Underneath the Atlantic Ocean, lapping the West African coast, sits substantial pockets of oil & gas. This is certainly the case in Mauritania, and the race is on to access these deepwater resources.

The Tortue Ahmeyin field is the subject of much foreign interest. Kosmos Energy has been one of the key motivators behind development of this major find, and, along with BP, is set to develop a floating $2bn LNG hub, straddling the Mauritanian-Senegalese maritime border.

Tortue FLNG, despite having a projected cost of $2bn, is expected to generate $2bn in revenues for the Mauritanian government, which would give it the power to transform its internal infrastructure, and create an even better deal-making environment for IOCs.

Indeed, many have already flocked to the West African nation. Apart from the aforementioned BP and Kosmos, Shell is one of the key explorers operating in offshore Mauritania right now.

The Mauritanian minister of oil, energy and mining, Mohamed Ould Abdel Vetah, said: “Shell’s entry in the Mauritania offshore area represents an important added value to the exploration activities and will contribute to maintain the momentum for developing the energy sector in Mauritania.”

This came after Shell came to a production sharing agreement with the Mauritanian energy ministry, letting it begin exploratory drilling in July 2018.

Mauritania itself has a lot going for it when it comes to oil & gas investment. For instance, its tax and fiscal system is geared towards making it easy for exploration to generate big returns, assuming hydrocarbons are found. Secondly, no royalty payments are required as of yet, and corporate income tax floats around 25%.

Mauritania is a strong investment hub, as interest from multinationals demonstrates.


Energy Development To Relieve The Infrastructure Restraint

The African Continental Free Trade Area agreement (AfCFTA) will constitute the world’s largest free trade area, consolidating an integrated market of 1.3 billion consumers with a combined gross domestic product (GDP) of approximately $3.4 trillion.  The objective is to realise a continent-wide single market for goods and services with free movement of business, persons and investments.

The AfCFTA envisions to expand intra-African trade and intensify regional integration by successively eliminating tariffs on 90% of product categories.  Removal of such trade barriers assures to not only improve efficiency, enhance competition, and incentivise development of strategic solutions to local challenges through regional economies of scale, but essentially advance the efficacy of resource allocation.

Successful implementation of the agreement is set to have a profound impact on the continent’s energy sector. Regional integration pertaining to energy, represents a viable solution for emerging economies to enhance their energy landscapes in furtherance of realising social, environmental and economic benefits owing to improved efficacy of resource utilisation. Regional integration is pivotal to ensure that energy resources get from localities where they are most affordable, to where they are required.

Correspondingly, regional integration on account of the AfCFTA, is forecast to improve security of supply. Integrating operational reserves and installed capacity enables combined power systems from having to invest in additional facilities. In the event of emergency situations, regional collaboration provides an alternative source of supply for operating reserves and support thereof. Moreover, sharing with neighbouring countries can provide advanced system flexibility and reliability by expanding the supply portfolio of diverse energy resources as opposed to exclusively relying on regional and established resources and supply infrastructure.

To address the continent’s existing energy infrastructure gap, African governments are proactively aiming to expand electricity access, deliver clean cooking solutions and pursue inclusive sustainable energy development. While these efforts are locally supported through existing platforms such as the regional power pools, the AfCFTA provides an entirely new platform to expand these efforts regionally and pursue energy development to relieve the infrastructure restraint. For instance, one key anticipated outcome of the agreement is the acceleration of industrial output that would comparatively depend on the availability, affordability and security of energy supplies at a scale for industrial growth.

Improved energy trade and energy integration initiatives will boost economic development in Africa by reducing transaction costs and enabling market and economic collaboration, conclusively accelerating investment incentives. Further, removal of impediments to intra-African trade by AfCFTA portends additional US public and private investment in Africa’s oil and power sectors, since increased investment is aligned with US policy as well as sound business consideration.

Africa is renowned for its abundance of renewable energy resources, amongst which include wind, solar, geothermal and hydropower. These constitute a consequential impetus for regional energy integration. Progression and mobilisation of such clean renewable energy sources through regional collaboration efforts afford the continent’s citizens improved environmental quality.   “Developing renewable energy resources to address the demand for energy in Africa, will be in the spotlight at the upcoming Africa Energy Indaba.  The conference will discuss the AfCFTA and how investors and energy project developers can benefit from the agreement and how this can catalyse the development of renewable energy projects.” commented Liz Hart, Managing Director, Africa Energy Indaba.

Similarly, renewable energy resources are site specific and can therefore be exclusively transported through electricity interconnections. Additionally, power interconnections remain the only expedient alternative to making fuels or resources such as lignite, hydropower and renewable resources, available to other areas. Electricity interconnections, realised by regional integration, enable the expansion of these energy resources to benefit the continent at large.

African Union to roll out continent-wide electricity market masterplan

The African Development Bank (AfDB) and the African Union Development Agency (AUDA-NEPAD) have agreed to jointly develop a blueprint for a pan-continental electricity network and market.

The agreement to set up a Continental Power System Master Plan between the Bank and AUDA-NEPAD was unveiled recently during a three-day workshop on the sidelines of Programme for Infrastructure Development (PIDA) Week held in Cairo. The workshop also produced the Masterplan’s terms of reference.

“The Continental Power System Master Plan will ensure that competitive electricity markets are developed at regional and continental levels, creating unique opportunities to optimally utilise Africa’s vast energy resources for the benefit of Africa,” said Professor Mosad Elmissiry, a senior energy advisor to AUDA-NEPAD’s CEO.

The workshop was aimed at advancing the launch of an Integrated Continental Transmission Network to link national power utilities into regional power pools and, ultimately, into a continent-wide transmission network. Plans also include setting up a market for electricity trading.

The Masterplan also will inform the energy component of a PIDA Action Plan, which focuses on key regional integration projects.

Development of a unified electricity transmission network and market for electricity trading are viewed as a critical priority to improve the lives of people across the continent.

“Most state-owned electric utilities in Africa today are unable to secure the financial resources needed to implement required segments of regional interconnectors and associated national feeder lines,” said Angela Nalikka, the Bank’s manager for national and regional power systems, to explain the impetus for the partnership. “The Bank plans to encourage private sector participation in transmission projects in the continent.”