John Hamilton, CEO of Panoro Energy, provides insight into how the continent can spur exploration and production in 2022 and beyond.
While Africa looks to accelerate the development of its significant oil and gas resources – particularly as the continent struggles with the impacts of the COVID-19 pandemic and energy poverty crisis – significant investment is needed in the upstream and midstream sectors. Rather than abandon fossil fuels in the name of the energy transition, Africa needs to ramp up exploration in order to revitalize production and ensure energy security.
The African Energy Chamber spoke to John Hamilton, CEO Panoro Energy, about the reasons Africa’s production is declining, what can be done to turn this around, and the role gas monetization and development will play in the continent’s energy future.
What will this production underperformance in Nigeria, Libya, Angola, Congo, Equatorial Guinea and African countries mean for the continent as a whole?
Production underperformance is not necessarily a term I would use. Generally, reservoir performance and well productivity has met or frequently exceeded expectations which is a reflection of the high-quality petroleum geology much of the continent is blessed with. The underlying issue is more about investment and development activity not offsetting a natural depletion curve and the risk of substantial oil volumes being left stranded in the ground as the global energy transition plays out, potentially depriving future generations of the benefit these resources can deliver.
What it means for the continent, and more specifically the producing countries really starts with how it emphasizes a present lack of economic diversification and high dependency of governments on oil production for revenues and more specifically foreign currency. Economic diversification is going to be key for the oil-dependent economies in Africa. Accelerating the safe and responsible development of current production together with the considerable discovered but undeveloped oil resources and future discoveries from exploration efforts will help provide the means for these economies to grow and diversify for long-term prosperity and better balance.