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Europe’s big oil companies exploit natural-gas loophole in Africa

In depth
This article is part of the dossier: Africa’s natural gas loophole

By Pierre-Olivier Rouaud
Posted on Monday, 24 May 2021 18:38

Flames shoot out of a chimney at Petroleum and Natural Gas company factories by a salt lake at the Wadi al-Qamar (Moon Valley) along a highway of Alexandria
Flames shoot out of a chimney at Petroleum and Natural Gas company factories by a salt lake at the Wadi al-Qamar near Alexandria, Egypt December 6, 2020. REUTERS/Amr Abdallah Dalsh

Energy majors are increasingly reluctant to take on new oil projects, but they have not abandoned hydrocarbons altogether, with natural gas experiencing an upswing. In the second part of our series, we look at how the energy majors are increasingly reluctant to take on new oil projects.

This is part 2 of a 4-part series

Big oil companies are applying their energy transition strategy to their African operations, whether the continent’s states like it or not. The problem for the latter does not lie with oil fields currently under production, which will never have trouble finding investors, even if European majors are exiting such investments. In Nigeria, for instance, Shell, Total and Eni recently sold a 45% interest, valued at $1.1bn, in the onshore OML 17 oil field[HC1]  to the billionaire entrepreneur Tony Elumelu.

Instead, the risk is that there will be a slowdown in the development of new projects. In late 2020, during Africa Oil Week, BP’s Africa new ventures vice president, Jonathan Evans, said that, in view of carbon reduction requirements, BP would limit its oil extraction projects on the continent going forward.

Also in this in Depth:

Africa’s energy transition dilemma

On the continent, oil majors Total, Shell and Eni have shifted their focus over to natural gas developments, but their renewable energy and carbon offset projects still make up a relatively small slice of their business.

Africa’s green energy developers face uphill battle

A host of obstacles are preventing oil majors from achieving their renewable energy ambitions, from investment delays to natural hazards to a lack of clear legislation.

Republic of Congo: Total undertakes forestry initiative on Batéké Plateau

In a continental first for the Patrick Pouyanné-led energy group, Total is planting a 40,000-hectare forest 200km north of Brazzaville.