The African Energy Chamber's recent visit to China was a strategic move to explore new opportunities for collaborative project development and financing, particularly within the oil and gas sector.
In recent years, there has been a notable increase in Chinese foreign direct investment in Africa, driven by Beijing's efforts to enhance its global trade and credit networks. Initiatives like the Belt and Road Initiative, which is a major global infrastructure project led by China, have resulted in investments of up to $21.7 billion in Africa in 2023 alone. Additionally, state-owned enterprises such as the China National Offshore Oil Corporation (CNOOC), China National Petroleum Corporation, and China Petroleum & Chemical Corporation rank as the fourth-largest energy investors on the continent. As new prospects in upstream hydrocarbon development, regional infrastructure, and downstream processing emerge, China's investment portfolio in Africa is anticipated to expand significantly.
In light of the growing opportunities for Chinese investors in Africa, the African Energy Chamber (AEC), which represents the interests of the African energy sector, is planning a working visit to China to foster new investments and global collaborations. A delegation led by AEC Executive Chairman NJ Ayuk will engage in bilateral discussions with Chinese government representatives and private sector stakeholders, focusing on investment opportunities, viable projects, and China's evolving role in Africa's upstream, midstream, and downstream energy sectors.
China's Growing Energy Presence in Africa
Chinese state-owned and private enterprises, already well-established in Africa's mineral and renewable energy sectors, are now focusing on the development of oil and gas resources across the continent. Wing Wah, a Chinese oil and gas firm, is leading an extensive initiative in the Republic of Congo aimed at maximizing resource monetization and advancing the utilization of natural gas. The Bango Kayo project introduces an innovative development strategy for the Bango Kayo oilfield, extending production beyond the initial block lifecycles and capturing previously flared gas. Over three phases, Wing Wah plans to progressively enhance its gas processing and valorization capabilities to generate LNG, butane, and propane. The primary objective is to satisfy domestic demand, with any excess gas earmarked for international export, thereby establishing the project as a significant player in the nation's energy sector.
In Angola, China has invested nearly $14 billion over the last ten years, predominantly in the energy sector. Currently, Chinese firms are pushing forward with refining projects while exploring new ventures in upstream oil and gas. Earlier this year, executives from CNOOC visited Angola to explore investment opportunities in oil exploration. CNOOC is evaluating a potential investment in Angola’s Block 24, a deepwater concession with significant promise. Additionally, construction company China National Chemical Engineering signed a memorandum of understanding with Angola’s national oil company Sonangol in 2023 for the development of the Lobito Refinery, which is set to become the largest in the country, with a capacity of 200,000 barrels per day.
In East Africa, CNOOC is collaborating with TotalEnergies and the national oil companies of Uganda and Tanzania to develop the East African Crude Oil Pipeline. This pipeline, which spans 1,443 kilometers, is intended to transport crude oil from the Kingfisher and Tilenga oilfields in Uganda to the Port of Tanga in Tanzania, with an estimated project cost of $5 billion. So far, the partners have secured $2 billion, while the governments of Uganda and Tanzania are pursuing an additional $3 billion in debt financing, primarily from Chinese financial institutions such as the Export-Import Bank of China and the China Export & Credit Insurance Corporation. Additionally, CNOOC is working with the Tanzania Petroleum Development Corporation to explore deep-sea Blocks 4/1B and 4/1C, and is in discussions with South Sudan to enhance production at Blocks 3 and 7 in the Paloch fields. In West Africa, the company commenced wildcat drilling in Gabon’s Blocks BC-9 and BCD-10 in 2023 and has renewed its production sharing agreement with the Nigerian National Petroleum Corporation and TotalEnergies for OML 130
“As Africa’s pipeline of bankable oil and gas projects grows, Chinese investors are bound to play an even greater role in supporting development across the industry. Leveraging strong multilateral ties established under programs such as the Belt and Road Initiatives, Chinese companies are gradually emerging as the partners of choice for upcoming oil and gas projects in Africa. From upstream exploration to downstream infrastructure to power and manufacturing industries, Chinese companies can catalyze development as Africa aims to make energy poverty history by 2030,” states Ayuk.
The AEC's visit to China is strategically timed before the African Energy Week (AEW): Invest in African Energy conference, which is the largest energy event in Africa, scheduled for October 2-3 in Cape Town. With China's increasing investment activities in Africa, AEW: Invest in African Energy aims to bridge the gap between Chinese investors and African project developers, promoting a new wave of collaborations that propel projects ahead. The event will feature presentations, panel discussions, and investor forums that highlight viable projects throughout Africa's energy value chain, equipping participants with essential insights to enhance investment opportunities.