The report ‘The State of African Energy in 2025’, by the African Energy Chamber, also indicates that oil production in Angola will remain below the target set by OPEC.
The African continent is home to 590 million people without electricity, out of a total of 685 million worldwide, according to a report by the African Energy Chamber on energy.
According to the report on ‘The State of African Energy in 2025’, ‘access to electricity remains a distant goal, particularly in rural areas where connectivity is limited or non-existent’.
The electrification of the African continent, essential for industrialisation and economic development, ‘has been delayed by high grid connection costs, low income levels, weak local distribution infrastructure and intermittent electricity demand,’ the report notes.
The economic costs of having an electricity connection are themselves a difficulty, since users don’t guarantee constant use, ‘and may reduce use in order to lower their costs’, which makes the electrification process unattractive for large energy companies.
This disparity, the document also emphasises, ‘demonstrates the need for investment and the development of an infrastructure that can bridge this gap and improve living conditions on the continent’.
The report emphasises Africa’s strategic role in the global energy transition, especially in the oil, gas and renewable energy sectors, but points out the duality it faces, since on the one hand ‘it has immense potential for renewable energy’, but on the other hand, it deals with the realities of ‘fossil fuel energy generation and low access to energy’.
Oil production in Angola to remain below OPEC limit
The same report also indicates that Angola’s oil production will remain below the target set by OPEC and which led to the country’s withdrawal from the organisation at the end of 2023.
‘One of the major developments was Angola’s withdrawal from the Organisation of the Petroleum Exporting Countries (OPEC) after the expanded version of this entity allocated the West African nation a smaller quota than intended,’ reads the report, which states that Angola’s oil production is expected to be slightly above one million barrels per day this year.
‘OPEC’s production targets for Angola have been considerably higher than the production estimates of the National Oil and Gas Agency (ANPG) and than supply itself,’ says the document from the African Energy Chamber, an organisation designed to promote investment in the energy sector on the continent.
The organisation points out that the difference between OPEC’s production targets and actual production has even increased in recent years, ‘with 2021 production at 90% of the target, 2022 just above 80% and 2023 slightly below the target’.
‘Although the country has seen an increase in investment and drilling in recent years to halt the natural decline, production is yet to reach 1.18 million barrels per day, the quota that Angola had requested,’ say the analysts.
On the positive side they point out that ‘there are many incentives that have been given to companies, such as a reduction in taxes and improvements in the ability to recover exploration costs, to promote more exploration and drilling activities.’
Angola’s departure from OPEC at the end of 2023 will leave Libya, the Republic of Congo, Gabon, Nigeria, Algeria and Equatorial Guinea as African members of the organisation, which pump around 3.9 million barrels a day, with the possibility of increasing production to 4.28 million barrels a day in the second half of this year.
Africa accounts for 8 per cent of world oil production
The African continent should continue to contribute around 8 per cent of world oil production, with most of the growth being fuelled by OPEC countries and Angola, the second largest producer in sub-Saharan Africa after Nigeria.
In the report, the analysts write that ‘Africa could increase its production from 6.5 million barrels a day to almost 7.0 million by the end of 2025,’ with this increase in production depending ‘mainly on combating pipeline vandalism and oil theft in Nigeria, in addition to a more stable environment in Sudan, which also affects production in South Sudan.’
West Africa, the report says, is the region’s largest oil supplier, producing 3.7 million barrels a day, but with a sustained increase in production in Angola, and a recovery in production in Nigeria, the region could increase production to between 3.8 and 2.9 million barrels a day.
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