A. About the Africa Oil Governance Summit
The Africa Oil Governance Summit (AOGS) is the Flagship programme of the Africa Centre for Energy Policy (ACEP). Instituted in 2015, the AOGS has convened annually in Accra, the capital of Ghana. The main goal of the Summit is to shed light on and address governance and development issues on the management and use of oil and gas resources across Africa. The AOGS thus creates an avenue for stakeholders within and outside the oil and gas industry across Africa and beyond to deliberate on efficient and effective approaches to engender sustainable and inclusive development through the exploitation and utilization of Africa’s oil and gas and revenues.
Speakers, panellists and participants are drawn from the public sector (government/state institutions); the private sector (local and foreign companies/businesses); academia; Civil Society Organizations (CSOs); and the local and International Media. Since 2015, the Summit has recorded about 1500 participants, excluding virtual participants engaged through both electronic and social media. In line with enhanced safety precautions against Covid-19, the 2020 and 2021 editions of AOGS were held virtually on Zoom. This notwithstanding, the 2021 Summit recorded about 200 participants, excluding those on social media.
Themes on topical issues discussed at selected previous summits include:
- “Africa rising as oil curse beckons for most countries – Is good governance the missing link to oil wealth and development?” (2015).
- “Maximizing the benefits of petroleum resources in Africa; the role of open contracting for efficient negotiations, revenue capture and effective revenue utilization” (2017).
- “Harnessing the potential of local content for economic growth and inclusive development” (2018).
- “Optimizing oil and gas resources in Africa: the role of new discoveries in the continent’s development agenda” (2019).
- “The implication of climate change on oil governance in Africa” (2020).
- “The Africa Continental Free Trade Area and oil and gas industry: opportunities. Threats and the way forward” (2021).
The 2022 AOGS seeks to leverage the platform and audience of the 2022 Conference of the Parties (COP 27) to host discussions bordering on the theme “Gas as a Transition Fuel and the Opportunities and Challenges for Africa’s Gas Market in the Wake of Global Supply Disruptions.” The Summit will convene experts and stakeholders in Africa’s oil and gas space to explore the implications of the ever-dynamic gas market and the opportunities for Africa’s optimal participation. The discussions will also deliberate on the investment risks in Africa’s gas infrastructure and strategies for engendering an attractive investment climate and positioning Africa to take advantage of emerging gas markets. As usual, ACEP will partner with key institutions to ensure the effective and successful delivery of the Summit’s intended objectives.
B. Key Output and expected outcome
Based on discussion points from the Summit, ACEP will collaborate with experts and relevant stakeholders to develop a policy document that comprehensively assesses the challenges, risks, and opportunities for Africa’s gas market in the wake of changing global gas dynamics. The policy document will advise African governments on regulatory reforms and strategic pathways for attracting investments in Africa’s gas infrastructure toward meeting domestic gas demands and optimizing gains from emerging gas markets.
C. Format of the Summit
The Summit will host keynote presentations and panel discussions on the identified thematic areas. Panellists and moderators will be carefully selected to ensure a balanced representation of investors, regulatory authorities, civil society, industry players, academia, and experts.
D. Participants in the AOGS 2022
Participants will be drawn from the following groups:
- Development Partners
- Heads of Missions and Embassies in Ghana
- International Oil Companies and Financial Institutions
- Regional and International Economic Institutions
- International ThinkTanks/NGOs
- Government Regulatory Authorities
- Civil Society Organizations
- National Oil/Gas Companies
- Private Sector Players
- Traditional Authorities
E. Exposition on the Theme for the 2022 Africa Oil Governance Summit: Gas as a Transition Fuel and the Opportunities and Challenges for Africa’s Gas Market in the Wake of Global Supply Disruptions
The transition from fossil fuels to clean energy sources is essential for reducing Greenhouse Gas (GHG) emissions and achieving the Paris Agreement’s goal of keeping global average surface temperatures at 1.5 degrees above the pre-industrial era. However, there is growing consensus on the need for a just transition that considers parties’ realities, especially in developing countries. Understandably, natural gas is gaining popularity as a transition fuel since it serves, in the meanwhile, as a cleaner alternative to Heavy Fuel Oils (HFOs) and coal. The United States Energy Information Statistics estimates that switching coal and fuel oils to natural gas saves about 70% and 37% of CO2 per MMBTU of fuel. It is, therefore, unsurprising to note the European Union (EU) recently declared private investments in natural gas projects as a transitional activity under its new Taxonomy for Sustainable Finance.
The forgoing, among other factors, has brightened the global demand outlook for natural gas. Gas is projected to grow by 0.9% between 2020 and 2035 amid projections of reducing demand for crude oil. McKinsey and Company project that about 100 million metric tonnes (MT) of LNG liquefaction capacity will be required by 2035 to meet the demand for gas. Gas is projected to play an even more critical role as a transition fuel in Africa. It offers a relatively cleaner alternative for bridging energy poverty and supporting industrialization. In addition, natural gas can provide Africa’s power sector with the needed grid system flexibility to support variable renewable energy while phasing out more polluting energy sources such as coal and liquid fuels.
