The past 18 months have torn through industry and sector globally, leaving behind complex layers of economic instability and financial growth uncertainty. For the oil and gas sector, these months have hit the bottom line like a hammer – as the African Energy Chamber (AEC) Africa Energy Outlook 2021 report points out, the CAPEX spend 2020-2021 outlook was almost $90 billion pre-pandemic but is now down to $60 billion thanks to delays and cost-cutting. This landscape is further complicated by growing global pressure on the African market to cut greenhouse gas emissions, meet the targets outlined by the Paris agreement, and, by doing so, capture investment attention and retention.
Currently, Africa is not leading the way when it comes to carbon emission efficiency and this is influencing investors. Ultimately, money goes where there is certainty and environmental accountability, and the continent has to pay attention to these challenges if it wants to stay on the investment radar. This is a concern raised by the AEC report and one that the sector needs to address if it wants to stay ahead and play the long game. Africa is not alone in its slow energy transition – the USA continues to lag behind Europe and other countries – but can leverage this complexity for gain if it approaches energy consumption and investment intelligently.
A changing market
It is a market defined by tough conditions, rough outlooks, and uncertainty, but it can still achieve its potential despite these challenges. While the market will not suddenly recover from the unbelievable impact of the pandemic, it is on a slow and steady path that is weaving its way through the reverberating costs, lost projects, and income impacts to find growth. For companies within this sector, it is crucial they take a forward-thinking approach to cost, investment, and energy usage to ensure that they are at the front of the line when it comes to investment and growth in 2022. This is the time to look at alternative energy supplies and solutions that allow for the organisation to cut its carbon emissions, reduce its environmental footprint, and show commitment to the global move towards a cleaner planet.
This is not just a box to tick. Not when record highs and lows and climate-related challenges are already making themselves known on the global stage. As the world sits up and takes notice, the oil and gas industry must entrench good energy practice into its ethos, strategy, and systems.
Finding the perfect balance
Of course, unpacking the right energy structure and developing the right combination of power and energy services is not a simple process. In this industry, no two projects are the same and time is always of the essence. You are expected to move at speed and deliver on promises without compromising on cost or energy ethics. Fortunately, the challenges that have put pressure on the market are the same that have seen smart solutions and service providers emerge, adapting their offerings to fit what the market needs.
You need to collaborate with a trusted third-party service provider that can offer you customised energy solutions that fit your very specific challenges. They need to provide you with services that fit into every part of your project lifecycle – from construction to startup and testing, to production, maintenance, and decommissioning. Solutions have to be capable of meeting your rigorous performance goals on time and within budget while consistently optimising your production. It is also important that your engagement mitigates the risk of downtime – keeping your project running no matter where it is located, no matter how rural or remote.
Plus, any engagement with any third-party service provider must ensure that your business is reducing its carbon emissions and meeting its energy transition needs.
Aggreko has collaborated with numerous organisations in the oil and gas industry in Africa, providing the latest technology and energy-efficient solutions and support. Our equipment is energy efficient, our solutions are relevant, and we work with you to make sure you are managing your carbon emissions effectively.
By Kweku Frempong, Area General Manager for Western and Central Africa