High-level OPEC officials unpacked the Organization’s short- to long-term crude oil market perspectives in a special session at the Invest in African Energy forum in Paris on Tuesday.

Based on OPEC’s latest Monthly Oil Market Report – released on May 14 – and World Oil Outlook, the session identified key growth drivers of oil supply and demand through 2045, underscoring the role of African and emerging markets in driving global economic activity.

“We believe in the future of Africa and the South-South – we see almost all of global oil demand coming out of emerging markets,” said Dr. Ayed Al-Qahtani, Director of Research Division and OPEC. “We see the global economy at least doubling in size and emerging nations commanding the lion’s share of energy demand going forward. Africa sits on north of 120 billion barrels of crude, and this can be extended to all commodities – precious metals, gas, hydropower, all of the above. The issue of investment is significant and hinders the exploitation of these resources that could facilitate huge potential for economic growth.”

“In the medium-term, non-OPEC supply will drive the market – we’re looking at an addition of 7 million barrels of oil per day – from Brazil, Guyana and Canada. However, we expect this supply to peak towards the 2030s. As soon as it peaks, there will be increased demand in OPEC supply and this demand will rise to about 40% share of the oil market by 2045,” said Irene Nkem Etiobhio, Chief Petroleum Industry Analyst. 

With positive economic growth anticipated into 2025, the panel shared insights into the role of inflation and various economic, social and geopolitical factors, particularly in the US, on global oil supply and demand. 

“We believe that inflation will remain high during 2024 and 2025, but will gradually decline and there will be less of a need for stringent monetary policies. Global economic growth will stand at 2.8% for 2024 and 2.9% for 2025,” said Behrooz Baikalizadeh, Head, Petroleum Studies Department.

“We estimate the US economy to grow by 2.9% in 2024 and by around 1.9% in 2025. Against this backdrop of a strong US economy, inflationary pressures will likely remain and will potentially delay decisions to lower interest rates. The strength of the US economy, coupled with inflationary pressures, will likely… result in high commodity prices,” said Angel Edjang Memba, Senior Financial Analyst.

The panel also highlighted recent developments in refining and trade on the continent and their impact on the price and availability of refined petroleum products. While Africa’s refining capacity has been limited to date, new developments – including Nigeria’s 650,000-barrel per day Dangote refinery – are reshaping the sector. 

“There have been notable changes in global refining capacity with new large-scale refineries coming online … These have contributed to a rise in new product supplies. In the near-term, this will exhibit pressure on refining margins, but could also be a good sign for end consumers, where prices are going down with more supply,” said Tona Ndamba, Chief Refinery&Products Analyst.

Distributed by APO Group on behalf of Energy Capital&Power.

Boasting 60% of the world’s best solar resources, Africa’s solar power potential presents multiple opportunities for investors seeking long-term, scalable financial prospects. A panel session during this year’s Invest in African Energy (IAE) 2024 forum explored strategies to unlock financing for renewable energy projects across the continent.

Taking place in Paris on May 14, the session, which included independent power producer ENGIE Energy Access, featured a robust discussion around solar energy deployment. Committed to raising electrification rates across the continent, the company is developing a $60 million mini-grid project in Nigeria, which is set for completion by 2026 and is poised to connect over 150,000 people to the grid.

“More than 600 million people lack access to electricity, and ENGIE Access’ goal is to bridge this gap,” stated ENGIE Energy Access Head of Funding Marie Testard, adding, “ENGIE Energy Access is the energy access company that aims to deploy this solution in sub-Saharan Africa, and so far, we have a presence in nine countries, building almost 10 GW of mini-grids.”

Meanwhile, having secured $222.5 million in commitments from African institutional investors in January, pan-African infrastructure investment platform Africa50 Group is well positioned to deploy a pipeline of renewable energy infrastructure projects. The fund is poised to play a vital role in addressing the continent’s energy needs while promoting inclusive and sustainable development.

“The African continent has a lot of renewable resources and the highest solar potential in the world, with only 5 GW of installed solar capacity so far,” stated Africa50 Infrastructure Investment Platform Strategy Director Molly Gbodimowo, adding, “Overall, Africa requires $277 billion annually to implement its 2030 Sustainable Development Goals.”

Underscoring the pivotal role of public-private partnerships and innovative financing mechanisms in driving renewable energy initiatives, the speakers stressed the importance of local institutions and a favorable investment environment in Africa.

Additionally, it was noted that Africa’s path towards a more sustainable future will require a concerted effort from international stakeholders in the continent’s energy sector to divest from carbon-intensive resources and move towards renewables.

Distributed by APO Group on behalf of Energy Capital&Power.

Anton Bredell, Western Cape Minister of Local Government, Environmental Affairs and Development Planning, said the judgement declaring the appointment of Ombali Sebola as Knysna’s Municipal Manager null and void should be seen as a strong warning message to councils that do not respect the relevant legal frameworks when making appointments in municipalities.

