Minister of Mineral Resources and Energy Gwede Mantashe. Picture: Gallo Images/Daily Maverick/Felix Dlangamandla
Mineral Resources and Energy minister Gwede Mantashe says the African continent is sitting on wealth of brent crude reserves.
Mantashe was speaking at the Africa Oil Week happening this week in Cape Town.
The event brings together governments, national and international oil companies, independents, investors, the G&G community, and service providers.
Russia’s ongoing invasion of Ukraine has had a detrimental effect on developing economies.
Scarcity and high energy costs, increasing food prices, and ever-rising interest rates have become commonplace.
“South Africa, like other countries, saw the cost of refined products reaching record levels. This necessitated our government to release its strategic stock, thus forgo revenue in the order of US $750 million,” said Mantashe.
While the move provided little relief for South Africans, Mantashe said the move was likely to “deter investment from areas of oil and gas due to the cost of credit that could lead to risk aversion among investors.”
Apart from South Africans enduring 15 years of energy poverty, Manatashe says climate change-related problem has intensified the pressure to decarbonise.
The World Bank President recently warned that inflation, slow growth, lower productivity, higher interest rates and the drain on global energy supplies in advanced economies were likely to persist beyond 2023.
The cataclysmic series of events would have a devastating knock-on effect on developing economies.
But Mantashe believes the continent’s oil and gas reserves can lift the continent out of danger if there is an investment in the sector.
“For a continent that consumes two-thirds of her oil production and exports the remaining one-third, according to the Africa Energy Outlook 2022 Report, attempts of the European Union to move away from Russian gas imports are an opportunity for Africa’s oil and gas to earn her income through exports into Europe.”
Mantashe said while major oil companies are withdrawing from the continent, there have been new oil discoveries in Africa.
“We cannot be an import destination for refined products when our continent is endowed with crude oil. Imported refined products risk our economies,” said Mantashe.
While acknowledging South Africa’s commitment to a Just Energy Transition, Mantashe emphasised the changes must include energy security, regard for human lives and sustainability, job security, and economic growth and development.
“Discoveries of significant oil and gas in our neighbouring SADC member countries are encouraging. They will strengthen energy, and support other by-products such as fertilisers, to boost agricultural production. “This means we must invest in beneficiation to boost manufacturing, Mantashe concluded.
Compiled by Narissa Subramoney
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