Following success in oil and gas exploration in neighbouring countries and growing continental demand, regional oil and gas industry body the South African Oil & Gas Alliance (SAOGA) has noted a renewed interest in oil and gas exploration in South Africa.

Despite being underexplored for oil and gas, Africa is an “energy hungry” continent, presenting an opportunity for growth in the continental oil and gas industry, says SAOGA CEO Adrian Strydom.

“This is exciting, given the risk of energy security clearly emphasised by the loadshedding we are experiencing, the enormous game-changing economic opportunity it has for our country and the employment creation it will bring.”

He adds that without a sustained energy supply, loadshedding will continue to threaten economic growth and development.

Given the economic and energy security challenges South Africa is facing, exploring for local oil and gas resources, and producing related products, which can help to alleviate poverty, spur economic growth, and encourage economic and industrial development, cannot be ignored.

“Unemployment and hopelessness are among the most important risks facing Africa, and particularly oil and gas operations. The need for education and quality skills development cannot be overemphasised in helping to create a better future.”

Oil and gas companies, in particular, can do more to help inform and enable education, skills development and supplier development initiatives, adds Strydom.

However, a dilemma that increases risk in skills interventions, is that training must precede exploration and production projects, and in this regard, Strydom says government and industry must work collaboratively to find solutions.

Africa will see “unprecedented population growth” and, consequently, increased demand for energy and employment, he notes.

Greater opportunities will be evident during the production phase of oil and gas projects, after their discovery, as there will be an increase in job and business opportunities if and when such projects are further developed.

Energy Transition

A country’s energy transition should be approached as a process and not an event, says Strydom, adding that, rather than focusing on extending net zero carbon emissions’ timelines at a huge cost, Africa should be allowed to develop at its own pace while exploring cleaner and safer energy production solutions.

Although Africa’s hydrocarbon industry is in its infancy, the continent contributed about 4% of the global carbon emissions in 2023, with 600-million people in Africa not having access to electricity. This resulted in a negative impact on health, education and economic development.

Strydom adds that, with companies diversifying, many complementary opportunities are emerging for oil and gas service companies in terms of renewable-energy projects.

Companies in the oil and gas industry are constantly looking for innovative ways of reducing their carbon footprint. This is becoming increasingly important with the advent of carbon taxes, he says.

Meanwhile, although growth in renewable- energy development and adoption is encouraging, there is a need to become less dependent on importing finished products. More attention should be given to developing local manufacturing capacity, he says.

Increased growth in the energy sector will increase the demand for gas as a complementary energy source, as gas can be sourced where and when it is needed.

“I see the oil and gas industry, and renewables, coexisting and complementing each other into the future in Africa. The oil and gas industry will use renewables solutions where this is feasible,” concludes Strydom.