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Energy transition and natural gas
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The tone of the session was pragmatic. It’s clear that operators will need to divest certain assets in the new, low oil price environment. Wissam Al Monthiry Tullow Ghana managing director was noticeably tight-lipped when quizzed on the company’s plans to sell assets as part of an effort to raise a billion dollars in proceeds to pay down debt. "Apart from Uganda, we are looking at other asset sales to be able to get to that number, and we’re working hard to identify the right ones. All of our portfolio has aspects we’re excited about and has incremental value to Tullow, but it just becomes a question of trade-offs in today’s world."
Bridging fuels
However, speakers agreed that there are exciting opportunities in Africa for independents, who will undoubtedly play a more significant role on the continent as the majors look to meet ambitious emissions targets. Tracey K Henderson, Kosmos Energy chief expedition officer, commented that “positioning ourselves to thrive in a longer-term low-price environment has meant high-grading and rationalising of our portfolios, with a focus on ILX (infrastructure-led exploration) and play extensions in proven basins”.
Linked to global emissions reductions targets is, of course, the rise of gas as a bridging fuel. Speakers across all sessions at AOW Virtual were excited about gas projects across the continent. Opening day two of the event, Gwede Mantashe, South Africa’s minister of mineral resources and energy, said: “We are re-positioning South Africa to be a serious player in the global gas market. We will promote the development of a domestic and regional gas market. We continue to advance our gas-to-power projects with the Coega Special Economic Zone (SEZ) identified as the first liquefied natural gas (LNG) import terminal.”
Nigeria LNG CEO, Tony Attah, is similarly positive in his outlook for gas, saying: “We took a big financial investment decision at the backend of last year – against the backdrop of what we call the Train 7 project – to grow capacity by 35%, moving from 22-million tonnes per annum today to 30-million tonnes.”
He added that he is looking to increase the amount of gas NLNG sells within the African continent, the bulk of which previously went to the US and is now exported to Europe.
When polled live at AOW Virtual, over 60% of delegates said they saw a mixture of gas and renewables being key to securing Africa’s energy future in the coming decades. Luc Koechlin, Électricité de France (EDF) Southern Africa managing director and Andrew Herscowitz, chief development officer at the International Development Finance Corporation (DFC), are advocates for solar power projects on the continent, the cost of which has decreased significantly in recent years. On this topic, Herscowitz says: “If you’ve got a solar project and if it’s going to be above ten cents per kilowatt hour, you’ve got some explaining to do. It’s a very different market than what it was five to 10 years ago”.
Source: African Press Organisation
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