Several African countries have gradually ramped up oil and gas production over the past year as global demand for fossil fuels continues to rise. At a time when many western countries are restricting fossil fuel operations, the African region presents big oil companies with an opportunity to develop new low-carbon oil businesses in largely untapped regions. Can African countries that want to develop their oil industries make their case at COP27?

Several African leaders plan to make the case for continuing new fossil fuel projects across Africa at the next global climate summit in November, according to media reports. Africa offers the world access to vital natural gas resources at a time when many countries face energy shortages and rising prices. Not only that, but largely untapped African reserves could provide the world with a low-carbon resource to bridge the gap in the renewable energy transition. Still, it’s unclear whether those African leaders will be able to convince the rest of the world that they need Africa’s oil and gas resources, with many leaders aiming to reduce dependence on fossil fuels and support the fight against climate change.
According to the British “Guardian” report, COP27 submitted a 5-page document, emphasizing the need to support the development of oil and gas business in most African countries. “In the short to medium term, fossil fuels, especially natural gas, will play a major role in expanding modern energy sources, in addition to accelerating the use of renewable energy,” the AU wrote in the document.

But not everyone is happy with African leaders’ stance. A coalition of African NGOs called the actions of the African leaders “disgraceful” and “unacceptable”. Environmentalists have highlighted the potential for large-scale renewable energy projects in a continent already reeling from the brunt of climate change. Many fear that African leaders’ actions at the UN meeting could lead to a future in which Africa relies on fossil fuels rather than joining the global green transition.
However, the recent surge in oil and gas prices has caused many countries to reassess their positions on oil and gas issues, and many countries have increased production to meet demand. As the European Union and the United States tighten sanctions on Russian energy, many countries have had to fill the void through other avenues. In addition, the European Union announced this year that it would continue to rely on natural gas as a relatively clean transitional energy source while moving away from coal and oil as part of its climate change strategy.

So, at a time when the world seems to be moving away from new fossil fuel projects, how should Africa position itself to ensure that it reaps the benefits of its natural resources? Research by McKinsey Consulting Company in the United States found that the current cost of many oil and gas businesses in Africa is higher than the global average, which makes energy companies reluctant to invest in Africa. McKinsey Consulting pointed out that there are three measures that can help Africa find its position in the oil and gas market in the next few decades.
First, Africa should strive to reduce carbon emissions from oil and gas operations while improving cost efficiency. To ensure Africa’s attractiveness for energy investment, Africa must reduce emissions from oil and gas operations. In addition, African countries should strengthen legislation and regulations in the energy industry to improve the cost competitiveness of oil and gas operations, focusing on addressing inefficiencies and insufficient safety issues.

Second, Africa should increase energy supply through low-carbon infrastructure projects. Many oil majors are abandoning existing oil projects in favor of low-carbon alternatives. As long-developed mineral deposits are gradually depleted, a large number of oil and gas companies have turned their attention to undeveloped areas, hoping to develop low-carbon businesses that are more conducive to long-term development. Investments in natural gas projects, including pipelines, processing facilities and liquefaction projects, will also benefit the global renewable energy transition, and demand for natural gas will remain high for decades to come.
Finally, African countries must increase investment in renewable energy projects. As African countries’ oil wealth grows, African countries should invest in renewable energy projects beyond oil and gas businesses in order to finally wean themselves off finite fossil fuels.