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9 Questions, 1 Expert
Charlie Mitchell,

Oil News Reporter, EMEA

S&P Global Commodity Insights

Meet LIVE Member!
Claire Godard,

Sr. Director, Specialist Sales, FCR,

S&P Global Commodity Insights

What is the term used for the process of releasing captured CO2 from the sorbent material in direct air capture?

A: Desorption

B: Absorption

C: Sequestration

D: Degassing

Which country is the world's largest producer of ethanol fuel, primarily derived from crops such as corn and sugarcane?

A: Brazil

B: United States

C: Argentina

D: India

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What is the main challenge associated with hydrogen storage for transportation applications?

A: Cost

B: Safety

C: Efficiency

D: Government Regulations

Which country is home to the world's largest direct air capture facility as of 2022?

A: United States

B: Switzerland

C: Canada

D: Iceland

1. What are the key trends shaping Africa’s upstream sector this year?

Africa’s oil and gas sector is experiencing a North Sea effect, with international energy majors exiting mature basins in countries like Nigeria and Equatorial Guinea to focus on frontiers like Namibia and Guyana, as well as less carbon-intensive and less risky projects elsewhere. In turn, small firms, independents and a new band of indigenous producers are taking over. With fewer resources but more commitment to marginal fields, can they help mature producers like Nigeria and Angola reverse production declines? At the same time, a recent string of military coups in West and Central Africa, rising extremism, and conflict in Sudan have worsened the continent’s risk profile just as producers cry out for additional investment. The region is also recovering from an acute rig shortage in the aftermath of the coronavirus pandemic and a temporary reduction in demand for West African barrels from key markets China and India following Russia’s invasion of Ukraine. And in the longer-term, calls for an energy transition risk leaving electricity-poor African countries behind.

2. Can you elaborate on the impact of the Ukraine war on appetite for West African crudes?

Price caps on Russian crude introduced by Western countries following Vladimir Putin’s invasion of Ukraine undercut West African crudes in 2022 and 2023 and led to India and China – the biggest buyers of heavy African oil – becoming hooked on Russia’s Urals crude. According to S&P Global Commodities at Sea data, exports from Nigeria, Congo and Angola to the two key Asian markets fell from 1.35 million b/d in 2021 to 1.04 million b/d in 2022 and 1.05 million b/d last year. This year that figure looks set to drop to 950,000 b/d. Diminished demand from Asia also caused differentials of key African grades to slip relative to Platts-assessed Dated Brent; Congo’s Djeno fell to a nearly three year low of -$7.40/b to the benchmark. Although West African producers found other buyers in Europe and the Americas, and have seen exports to Asia stabilize in recent months, disappointing Chinese consumption – closely watched by OPEC – could prolong the pain.

3. Angola quit OPEC in January. How influential is OPEC’s Africa contingent today?

Angola ended 19 years of OPEC membership when it quit the group in January, following a months-long disagreement over revisions to is production quota and baseline, which it said would reduce critical investment inflows. Underproducing African members that stuck around – Nigeria, Equatorial Guinea and Republic of Congo – saw their quotas slashed in January. Only Gabon is exceeding its target, while OPEC+ members Sudan and South Sudan have seen production fall due to ongoing conflict. In the past, voluntary cuts by Nigeria and other African members have been helped OPEC to stabilize the oil market, and Nigerian former secretary general Mohamed Barkindo oversaw the expansion of the bloc’s African group. But since Barkindo’s death, Africa’s clout within has waned, exacerbated by the formation of OPEC+ with a Russia-led group. Now that quotas have been brought in line with current production, OPEC’s African members have the chance to exert some influence once again.

4. What’s the latest on Namibia’s emergence as an oil producer following major 2022 discoveries?

TotalEnergies’ Venus and Shell’s Graff discoveries transformed sleepy Namibia into the world’s hottest exploration destination, drawing huge investment from big and small players and comparisons to Guyana. Namibia’s small economy is set to be utterly transformed by its upcoming oil boom. While investment has continued apace this year, the real work will begin this year as the majors look to shift from discoveries to development. Chevron and Galp are due to drill on their Orange Basin blocks, while Chevron fired the starting pistol on the battle for the nearby Walvis Basin, which has seen successful drilling in the past. All eyes are on TotalEnergies, however, which is targeting FID on its Venus project in 2025, CEO Patrick Pouyanne announced April 26. S& Global Commodity Insights analysts expect first oil from Namibia in 2029 through the Venus development, followed by Shell’s Graff project in 2030.

5. What other frontiers in Africa are drawing investor attention?

South Africa has lagged behind its neighbor Namibia despite sharing similar geology, due mainly to above-ground risks including uncertainty over fiscal terms and environmental protests. Still, majors and explorers, from France’s TotalEnergies to London-listed Impact Oil & Gas are present in the country. Meanwhile in West Africa, emerging producers like Cote d’Ivoire and Cameroon have seen a steady uptick in exploration activity. In Cote d’Ivoire, Eni’s Baleine development moved from discovery to first oil in under two years, lightning-speed by industry standards, and the country expects to produce some over 150,000 b/d by 2026 following Baleine’s ramp up. Senegal, too, has drawn investor attention. The West African country is set to become an oil and gas producer for the first time this year with Woodside’s Sangomar oil project and BP’s GTA. The whole continent remains ripe for exploration activity, with countries from Zimbabwe to Kenya hosting recent discoveries.

