Over the next two decades, we will see a significant growth in Africa’s oil and gas sector, with population growth, urbanisation and the emergence of a wealthier middle class in Africa driving demand.

Global management consultancy Kearney partner and Africa energy and process industries expert Prashaen Reddy explains that the recent oil discovery off the coast of Namibia and the gas finds in South Africa and Mozambique, could create a greater interest in oil and gas exploration within the Southern Africa region while attracting billions into the Southern African Customs Union.

A white paper released by Kearney last year outlines the overarching strategic considerations for African utilities to forge a path to sustainability among the backdrop of this global paradigm shift. The paper also unpacks the broader macroeconomic trends that are shaping this transition.

The International Energy Agency states that, over the next five years, natural gas will outpace oil and coal by 1.6%. Therefore, a bigger conversation must be had as the availability of power is essential for economic growth, and, even more importantly, for social development.

Consequently, Kearney decided to partner with the African Energy Indaba, which was hosted last month, to contribute to discuss specific opportunities and common issues, such as licensing rounds, investment requirements and other key upcoming projects.

Why Highlight Gas?

Kearney notes that natural gas is cleaner and less environmentally hazardous than coal. It exists abundantly in various forms, beneath the various geological formations of Southern Africa, which is thought to have some of the largest natural reserves of shale gas in the world. Natural gas makes up a significant portion of the energy mix in Africa, currently accounting for about 7% of South Africa’s supply.

Beyond natural gas, growth in hydrogen, is expected to escalate rapidly in the coming years owing to shifts in the industrial, heavy transport and mobility sectors. The Southern Africa region has significant potential in hydrogen production, given the abundance and capacity of renewable resources and can become a major exporter of green hydrogen products and derivatives to high demand regions in the North and East.

“However, exploring for this gas is a lengthy and expensive process. Our investments into gas and renewables must be a synchronised collaboration with the coal sector, and not pit one against the other,” says Reddy.