Skip to content

Africa Energy Report: Is London Red-Lining Natural Gas Financing?

March 6, 2024 (EIRNS)—That distinct possibility is raised in a new report by the African Energy Chamber’s “The State of African Energy Outlook 2024.”

In a mailing introducing the report, titled, “African Countries Must Fast Track Natural Gas Approvals,” AEC executive chairman N.J. Ayuk notes that production from Africa’s existing natural gas fields will begin to decline beginning in 2025, a fact well known to the oil barons. By 2030, output will have dropped 25%, by 2040 it will be down by 40%. “Although these fields are considered crucial for sustained production,” Ayuk says, “the need for new projects to come online is critical to prevent a stall in output.”

Although Africa has seen numerous large discoveries of gas fields (he names eight countries), fully capable of “supercharging” the continental and even the global energy horizon, these fields remain undeveloped, at the “pre-financial investment decision” (pre-FID) level of development, as he calls it. “these [undeveloped] volumes play a critical role in the continent’s natural gas export aspirations and in becoming a true player in international markets.” Output from the pre-FID fields is expected to double in the next 10 years, but it is all contingent on financing—financing which former Bank of England Governor Mark Carney, now the UN Secretary General’s Special Envoy for Climate and Finance, has determined will go to his solar windmills.

While this is arguably a somewhat negative reading of current circumstances and ignores new players and new money from the East, the reality is that most of these “pre-FID” gas fields are contracted to Western oil majors such as Shell, BP and ExxonMobil. In Nigeria, while these companies are holding their gas leases (at the same time they are divesting themselves of oil production), they are not developing them, intent on holding the leases in order to prevent anyone else from developing them either.

Ayuk, who has elsewhere strongly denounced Green Finance, unfortunately still chides African countries to reduce “barriers” to foreign investment, as if it were incumbent on Africans to bow to the wishes of the bankers.