IEA predicts oil output to hit 3.3m barrels per day in 2022

The International Energy Agency (IEA) has predicted that global demand for oil and gas will increase and that oil demand alone will expand by 3.3 million barrels (mb/d) per day in 2022 and return to levels pre-COVID of 99.7 mb/d, a development that will provide an opportunity for African producers like Niger to expand their oil and gas industry and help meet demand.

In a bid to accelerate exploration and production to achieve this goal, Niger is making its regulatory and fiscal environment conducive to oil and gas energy market players.

The recent signing of the Niamey Declaration’ between the ministries of energy of the Republic of Niger, Algeria and Nigeria during the Economic Communities of West African States (ECOWAS) Mining and Petroleum Forum (ECOMOF) in Niamey on 16 February 2022 is a game-changer that will unlock the potential of the country’s oil and gas sector to meet global energy demand.

The deal paves the way for the development of the multibillion-dollar, 4,128 km trans-Saharan gas pipeline project that will connect the three African countries to the European market to trade up to 30 billion cubic meters of natural gas a year.

A $4.5 billion 1,950 km oil pipeline project is also underway in Niger and is expected to increase the country’s production capacity fivefold by 2023, once the project is operational, setting up the West African state. as an energy hub to meet both regional and continental energy needs. demand.

Furthermore, the development is expected to provide significant economic growth for the West African state. All infrastructure development projects aim to attract investment that can be used to expand the country’s oil and gas industry. They also challenge the Nigerien government to expand its exploration activities to increase its oil and gas capacity portfolio so that it can play an increasing role in helping to meet local, regional and international energy demand.

“What Niger and the oil majors have managed to achieve in such a short time is impressive, showing how political will, a transparent and productive framework, and an environment conducive to investment can drive growth in the energy sector,” says NJ Ayuk. , CEO. of the African Chamber of Energy.

Despite having vast oil and gas reserves, African governments are struggling to establish attractive capital regimes for infrastructure development and exploration and production activities that would help boost economies.

With the right policies and infrastructure development, Niger’s oil and gas sector is expected to account for about 24% of the country’s GDP, 45% of tax revenues, 68% of exports and 8 % to 12% of formal employment by 2025.

Expenditure on exploration and production must be optimal for the West African state to harness its gas reserves for economic prosperity and energy security. Niger’s oil reserves are currently estimated at 3.7 billion barrels and the country produces approximately 20,000 barrels of crude oil per day, which is refined to meet local demand and exported to Nigeria, Mali and Burkina Faso.

To expand its oil and gas potential, Niger has enacted policies that encourage the participation of international market players, as evidenced by the government forming an exploration and production joint venture with the China National Petroleum Corporation in 2003. A wide range of international companies including Tamoil, Mobil and Total are present in the country’s oil and gas market and local gas companies Nigergaz and Sonigaz continue to expand their operations with a specific focus on exploration and production for economic growth. and energy security.

Laws such as the 2017 Petroleum Code provide companies with years of exploration and 25 years of production activities and exemption from VAT and customs duties, making Niger an attractive investment destination.

Niger’s vast oil and gas resources remain untapped and discussions at African Energy Week 2022 (AEW), Africa’s premier investment platform, taking place in Cape Town from October 18-21 2022, will focus on how the models are implemented in major oil and gas markets. Producers like Nigeria, Libya and Angola can be replicated to grow Niger’s exploration and production.

The IEA says that Africa will be increasingly influential in shaping global energy trends over the next two decades and with the continent home to five of the world’s top 30 oil producers, AEW 2022 will highlight the role it can play. regulation to unlock the investments needed to scale up oil and gas exploration and production to address energy poverty.

AEW 2022 will explore how governments and market players in Africa can attract more funding that will allow them to increase their market share in the global market.