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North Africa Producers Prepare for Critical Year

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Key North African producers Egypt, Algeria and Libya face another mixed outlook in 2022. Gas-prolific Egypt remains the primary destination for oil majors seeking to decarbonize their portfolios, while greater clean energy investment in renewables and hydrogen is likely ahead as Cairo prepares to host the COP27 climate conference later this year. Algeria’s finances have improved in line with higher oil prices. but it is still struggling to translate its legal and fiscal hydrocarbon reforms into serious investment. And Libya still flatters to deceive, struggling to find the political stability needed to reconstruct its oil industry and meet its oil and gas targets. The region remains important to majors amid the energy transition as a source of hydrocarbon extraction but also increasingly for its renewables and hydrogen potential. Egypt has attracted investment from a raft of majors partly due to its geology but also its flexibility on negotiating gas prices for offshore exploration. Ahead of COP27, the industry has a friend in Egyptian Petroleum Minister Tarek el-Molla who said in December that his ambition is to allow oil companies a more active role in international climate negotiations. Algerian state-run Sonatrach CEO Toufik Hakkar pledged this month to spend $40 billion on exploration, production and refining from 2022-26, with $8 billion earmarked for this year. Lastly, Libya has ambitious goals to reach 2.1 million barrels per day of oil production in five years from a current 1.2 million b/d.

Topics:
Oil Supply, LNG Supply, Gas Supply, Renewable Electricity , Hydrogen
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