The Russia-Ukraine war, and the attendant disruption to global supply chains, add to the layers of incentives for spurred investment in Africa’s gas resources in the prospects of bridging the supply shortfalls, especially in the European Union. As one of the four largest gas markets in the world (alongside China, Japan and South Korea)1, the EU sourced 40% of its gas from Russia in 2021. However, since the war, the EU is advancingambitious plans to phase out its dependence on Russian gas by two-thirds by 2022 and quit Russian gas imports by 2027. The EU intends to meet the supply gap with alternative supplies through non-Russian pipeline imports and LNG imports worldwide. This strategy has prompted several Europe-Africa gas trade deals to offset the supply shortfalls in the EU. For instance, in April 2022, Italy signed natural gas supply deals with Angola and the Republic of Congo to compensate for its cuts on Russian imports.
The urgent need for gas supply presents opportunities for Africa’s gas sector. However, commentators are divided on Africa’s preparedness to take advantage of emerging gas markets. On the one hand, the prospects of a shift to gas from Africa are premised partly on discoveries and substantial gas reserves. In June 2022, TotalEnergies SE and Shell Plc announced the biggest oil discovery since Namibia’s independence. This discovery follows recent significant gas discoveries by Eni and SONATRACH in Algeria’s Sif Fatima II concession. Some analysts, therefore, maintain that Africa is critically positioned in the gas market, albeit contingent on a competitive investment climate, unfastening regulatory bottlenecks, and enhanced security.
Contrarian commentaries, however, project a less optimistic outlook for African gas, hinged on at least three factors: First, many oil and gas development projects have witnessed significant delays. For example, the West African gas projects take an average of 12 years to proceed from discovery to production. This suggests that substantial gas productions from major LNG projects in Africa are unlikely to be realized before 2030. Secondly, Africa must measure its competitiveness with other producers from other regions such as Asia, the Middle East and America. For example, producers from the Middle East, and America, who have spare capacities, could have a better competitive advantage than African producers. Finally, some analysts predict a long-term reduction in gas demand due partly to the accelerating global transition to renewable energies. The EU’s long-term strategy for energy security includes aggressive exploitation of renewable energy technologies, which can reduce the significance of recent gas developments. These developments, however, signal the need for Africa to optimize its timeline for investing in gas whilst positioning itself to embrace and actively participate in the transitional economy.
The foregoing demonstrates the complexities of the global gas market dynamics and the uncertainty posed for the prospects of gas as a transition fuel and the future of Africa’s gas market. Accordingly, the 2022 Africa Oil Governance Summit is themed and convened against this backdrop. The specific objectives for AOGS 2022 are outlined below:
- To assess Africa’s domestic energy deficit and the role of gas in curbing energy poverty in the continent.
- To analyze the short and long-term future of global gas markets and the opportunities therein for Africa.
- To assess the risks and challenges of increased investment in African gas infrastructure from the perspectives of investors, regulatory authorities, and civil society.
- To identify the enhanced accountability mechanisms needed to put citizens at the centre of the discussion from investment decisions through revenue utilization.
Panel 1: Assessing the Investment Risks and the Reliability of Africa’s Gas Market (Keynote theme)
This panel will discuss Africa’s gas reserves, infrastructure requirement production, and the overall investment risks within the gas market. In addition, the panel will seek to answer the following questions:
- What is the current state of Africa’s gas reserves, and where are they located?
- What are Africa’s gas infrastructure challenges?
- What investments are required to close Africa’s gas infrastructure deficit to meet global gas demand?
- Where does Africa fall within the European Union’s gas strategy, and how competitive is Africa compared to existing and prospective producers?
- How does the European Union’s energy transition plan impact the prospects of an Africa-Europe gas trade?
- What geopolitical risks could impede the prospects of increased Africa-Europe gas trade?
- How reliable and secure is Africa’s gas supply compared to major current and prospective producers?
- What fiscal and regulatory measures are necessary to engender a competitive investment climate for Africa’s gas market?
Panels 2: Regulatory Imperatives Needed to Attract Investment for Africa’s Gas Infrastructure and Attendant Accountability Mechanisms Needed to Ensure Inclusive, Equitable Distribution of Revenues from Increased Exploration and Production.
This panel will host regulatory authorities and accountability actors to address the following questions:
- How does the increasing gas exports to emerging gas markets impact Africa’s ability to meet its domestic demand for gas?
- What intra-continental policies and collaborations are required to expand Africa’s presence in emerging gas markets?
- What regulatory measures are required to reduce delays and bottlenecks in contract negotiations and licensing rounds to enable Africa to take advantage of the transient market opportunities?
- What accountability measures are needed to ensure fair and equitable utilization of expected revenues from increased gas production?
- How can Africa leverage intra-continental trade agreements such as AfCFTA to create a formidable gas market?
- How will accelerated gas development impact Africa’s energy transition plan?
- What are the potential impacts of increased exploration, development, and production on host communities and local content? How can they be mitigated?