ExxonMobil’s Angolan Discovery: Another Beacon from Africa’s Prosperous Future Despite Prevailing Sentiment at Conference of Parties (COP27) (By NJ Ayuk)

ExxonMobil’s Angolan Discovery: Another Beacon from Africa’s Prosperous Future Despite Prevailing Sentiment at Conference of Parties (COP27) (By NJ Ayuk)

ExxonMobil’s Angolan Discovery: Another Beacon from Africa’s Prosperous Future Despite Prevailing Sentiment at Conference of Parties (COP27) (By NJ Ayuk)
ExxonMobil’s Angolan Discovery: Another Beacon from Africa’s Prosperous Future Despite Prevailing Sentiment at Conference of Parties (COP27) (By NJ Ayuk)

African Energy Chamber

By NJ Ayuk, Chairman, African Energy Chamber (www.EnergyChamber.org)

ExxonMobil’s recent discovery in Block 15 off Angola in the Bavuca South prospect adds further credence to the notion of Africa as a significant contender in future energy markets.

The discovery, the company’s first in the region since 2003, lies approximately 365km to the northwest of Luanda’s coastline at a depth of 1,100m and is expected to contribute to an eventual production capacity of 40,000 barrels of oil per day.

This find would not have been possible without a welcoming disposition to exploration and the agreeable conditions established by the government of Angola. The African Energy Chamber regards every outcome like this as a great success and another step closer to a prosperous future for Africa as a whole. However, our perspective is not shared by many who attended and spoke at COP27, the UN climate summit held this month in Egypt.

Voices of Opposition

South Africa-based climate activist Bhekumuzi Bhebhe, apprehensive of the environmental impact that African partnerships with international oil companies could lead to, led chants of “Don’t gas Africa” outside the event. Radical environmental group extinction rebellion,  Chloe Lebrand and their sponsors that don’t hire Africans with an Anti-African agenda have joined the chorus. 

Omar Elmaawi, an activist from Kenya who opposes the construction of the East African Crude Oil Pipeline, fears that government corruption would lead to the exploitation of African resources.

“My assessment has always been either our government leaders are really ignorant and stupid, or some of them have been compromised, and they are not working in the best interest of their people,” Elmaawi said.

Critics of African oil industry expansion suggest that investments should divert toward developing renewable energy for the continent instead.

German nonprofit Urgewald contributed to the 2022 Global Oil&Gas Exit List, an annual report that details the investment activities behind global oil and gas production. This year’s report revealed that despite their declared commitments to the UN’s Net Zero emissions goals, many financial institutions continue to back oil and gas companies, encouraging expansion for 96% of the industry.

Noted environmentalist Heffa Schuecking, executive director of Urgewald, spoke to journalists at COP27 on the difference between the stated intentions of the oil and gas industry and its real-world actions.

“We see new fossil fuel projects in 48 out of 55 African countries and these projects can be traced back to 200 companies,” Schuecking said. While the discussions are ongoing here at COP, we see a disconnect with what is happening in Egypt and in the rest of Africa. In Egypt alone, we have 55 companies prospecting for new gas discovery.”

Regarding Africa’s potential for renewable energy and the $5 billion currently at play in African oil and gas exploration, Schuecking said, “If we compare the investments going into the fossil side and going into the renewable side, it’s a huge gap. It’s enormous. We’re investing in the wrong place.”

The African Energy Chamber holds a differing view. We believe that these investments are targeting exactly the right place, at the right time, and we encourage more investors to follow suit.

An Overdue Reality Check

Climate protestors around the world have made headlines in recent months for blocking roadways, defacing buildings, and vandalizing priceless works of art while calling out for an end to oil. As they glue their hands – and even their heads – to gallery walls and showroom floors, they sport clothing, footwear, and accessories made from petroleum.

Some of these attention seekers have disrupted professional tennis matches, tangling themselves in the nets while demanding a cessation of airline travel or prophesizing environmental doom in the days ahead. One went so far as to set himself on fire, but none of them have offered any viable alternatives to fossil fuels.

Aside from their moments of questionable zealotry, these activists likely lead normal, modern lives in first-world nations that would be impossible if not for the incredible conveniences that oil and gas have delivered.

Despite the fact that fossil fuels deserve credit for enabling the technological revolution, massive improvements in quality of life across the globe, and the fastest population growth in human history, the dominant opinion shared by world leaders today is that we should stop using them as soon as possible.

While many of the COP27 discussions on timelines for ending global CO2 emissions often included improbable dates in 2050 or even 2030, one voice in the crowd offered a dose of realism.

In a statement given to UN News, Miriam Hinostroza, an environmental economist with the UN Environment Programme, laid out the stark truth of our current situation.

“Sometimes, a priority for countries is economic growth, which they only get from using fossil fuels – they are still cheap, the technologies are there, there are many power plants [and] they cannot [all of a sudden] just get rid of these plants. So, there is this issue on the stranded assets – what to do with all these investments, all these technologies,” Hinostroza said, suggesting that the idea of mandates banning fossil fuels within the next decade is “not a reality.”

A Handout or a Leg Up?

Considering that Africa is responsible for only 4.8% of global CO2 emissions but suffers under a disproportionate impact from climate change, the COP27 consensus is that Africa should leave its fossil fuel reserves in the ground and collect financial reparations from the nations fortunate enough to have already profited from their own petroleum resources.

Such pledges, however, often amount to no more than lip service. It has been two years since the Paris Agreement committed $100 billion per year to developing countries, but those promises remain unrealized.

As we watch China build more than half of the world’s new coal plants and Germany replace wind farms with coal mines, it becomes increasingly difficult to seriously consider the recommendations of the G20, given that they do not adhere to the practices they espouse.

Africa deserves to profit from the assets that lie in its soil and beneath its coastal waters, just as so many resource-rich nations already have. Rather than placing itself at the mercy of foreign aid that may never come, Africa must leverage its holdings to garner the greatest possible reward and wide-ranging advancements for its people.

Achieving the Right Balance

Exxon’s discovery in Angola serves as a case study on the correct course of action for African nations to follow. The generous tax incentives and red tape-slashing industry reforms put in place by Angolan leadership were significant enough to draw the U.S. oil giant’s focus away from South America for the first time in years. Furthermore, Angola’s plan to implement natural gas as a transitionary fuel while investing in solar energy projects and conducting green hydrogen and biofuel research will support an eventual conversion to renewables on a timeline that makes the most economic sense.

The idea that Africa’s oil and gas could remain untapped forever is a fantasy. The collection of our vast resources isn’t subject to debate. It is inevitable. International oil companies will continue to extract petroleum wherever it is available for as long as it is economically advantageous – a timeframe that will likely last decades. The only question is how to proceed. Will it be to our detriment, or will it be a net benefit?

The African Energy Chamber agrees that government corruption should be rooted out and barred from any seat at the negotiating table. We agree every measure should be taken to protect the African environment from harm, but addressing the issues of energy poverty and wealth inequality and ensuring a future where our children can flourish is of equal importance. By following the example Angola has set, welcoming exploration and pursuing mutually beneficial relationships with partners capable of erecting the needed infrastructure, we’ll find ourselves on the best path forward.

Distributed by APO Group on behalf of African Energy Chamber.