instead, the AEC advocates for a just energy future powered by the continent’s abundant resources. The AEC calls on G20 nations to prioritize fossil-fuel development in their Africa policies, aiming to dismantle ideological barriers and promote robust financing for exploration and infrastructure investment.

Through this detailed perspective, the African Energy Chamber communicates a clear message: Africa’s energy resources represent not just an opportunity for the continent, but a crucial piece in the global energy puzzle. With the backing of global leaders, investment in Africa’s oil and gas sectors can drive meaningful change.