Page 11 - AfrOil Week 10 2022

AfrOil PERFORMANCE AfrOil

In related news, the Italian banking group Intesa Glencore. It also financed the construction of
Sanpaolo announced in early March that it was Gazprom’s 16 bcm per year Blue Stream pipe-
putting its Russian operations under strategic line to Turkey.
review in light of Moscow’s actions in Ukraine. Meanwhile, Italy’s largest oil company Eni
One of Europe’s biggest banks, Intesa San- has announced it will divest from the Blue
paolo has played a significant role in financ- Stream pipeline. And Italian export credit
ing Russian oil and gas projects and deals over agency SACE said on March 4 it had temporar-
the years. Its notable transactions include the ily halted assessments of projects in Russia and
€5.2bn loan it provided to support Russia’s sale Belarus because of the deteriorating situation in
of a 19.5% stake in the state-owned oil com- Ukraine. ™
pany Rosneft in 2017 to Qatar Petroleum and

African Energy Chamber sees oil and gas

production, exploration rising in 2022

REGIONAL THE African Energy Chamber (AEC) said on
March 9 that it anticipated a rise in oil and gas
production this year.
In a statement based on its recently published
outlook for the first quarter of 2022, AEC noted
that Africa’s energy landscape is on an upward
growth trajectory, backed by new and existing
partnerships between major stakeholders. The
report, entitiled “The State of African Energy
2022,” provides an overview of mergers and
acquisitions within Africa’s oil and gas industry
and how they will affect the sector in 2022 and
beyond.
Despite operational challenges driving inter-
national majors to exit operations in some key
African hydrocarbon producing countries, over
70% of the overall oil and gas production from
Africa is projected to come from partnerships
between majors and NOCs through to 2026,
according to the AEC.
Africa’s oil and gas sector is experiencing
underproduction and underinvestment as inter- The report provides an overview of M&A deals and their impact (Image: AEC)
national majors exit portfolios in key hydrocar-
bon-producing countries such as Nigeria and and less well-funded indigenous companies.
Angola. The sales will give smaller players and, in
In West Africa, projects operated by majors Nigeria in particular, indigenous E&P compa-
are affected by high greenhouse gas (GHG) nies the chance to expand their portfolios. These
emission rates and rising costs. Many projects smaller players will also be hoping for more reg-
are being delayed owing to the finalisation of fis- ulatory, security and fiscal incentives from gov-
cal terms, further tax changes and regional price ernments in West Africa as they target some of
regulations. the majors’ assets.
In Nigeria, pipeline vandalism has resulted in Raising sufficient funds for the acquisition
millions of barrels lost to oil spills. Shell, a major and development of such assets is a major chal-
Nigeria onshore operator, has often faced legal lenge, as many international banks and inves-
actions in the recent past. Also, the growing shift tors have become increasingly wary of oil and
away from less clean fossil fuels has resulted in gas assets in the region. This is especially true
divestments being announced in the region by in Nigeria, owing to various above-ground
majors. concerns.
According to the AEC’s statement, Africa’s If these indigenous or locally experienced
upstream sector can see a significant change if players can overcome these issues and chan-
the oil and gas majors that are lined up to shed nel funds to the yet-to be-recovered resources,
assets in key producing countries eventually additional production can help stem anticipated
divest their portfolios to relatively lesser-known output declines in some countries in the region.

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