International Energy Agency chief economist Dr Faith Birol said that ‘Sub-Saharan Africa will remain a cornerstone of global oil markets while emerging as a major new player in the natural gas markets’, reported EURActive.
Sub-Saharan Africa will have the capacity to over-ride Russia as the leading global gas supplier by 2040, said International Energy Agency (IEA). This fact is encouraging the European Union to decrease it’s the number of deals it currently has with Russia and start investing in Africa.
The IEA World Energy Outlook Special Report said that although Africa is rich with unexploited resources, there is a lack of funding to develop the infrastructure required to successfully utilise the resources.
According to EURActive, Birol said that sub-Saharan Africa has ‘substantial’ untapped deposits of liquefied natural gas (LNG).
‘Investment in liquefied natural gas (LNG) projects could significantly enhance the diversification of gas imports to Europe’, he said.
With the current political crisis between the Ukraine and Russia, investors are starting to lose confidence as there is fear of potential negative impacts on the future. This makes Africa a prime candidate for investment.
EURActive reported that Dominique Ristori, the European Commission’s senior civil servant in charge of energy policy, said that the current issues surrounding Ukraine had encouraged the EU to look into potential investment in Africa.
Regions rich in gas resources by rank are Nigeria, Mozambique, Tanzania and Angola. According to the IEA, the combined natural gas production for these countries will total 230 billion cubic metres (bcm) in 2040.
Ristori said that 30 percent of identified oil has come from sub-Saharan Africa in the last 5 years.
He told EURActive that ‘any policy, activities or investment to ensure diversification of supply would support the EU’s energy security strategy’.
‘We have a clear priority, which is to reduce our external dependence and this is valid in particular when we are talking about gas, where we have one dominant supplier’, he said.
The EU and Africa would work on efficient and affordable logistical routes to transport the gas to Europe, which could be by boat, Ristori said. He added that Africa was not doing enough to capitalise on their resources and that they could help them achieve its full potential:
‘We should develop a policy orientated towards real cooperation [and] a new route to develop African energy resources’
Birol stated that ‘economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector’… ‘The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by $15’.
With the IEA’s prediction of 1 billion sub-Saharan African’s having electricity access by 2040, significant investment in infrastructure is needed.