There are 54 countries in Africa, which is the second-largest continent in the world in both land area and population (approximately 30.3 million km2 and 1.5 billion people). Each country has a unique petroleum sector. Some are major producers of oil and other liquids; some have reserves that are yet to be developed; some have little or no commercially viable reserves; some have significant refining industries; some have only small refineries; some have shut down their refineries, and others have never built refineries at all; and some are members of OPEC, or they are members of OPEC’s Declaration of Cooperation. It is impossible to make generalities about the petroleum sector that hold true for all 54 countries in Africa. Yet there is an underlying theme that is emerging: pragmatism. With 54 countries, Africa’s approach to the petroleum sector may seem scattershot and impossible to summarise. However, the wide range of energy market strategies indicates a new pragmatism. Each country has its own set of circumstances, and thus its own set of solutions. Africa is changing, and the global market in which African countries operate is changing.
Demographically, Africa has a young population. Many do not recall that nearly all African countries had a colonial past, most often with Great Britain, France, Spain, Belgium, and Portugal. The majority gained independence in the 1960s and 1970s. Many began to develop oil industries as a key element in national economic development and sovereignty. But decades have passed, the countries have grown and modernised, and many of the old refineries have been shut down or are barely operating. Only 5.6% of Africa’s population was aged 60 or older in 2020. Some refineries are even older than they are.
Some countries have forged ahead with new oil developments and infrastructure, but gone are the days when countries decided that they needed refineries as a simple matter of sovereignty. Modern energy projects must meet multiple goals, and they must work in tandem with other national policies. If they require funding from international agencies and banks, they must also meet social and environmental goals. Import substitution alone does not justify developing oil reserves and building downstream infrastructure, if the costs per barrel are too high. Moreover, the rapid expansion of refining in Asia and the Middle East has made export markets highly competitive. African projects must look first to domestic and regional demand, because demand may be slow or even shrinking in the rest of the world, and export refining may be unprofitable.
This article discusses petroleum production, demand, refining, and trade in the 54 African countries, with the new pragmatism as the underlying theme.
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