Africa’s gas production declined by 11 billion cubic meters (bcm) to 259 bcm in 2022, representing six percent of global gas output during that period, says a report by the Gas Exporting Countries Forum (GECF).
According to the report, global gas production decreased by 0.1 percent to 4.04 trillion cubic meters, primarily due to a drop in global gas demand. Gas markets in 2022 were characterised by significant turbulence and fundamental changes, mainly driven by geopolitical developments and underinvestment in the industry over the past decade.
“The Eurasia and Africa regions experienced the most significant decline, while North America, the Middle East, Latin America and the Caribbean (LAC), Europe, and Asia Pacific recorded an increase in gas output,” the report said.
However, global gas production is expected to increase by around one percent in 2023, driven by North America, Latin America and the Caribbean (LAC), the Middle East, and Africa.
According to GECF, Africa’s gas production is projected to more than double, from 260 billion cubic meters (bcm) in 2021 to 585 bcm in 2050, representing an 11 percent share of global gas supply.
“Africa will be responsible for the second-largest volumetric growth, gaining more than an 11 percent share of the global gas supply by 2050, compared with slightly more than 6 percent in 2021.
GECF also said that Africa, the naturally gas-rich continent, needs to invest $1.7 trillion in the upstream gas sector to increase its gas production to 585 bcm in 2050.
“The upcoming years will witness a boost in Sub-Saharan Africa’s production due to offshore deepwater resource development. However, significant investment will be required to develop the discoveries,” it said. To increase their output, regional gas resource holders are significantly increasing their licensing rounds.”
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On gas production supply among the regions, Eurasia and Africa experienced the highest levels of decline (nine percent and four percent, respectively). Conversely, the gas output of North America, the Middle East, LAC, Europe, and Asia Pacific increased by 59 bcm, 20 bcm, 3 bcm, 3 bcm, and 2 bcm, respectively.
For 2023, with demand recovering, gas production is also expected to increase by one percent, driven by production increases in North America, LAC, the Middle East, and Africa (five percent, four percent, three percent, and two percent, respectively).
According to the report, the global gas consumption in the residential and commercial sectors for 2022 recorded a decline of 0.1 percent year-on-year to 886 bcm. “This corresponds to a decline of 1 bcm compared to 2021. However, gas consumption was higher than the pre-pandemic level by 4 percent,” it said.
“The key drivers of the decline were the warm weather conditions witnessed in 2022, with record high temperatures in the winter season, which reduced gas demand for heating during the year.”
At a regional level, Europe recorded a drop of seven percent, representing a decline of 16 bcm compared to 2021. However, North America and Asia Pacific recorded growth of two percent (6 bcm) and four percent (6 bcm), respectively. Africa recorded a growth of six percent compared to last year, representing an increase of 1 bcm compared to 2021.
Based on upstream oil and gas investment on a regional level, North America accounted for the lion’s share of upstream investment in 2022, which exceeded $185 billion, up by 42 percent year-on-year.
The report further said that this was followed by Asia Pacific and the Middle East, in which upstream oil and gas investment reached $98 billion and $71 billion, respectively.
“While Africa accounted for the lowest regional upstream investment, the region experienced the second largest growth, increasing 32 percent year-on-year to reach $38 billion,” it said.
“Europe was the only region that exhibited a decline in upstream oil and gas investment in 2022, decreasing by 14 percent compared to the previous year to reach $65 billion.”
The report further said that in 2023, all regions will likely experience double-digit growth in upstream capital spending.
“North America will continue to account for the largest share of investment, with an estimated $205 billion driven by the US, followed by Asia Pacific with $111 billion,” it said.
“The Middle East and Africa regions are expected to register the largest annual growth rates, with 20 percent and 18 percent, respectively.”
In Europe, upstream oil and gas investment is expected to rebound by 13 percent to approximately $73 billion, with energy security returning to the forefront.
The report also said that the power generation sector is still the largest gas consumer, with a share of 44 percent of the global gas consumption in 2022.
However, gas consumption in the power sector decreased by 0.2 percent year-on-year to 6,050 terawatt hour (TWh), driven by gas-to-coal switching in various regions amidst high gas prices, which made natural gas less competitive compared to other fuels.