6. How are mature African producers handling the widespread departure of energy majors?

The exodus of IOCs from mature basins demands a strategic rethink from long-standing African producers. ExxonMobil is set to quit Equatorial Guinea in Q2, leaving state-owned GEPetrol to operate Zafiro, the country’s largest field. No country has been worse hit by the exodus than Nigeria, where ExxonMobil, Eni, Equinor and Shell have agreed to sell legacy assets to local companies. Although local companies say Nigeria’s government is on board with the transition, and suggest it could rejuvenate the sector and reduce oil theft, some of the divestments have faced official resistance and even legal challenges. By contrast, Angola has won plaudits for wooing smaller companies with improved fiscal terms and has been rewarded with a new influx of investment. Production, though, remains well below its 1.9 million b/d peak.

7. How much of a challenge is political risk and conflict in Africa today?

Political risk – from conflict and protests to succession dynamics – remains a key concern for African energy investors. Nigeria, Africa’s biggest producer with 1.4 million b/d of oil output, is losing some 400,000 b/d of crude to theft and sabotage in the Niger Delta, according to the government’s security advisor, while oil producers Gabon and Niger experienced military coups in 2023. Sudan, the main outlet for 160,000 b/d of crude from landlocked South Sudan, erupted in violence last July and a recent rupture on the pipeline to Port Sudan has ground exports to a virtual halt. Environmental protests have threatened oil projects in South Africa and the East African Crude Oil Pipeline, which will make Uganda an oil exporter for the first time. And in autocratic petrostates like Equatorial Guinea and Republic of Congo, investors are closely watching succession dynamics as ageing leaders prepare to leave office.

8. What impact will the Dangote refinery have on product flows to Nigeria and the wider region?

The 650,000 b/d Dangote refinery, first mooted in 2013, opened in January after years of delays and cost overruns. The colossal project hopes to end Nigeria’s dependence on refined products, which the government has spent billions subsidizing for years, fueling an illicit gasoline trade across West Africa. A senior Dangote executive told S& Global Commodity Insights that gasoline production would begin at the refinery in May. Dangote has already taken numerous cargoes of Nigerian crude from state-owned NNPC and four cargoes of light, sweet WTI Midland from the US, and has supplied diesel domestically and naphtha to the international market. Dangote is expected to yield some 327,000 b/d of gasoline and 244,000 b/d of gasoil/diesel at full capacity, with S& Global projecting the plant will reach commercial-scale refining runs in Q3 2024. As a direct result, gasoline production in Nigeria will exceed imports between 2025 and 2040.

9. Is Libya’s oil sector back on track after years of chaos and falling output?

Libya has been in a state of chaos since the NATO-backed uprising against Moammar Qadhafi in 2011 and is today ruled by rival governments – one internationally-recognized in Tripoli, the other in Benghazi dominated by eastern strongman Khalifa Haftar. Although Libya has not seen widespread fighting for some time and oil output has stabilized at around 1.14 million b/d with IOCs lifting force majeures, political actors retain the ability to halt production and exports. In 2022, a blockade by Haftar’s forces reduced production to 650,000 b/d. Now a reorientation of Libyan politics around prime minister Abdul Hamid al-Dbeiba, National Oil Company head Farhat Bengdara and Haftar could usher in a period of stability, according to analysts. But in a sign of the political chaos still plaguing the country – which is targeting 3 million b/d of oil production within 5 years – oil minister Mohamed Aoun was suddenly suspended in March due to “legal violations”.

1. What role do you play to contribute towards the collaboration of SPCI and the Middle East, Africa and CIS markets?

I lead our team of sales specialists across the dynamic markets of the Middle East, Africa and Central Asia. Our aim is to listen to our clients and identify the right solutions amongst our offerings that will help them to resolve problems and improve workflows. My team and I cover the crude, refined, chemicals, gas, power and climate markets but we are always looking to support needs for our other businesses such as biofuels and shipping. For new users we manage their training and onboarding for our research offerings and work closely with our analysts to deliver timely and relevant engagements whilst also keeping an eye out for trending questions and areas of interest which help us to tailor future reports and services.

2. Among the elements of LIVE, which one is your favorite and what makes it stand out to you?

I have been on LIVE since the start and the feature I always appreciated was being part of a community where you can connect with other industry participants and ask questions. For someone who has been around as long as I have the demise of Yahoo Messenger, which was widely used by the oil trading community, was a blow to communication so MyLive helps to bridge that gap! I also love being able to easily find great thought pieces by commodity.

3. As we strive towards the goals set for Paris 2050, which future energy development do you perceive as the potential saving grace, and what factors contribute to your belief?

I feel that the narrative is changing from an ideology of fossil fuels are bad to emissions are bad. There is a growing recognition, in the wider community, that we will need fossil fuels for the long term as part of an orderly transition that benefits all. Thus finding solutions to reduce emissions, improve efficiency and diversify the energy mix are all part of the solution. If we are too blinkered in the approach to addressing the problem of climate change we could see unintended consequences such as a lack of investment leading to higher oil and gas prices which in turn could see coal demand increase in parts of the world which would not be a winning solution.

4. Within your community, what is the trending "hot topic" in discussions or conversations?

These past few months there has definitely been an increased focus on NGLs and specifically propane. In emerging markets propane is a key part of the energy transition by providing a clean cooking fuel alternative to biomass. Across Africa we are seeing many initiatives to develop these markets as governments look to improve quality of life, generate carbon credits through cooking stoves and suppliers seek to lock in future demand for their output. There are many challenges to this with not least the infrastructure requirements but the pace is picking up and the change is taking place.

5. What energy development makes you most excited for the future?

I’d like to continue on the topic from the previous question and talk about real improvements to peoples’ lives. It’s not just about stopping burning biomass for cooking and avoiding those emissions but think about the hours women in rural parts of many African countries have to spend collecting wood, which is also a physically demanding task, that could be put to better, more productive use when that time is freed up. Energy transition isn’t just about electric vehicles and cleaner air in first world countries. We have to look further afield and provide solutions that improve lives everywhere!