African oil-producing nations have been urged to look within the continent to raise the necessary capital to continue to finance the oil and gas industry.
This was contained in a communiqué issued by the African Petroleum Producers Organisation at the end of its 41st Ordinary Session of the Council of Ministers held in Algiers, Algeria.
The call is on the back of the global push for an energy transition from fossil fuel to renewable energy sources which has negatively affected investments in new exploration activities.
In October 2020, the United Nations Secretary, Antonio Guterres, at a virtual meeting of a coalition of finance ministers and economic policymakers to ensure development banks phase out fossil fuel investments, urged development to stop backing fossil fuel projects.
Rather, he said developments must rapidly scale up support for renewable energy and back projects to help those exposed to the impact of climate change.
A report published by IHS Markit predicted a reduction in capital expenditure for oil and gas projects, noting that a combined CAPEX through 2020 and 2022 was expected to total more than US20 billion.
According to APPO’s communiqué, the Ministers identified the imminent challenges that the oil and gas industry would face in Africa as international financiers withdraw funding for the industry and oil and gas research institutions in the developed countries that have always led the technological development are closing their petroleum faculties.
“They agreed that Africa needs to re-strategize as the game is fast changing. Africa shall need to look within for the expertise, technology, finance and markets for its energy resources. The Council noted that the potential exists as Africa has a huge population of 1.3 billion people. All they need is to be mobilized and empowered to be able to buy energy,’’ the communiqué said.
The Council reaffirmed its commitment to the protection of the environment, emphasizing the need to pursue technologies that would allow for the use of fossil fuels with minimum carbon footprints.
Furthermore, the Council called on the technologically advanced and financially capable countries to lend their support to African countries as they grapple with the challenges of Energy Transition.
The Council noted the need for intra-African energy infrastructures like cross-border pipelines, products depots and terminals.
Source: https://energynewsafrica.com
