Expert view: Africa's growing energy sector

Last edited: 1 October 2018

Energy markets today move mainly to the beat of rising Asian economies. But, the vibrations of a new driving force are beginning to be felt. Across Africa, populations are growing; cities are booming and economies are advancing – and, as prosperity and quality of life rise, so will demand for energy. World leaders are taking note and energy opportunities in Africa were on the agenda at the UN General Assembly in New York. Here, BP Magazine delves into the facts and figures and asks three uniquely-placed BP experts for their professional – and personal – takes on the onward march of African energy markets

Unlocking opportunities

Jonathan Evans, head of new countries for Africa in BP Exploration, is an explorer turned negotiator. Having deployed his background as a geologist to help discover oil and gas around the world, he is ideally placed to build relationships with countries such as Côte d'Ivoire, São Tomé and Príncipe, and Madagascar, as BP looks to help these countries to unlock their precious natural resources. 

We see massive oil and gas exploration potential around Africa. That’s why we’ve established new positions in the past few years. New basins are being discovered and new projects are being built. We’re learning a lot about this continent and the very different countries within it. 

And, we have decades of experience to build on, whether that’s our big Upstream businesses in Angola and Egypt, or our energy marketing and trading arm operating in West and South Africa. These, and our other businesses, today employ around 2,000 people and, just like Africa, are set to grow further.

Africa’s growth will need energy and BP wants to play its role, providing energy in all its forms. There’s a lot of support within Africa for the Paris climate goals and efforts to reduce carbon emissions. Cities from Accra to Dar es Salaam have pledged to become zero-carbon by 2050.  

I think this shows how many African countries are ready to take a leap from where they are today to a different sort of future – avoiding the transitions that some Western economies are having to go through. One example is how mobile phones have taken off. In the West, we used landlines for decades; Africans have skipped that phase and gone from having no phones to mobile phones. We’re seeing similar things happen in energy, with many places in Africa potentially going straight from biomass to renewables. 

We’ve seen how our industry can transform the wealth of nations, bringing new jobs and revenue streams to governments. And, what’s going to be very important, if we’re successful in Madagascar, if we’re successful in São Tomé and Príncipe, is that the right institutions are established to make sure that the revenues flow in the right way to benefit those economies and to improve the lives of the wider population.

BP's current interests in Africa

Angola

Angola is an established energy market – and one that BP knows well, with operations in the country going back to the 1970s. Anderson Kamukotele joined BP in 2005 and is now an audit manager based in the nation’s capital, Luanda. 

Like many parts of the world, the Angolan energy industry has been through huge change over the past half-century. Its oil industry took off in the late-1960s, when offshore reserves were discovered in shallow waters. Production steadily increased through the 1980s, until major deepwater discoveries in the 1990s eventually pushed production to an average of 1.4mbd. 

While some forecasts suggest oil output could decline over the next five years, the outlook for gas in Angola looks bright. The recently-built Angola LNG plant in Soyo has started exporting LNG. As more gas is sold, it means less is flared -- that both creates value for BP and helps to advance the energy transition.

The prospects for renewables in Angola are also looking up. Government studies suggest the country has huge potential to develop solar, wind and hydro energy.

This all matters to Angola because energy is such an important part of our national economy. Oil alone makes up just under half of Angola’s GDP and more than 95% of exports -- almost all of which is sold to China and the US. The Government found that, over the past 30 years, Angola’s energy production has more than doubled, with an increasing proportion coming from clean technologies, such as hydro. It’s led to a renewed focus on our industry, both in terms of technology and production, but also about energy policy and pricing. It’s a sign that the Government is making a real priority of building infrastructure and expanding access to energy. Angola has a growing economy and population – so this is really good news.

Looking ahead, BP can continue to play a positive role in Angola. It is incumbent on all the international oil companies operating there to continue to use their social investment commitments to partner with the country in the struggle against poverty. Almost 90% of BP’s staff here are Angolan. We need to continue to give back to the societies where we operate – by creating and retaining jobs for the local population.

Africa's energy market

Senegal

BP, in partnership with Kosmos Energy and the two NOCs – SMHPM and Petrosen – is bringing natural gas resources off the coasts of Mauritania and Senegal onto the world market, thanks to recent major offshore discoveries. Just as new to the energy market is Ousseynou Diakhate, BP Senegal communications manager, based in Dakar.

Oil and gas is a very new sector to Senegal and the industry is relatively new to me as well. But, it is very important. Today, in Senegal, we have very expensive electricity, some of the most costly in Africa, and we are really dependent on fuel importation to supply this, which is not good for the country's industrialization 

Hopefully, domestic gas supply from projects like Tortue, BP’s massive cross-border gas field offshore Mauritania and Senegal, will help to support the wider provision of cheaper electricity and the growth of many other sectors and industries, too. 

Senegal has a ‘Plan Emergent’, which sets out goals for the future development of the country over the next 20 years – including the diversification of the country’s energy mix and enhanced growth for smaller businesses and entrepreneurs. So, the revenues and energy supplied by the emerging oil and gas sector should play a very important role in achieving that.

There is a lot of hope and high expectations. When the initial offshore oil and gas discoveries were first announced, a lot of coverage in the national media talked about Senegal as the next Dubai or Abu Dhabi. Some scepticism also exists about the industry, including concerns of corruption. Part of my role is helping to manage these expectations and concerns by building understanding of the fundamentals of the industry across civil society, the media, local communities and authorities.  

For me personally, I want to see really strong local content and capacity building for the countries in the region to help allow a national workforce to support and benefit from this new industry as quickly as possible. BP is a major partner for the country – and I really hope that the first steps we are making in the country will set the foundation for a sector that will be here for generations. I have three little girls and hope that this growing sector will help to provide them with access to a better education, a better health system and a better future.

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