EU Gas Demand: Oil Majors Abandon Africa For Middle East  

The projections and anticipation of promoting Africa’s huge gas potentials,especially, taking advantage of gas demand by European nations following supply gap from ongoing Russia/Ukraine, is being threatened.

This is as TotalEnergies, along with Italy’s Eni and the UK’s BP and Shell, have been at the vanguard of securing new oil and gas supplies for Europe to substitute for lost energy supplies from Russia since its invasion of Ukraine in February 2022.

After identifying huge gas deposits in Africa and the need to take advantage of the opportunities, analysts said, the continent will need investment to meet Europe’s growing demand.

Africa accounts for around 20 per cent of Europe’s gas imports and it was predicted that energy-rich Nigeria may be best positioned for an export windfall.

The focus of these efforts has been on liquefied natural gas (LNG), as it can be bought and transported quickly and does not require the time- and capital-intensive build out of infrastructure needed to move gas supplies through pipelines. In this sense, LNG was, and remains, the emergency energy of the new global oil market order.

The French oil and gas giant continues to secure such new supplies and to cement the presence of European energy firms in the Middle East, as evidenced again by two key developments in recent days.

The first of these is a three-year US$1-1.2 billion LNG supply agreement, beginning this year, made with the Abu Dhabi National Oil Company (ADNOC).

The ADNOC Gas’s chief executive officer, Ahmed Alebri, accurately summed up the broader significance of the deal, saying, it represented part of a long-term strategic partnership with TotalEnergies. In these wider terms, the seven-emirate UAE (of which Abu Dhabi remains the key energy source), had been earmarked by the U.S. and its allies as a key future energy, economic, and political partner prior to the Russian invasion of Ukraine.

This was evidenced by its being the first country to sign a ‘relationship normalisation’ deal with Israel on 13 August 2020.

These deals were a key part of the U.S.’s response to the expansion of Chinese and Russian influence in the Middle East after Washington had unilaterally withdrawn from the Joint Comprehensive Plan of Action (JCPOA, or colloquially ‘the nuclear deal’) with Iran in May 2018.

In the aftermath of this withdrawal, Israel had become increasingly sure that Iran was no longer ‘years’ away from being able to create a nuclear weapon but rather just ‘weeks’ away – around three weeks away, to be exact. Those around the then-U.S. President, Donald Trump knew that any escalation by Israel against Iran could be a catalyst for a broader conflict across the entire Middle East. This could eventually draw China and Russia into the conflict, in direct opposition to the U.S., and was a conflict scenario in war planning on all sides that almost inevitably led to global nuclear war.

The U.S. intention for the UAE in the relationship normalisation deals plan was for it not just to act as a beacon for other Arab countries to sign such deals but also for it to be used for Washington’s new global oil market model for Middle Eastern countries allied to the West.

The U.S. would ensure massive investment into such countries by its big oil firms, which would require increased on-the-ground presence of U.S. personnel in them to safeguard the assets.

Also, oil and gas from such countries would find a very willing end-buyer for all their energy in India, which was to be used as the substitute big global oil and gas bid to China in this model.

India perfectly fitted the requirements in this context, as the country’s role as the U.S.’s counterpoint to China in the Asia-Pacific region, led by its economic development and the corollary growth in its demand for oil and gas, was further underlined by data released in the first quarter of 2021 by the International Energy Agency (IEA).

This showed that India would make up the biggest share of energy demand growth – at 25 per cent over the next two decades, as it overtook the European Union as the world’s third-biggest energy consumer by 2030.

The tie-up between Abu Dhabi and India was to provide a showcase for this new U.S. strategy to fightback against growing Chinese and Russian influence in the region.

At the time, ADNOC’s chief executive officer, Sultan al-Jaber, stated that he looked forward to exploring partnerships with even more Indian companies across the energy giant’s hydrocarbon value chain.

He added that he wanted this to include expanding the commercial scale and scope of India’s vitally-important strategic petroleum reserves (SPR) partnership. This was in line with the crucial position that ADNOC was given in being the only overseas company allowed at that stage to hold and store India’s SPR.

In Iraq, in which Total Energies is also leading the West’s efforts, with news last week that the French company is expected to begin its US$27 billion four-pronged megadeal within the next two weeks.

The first of these projects – the completion of the Common Seawater Supply Project (CSSP) – is crucial to enabling Iraq to reach its longer-term crude oil production targets of 7 million barrels per day (bpd), and then 9 million bpd and then perhaps 12 million bpd, as also analysed in depth in my new book.

The project involves taking and treating seawater from the Persian Gulf and then transporting it via pipelines to oil production facilities to maintain pressure in oil reservoirs to optimise the longevity and output of fields.