“This judgement is another victory for the rule of law and strengthens and confirms our interpretation of legislation that governs municipal appointments. It is unfortunate that we sometimes have to communicate through the courts to a council, but we also understand the dire consequences of having unqualified and unsuited individuals in critical positions in a municipality. We will remain firm on the minimum requirements and procedural requirements as set out in law, and councils should reacquaint themselves with these before embarking on recruitment to avoid the steps that we have had to take on this matter.”

“It cannot be that it takes more than a year of legal wrangling to set aside an appointment that was patently illegal right from the start. While we were fighting in court, Knysna has been paralysed by a lack of basic service delivery and we have had to work with officials who are more focussed on retaining their positions than on what they have been appointed to do, which is to serve the residents of Knysna,” Minister Bredell said.

On 22 March 2023 Minister Bredell sought, by way of an urgent application, to declare the decision taken by the Knysna Municipal Council on 25 January 2023 to appoint Ombali Phineas Sebola as its Municipal Manager, null and void, and in further orders, in the event of opposition, an order of costs.

In its correspondence to the Executive Mayor on 23 February 2023, Minister Bredell alerted the Executive Mayor, that the appointment of Mr Sebola was made in contravention of the provisions of the Local Government: Municipal Systems Act 32 of 2000 and the Regulations on Appointment and Conditions of Employment of Senior Managers, as published in Government Gazette No. 37245 of 17 January 2014.

Minister Bredell requested the municipality to terminate the appointment, failing which he would take appropriate steps to enforce compliance with the provisions of the Municipal Systems Act and the Appointment Regulations. No such steps were forthcoming from the Municipality, leading to the Minister to institute legal proceedings declaring that the appointment is null and void and seeking that it be set aside.

The Court in its ruling expressly held that critical required information was not placed before the Municipal Council at the time when it made its decision to appoint Mr Sebola. In this respect, there was a failure to provide Council with the Curriculum Vitae of the appointee, nor was the weighted scores allocated to the candidates during the assessment of their competency tabled before Council. In addition, it was apparent that Council did not have before it information related to the candidates leading competencies and core competencies. 

The Court further held that the applicant’s application was devoid of his academic qualifications, contactable references, registration with a professional body, full details of dismissal for misconduct and details of any disciplinary actions pending, instituted, or finalized against the candidate, which is specifically required in terms of the applicable Regulations.

According to the Court, “it is …. clear that the process of appointment was riddled by one or more procedural flaw and that certain documents which were supposed to have been before the Council were not, prior to the final appointment decision being made.” As a result, it was evident that the Municipal Council did not comply with the Municipal Systems Act and the applicable Regulations regulating the appointment process.

Minister Bredell said the length of time and legal costs to reach this point is unsustainable, and better consequence management is needed to deal with such cases.

Distributed by APO Group on behalf of Republic of South Africa: Western Cape, Department of Local Government.

Reacting to news that Nigeria’s oil industry regulator is prepared to offer a fast-track sales approvals process for oil companies wanting to sell their businesses in the country, Isa Sanusi, Amnesty International Nigeria Director, said:

“With Shell currently seeking regulatory approval for the sale of its business in the Niger Delta, it is essential that it is held fully to account for decades of grievous human rights abuses related to oil spills which have polluted the environment, contaminated drinking water and poisoned agricultural land, fisheries and people.

“An offer made by Nigeria’s industry regulator to fast-track approvals of sales by oil companies which accept responsibility for pollution must not be an easy option that allows Shell to cut and run from the suffering related to its operations in the Niger Delta, or which exposes local communities to more human rights harms.

“We are concerned the proposed fast-track option potentially gives large oil companies the upper hand in negotiations around sales approvals and will exclude affected local communities from the decision-making process. It is also essential that any approval is contingent on the buyers having the operational expertise and financial stability to manage the operations acquired safely and effectively to ensure local communities are not exposed to enduring harms.

“Amnesty International continues to recommend that any sales approval process related to Shell’s business in Nigeria must be full and thorough and involve safeguards to protect human rights, including an environmental study to assess clean-up requirements, an inventory of the physical assets being sold, and an evaluation to ensure sufficient funds are set aside for potential decommissioning of oil infrastructure.

“Shell’s sale must not be allowed to add to the fossil fuel industry’s long and woeful record of pollution by leaving more harm in its wake. Amnesty International is campaigning for a fast phase out of fossil fuels and a fair transition to renewables.”

Background

Shell announced in January that it had agreed to sell the Shell Petroleum Development Company of Nigeria (SPDC) to the Renaissance consortium, which comprises four exploration and production companies based in Nigeria and an international energy group, in a deal worth up to US$2.4 billion, financed partly with a loan to the buyers from Shell. The head of the Nigerian Upstream Petroleum Regulatory Commission outlined the fast-track approvals option at a meeting with representatives of major oil companies, including Shell and Exxon Mobil, in Abuja last week.

Distributed by APO Group on behalf of Amnesty International.