A major fallout of the conflict caused by Russia’s invasion of Ukraine is the sudden energy crisis that Europe has found itself in. For decades, Russia has been the major supplier of gas crude oil to the rest of Europe, and now as the world tries to force Russia to end its invasion of Europe by placing economic sanctions on it, it’s clear that the dependence on Russia for energy is a situation that Western countries can scarcely afford and Europe is looking for new energy partners. The conflict has led to a sharp increase in the prices of oil and gas and is having a ripple effect on retail petrol products as well as electricity costs across Europe. This is where African countries can step in to fill the gap. Several countries have hydrocarbon reserves that can provide for the continent’s own needs as well as export to Europe while bringing in much-needed revenue. The week’s final edition of Business Edge features Craig Morkel, Chairman of South African Oil & Gas Alliance’s Gas Economic Team who converses with Tolu Adeleru-Balogun on the opportunities open to Africa to take advantage of Europe’s energy crisis.
Right away, Craig Morkel lets it be known that even before the start of the Ukraine invasion and resultant sanctions, it was unlikely that Russia alone could satisfy the energy needs of the continent. “The demand for gas in Europe cannot be met by Russia alone. Europe has gas flowing in from other sources and it is the quota that Russia contributes that African countries can step in and provide,” he said. So it is possible for these countries to benefit and experience a windfall – if the infrastructure to extract, process and transport them exists as well.
The infrastructure itself is another major factor as Africa doesn’t have the required system in place to produce oil and gas to the European market. A great lot of investment still needs to go into the ecosystem to make it worth the while.
Watch their full conversation above.