Africa: What would be the outlook for African oil for this year 2023 ?

“A few years ago, the African energy industry was in survival mode. The COVID-19 pandemic had all but eliminated demand for crude oil and African exports had fallen sharply.

This is why, although many African states are still feeling the wounds inflicted by COVID, I find it encouraging to learn that the supply of liquids in Africa in 2023 has reached almost 7 million barrels per day (Mbps/d ), more than 430,000 barrels per day (bpd) higher than Africa’s 2020 lows of around 6.55 Mbps/d.

This progress is among the topics covered in the African Energy Chamber’s ‘State of African Energy Q1 2023 Report’, which will soon be released. The report details emerging trends shaping the global oil economy and highlights Africa’s role in meeting global demand.

Russian energy supplies to Europe continue to dwindle following the war in Ukraine, Africa is poised to increase its oil and natural gas exports to the continent, and African oil supplies are expected to remain stable throughout of the year 2023 and beyond.

Africa’s role in the global oil economy should be highlighted

The State of African Energy Q1 2023 Report provides several key insights into African oil production for the rest of the year.

In 2023, global liquids production (crude + condensates) is expected to remain stable, with an annual average of 83.4 million bpd.

Africa’s liquids supply is expected to contribute 8% of global volume during the year.

The continent’s top five producers – Nigeria, Libya, Algeria, Angola and Egypt – will contribute more than 80% of Africa’s liquids production in 2023.

While the majority of production from Nigeria and Angola comes from offshore projects, production from Algeria, Libya and Egypt comes from their respective onshore fields. Libya is expected to increase production in 2023 as the civil war subsides.

A number of new projects are expected to boost African supply in 2023.

In Nigeria, Shell’s Bonga North project, which could hold up to 525 million barrels of crude, could help the country boost production back to pre-pandemic levels. Nigeria’s output is rebounding, hitting its highest level in a year in February at 1.44 million barrels per day, and accounting for two-thirds of OPEC’s oil output increase this month -there.

With a $10 billion investment from TotalEnergies, Uganda’s Lake Albert development, along with the Tilenga and Kingfisher projects and the 1,500 km East African Oil Pipeline (EACOP), is expected to produce up to 230,000 barrels per day.

Ghana is set to double its production to more than 400,000 barrels per day thanks to recent discoveries in the Deepwater Tano Cape Three Points block, operated by Norwegian company Aker Energy. Ghana will play an important role in the region’s outlook this year as it will also reopen its 45,000 barrel per day Tema oil refinery.

In Senegal, the development of the Sangomar field, 60% completed last September, should produce its first oil this year. The $4.6 billion project, led by Woodside Energy in partnership with Senegalese state oil company Petrosen, is expected to produce approximately 231 million barrels of oil during its first phase of development, with total recoverable oil resources estimated at approximately 500 million barrels over its lifetime.

Angolan production soared, reaching 34.29 million barrels in January, an increase of more than 580,000 barrels from the previous month. Its capacity has more than tripled since the completion of the rehabilitation and expansion of its refinery in Luanda, with a capacity of 65,000 barrels per day.

These impressive numbers represent a significant growth trend for Africa to 2023. With more than 70 oil and gas projects set to come online by 2025, analysts predict that Africa could produce up to 2, 3 million barrels of crude per day by 2025.

Data and forecasts from our The State of African Energy Q1 2023 Report paint an encouraging picture of the African energy industry. In a turbulent global oil and gas market, the continent’s oil production is stable and growing. Our oil and gas industry is poised to breathe new life into our economies and create new opportunities for Africans in 2023.”

To learn more and read the full report, visit www.EnergyChamber.org 

Source: NJ AYUK for African Energy Chamber