AFRICA IS A COUNTRY
Kenya’s Clean Energy Drive Gains Momentum Alongside Oil Ambitions
- Kenya aims for 100% renewable electricity by 2030, with nearly 90% of its current power from clean sources like geothermal, wind, hydro, and solar.
- The country is preparing for commercial oil exports in 2026 while expanding solar adoption, rural electrification, and clean cooking initiatives.
- New policies, private investment in grids, and major renewable projects are driving Kenya toward universal electricity access and reduced power losses.
Kenya has developed a strong renewable energy sector in recent years, as it aimed to diversify its energy mix beyond fossil fuels to boost its energy security. The launch of a national energy plan and the launch of a wide variety of renewable energy projects are expected to help achieve the country’s renewable energy aims, as the East African country also develops its oil production capacity.
Kenya began exporting crude oil in small quantities in 2019 and hopes to start commercial crude exports in 2026, following several development delays. The U.K. oil and gas firm Tullow Oil was unable to secure investors for the South Lokichar oilfield in the East African country after France’s TotalEnergies and London-listed Africa Oil withdrew from the project two years ago. This left Tullow on its own to find the financing needed to develop a pipeline to transport crude out of the landlocked northern region.
Tullow signed a terms agreement with Gulf Energy Ltd to sell all its working interests in Kenya for at least $120 million earlier this year and is expected to commence crude exports next year. The South Lokichar project is expected to produce between 60,000 and 100,000 bpd of crude, with an estimated 560 million barrels recoverable over 25 years. The Kenyan government also plans to launch an oil and gas exploration round for 10 blocks in September.
However, with the country’s oil industry in the nascent stage of development, Kenya is looking to continue developing its other energy sources to ensure its energy security. In 2018, Kenya set the goal of being 100 percent powered by renewable energy by 2020, a deadline that was later changed to 2030.
According to the International Energy Agency (IEA), Kenya is on track to achieve universal electricity access by 2030, supported by wider electrification, using clean energy sources. Electricity access increased from 37 percent in 2013 to 79 percent in 2023, with urban areas having achieved full access. This was driven by the government’s 2015 Last Mile Connectivity Project. Kenya is expected to connect a further 280,000 households countrywide by the end of the year.
The rapid advancement in access, particularly in rural areas of the country, has been supported by the development of off-grid solar power projects. Solar adoption has been widespread, with Kenya contributing almost three-quarters of all solar home system sales in East Africa in 2023, according to an IEA report from April. It is estimated that one in five Kenyan households now uses solar-powered mini-grids or standalone systems.
The IEA’s Deputy Executive Director, Mary Burce Warlick, stated, “Kenya is showing how the strategic deployment of clean energy technologies and electrification in end-use sectors can significantly improve the lives of millions of the most vulnerable people in the world.”
The Kenyan government recently launched a National Energy Policy, with input from the IEA and other stakeholders. The Draft National Energy Policy (NEP) 2025-2034 incorporates recommendations from the IEA Energy Policy Review. Renewable energy sources, including geothermal, hydro, wind and solar sources, account for almost 90% of power generation, compared to 50 percent in 2000. Kenya is also home to the Lake Turkana Wind Project, the largest wind farm on the African continent. Meanwhile, geothermal energy contributes around one-third of Kenya’s electricity generation capacity.
However, one challenge that must be overcome to transition to green is the ongoing burning of polluting fuels such as firewood, charcoal, and kerosene by millions of households, mainly in rural areas. The government aims to reduce this tendency through the rollout of its Kenya National Cooking Transition Strategy, which aims to achieve universal access to clean cooking by 2028.
Kenya also plans to modernise and expand its electricity grid, following the introduction of new regulations in 2024 to open transmission and distribution networks to private investment, to encourage competition, reduce costs and improve efficiency. In 2023, roughly 23 percent of power was lost in Kenya’s transmission network due to technical issues, theft, and billing problems. The introduction of smart grids and better management systems is expected to reduce these losses moving forward.
In March, Kenya launched a tender for 80 MW of solar power across two 40 MW projects in the south of the country. This follows the announcement by the French Development Agency in August 2024 that it planned to fund a 42.5 MW solar plant around 100 km northeast of Kenya's capital, Nairobi. According to the International Renewable Energy Agency, Kenya had 358 MW of solar power by the end of 2023.
Meanwhile, in July, commercial banks, including the British International Investment, Norway’s Norfund, and the Dutch development bank FMO, bought into a $156 million financing deal for off-grid solar power in Kenya, investing in Sun King operations. This is expected to contribute to the sale of around 1.4 million solar home systems in rural areas across the country. “What makes this work is that we collect small, steady and predictable payments from millions of customers,” said Sun King’s co-founder Anish Thakkar.
By Felicity Bradstock for Oilprice.com
Natural Gas Could Be Angola’s Next Big Money Maker
- Angola is increasingly focusing on natural gas development and exports as its oil production is expected to decline despite recent new oil project startups.
- A recent major natural gas discovery offshore Angola by Azule Energy, a joint venture of BP and Eni, suggests significant untapped gas resources that could boost LNG exports and state revenues.
- The launch of the New Gas Consortium (NGC) project, Angola's first non-associated gas development, is anticipated to be a crucial test for gas monetization in the country.
Angola is betting big on natural gas developments as a short-term increase in oil production is not expected to last despite the West African country leaving OPEC over capped production.
Companies operating in Angola have recently started up two oil projects, but they have also begun to target non-associated offshore gas plays, hoping that a massive gas resource could be waiting to be tapped.
Despite the recent oil project startups, Angola’s oil production is expected to drop to about 1 million barrels per day (bpd) in 2027, from over 1.1 million bpd now, officials at the national oil and gas agency ANPG have told Reuters.
At the same time, natural gas output is set to jump by 2030, per ANPG estimates.
Increased gas output will raise Angola’s LNG exports as developers offshore Africa bet big on natural gas to export to Europe and Asia.
A recent large gas discovery year could be one of many gas plays that could underpin a jump in LNG exports and state revenues from gas.
Last month, Azule Energy, a joint venture of international majors BP and Eni, discovered a major natural gas reservoir offshore Angola in the first gas-targeting exploration well in the oil-producing country.
Initial assessments suggest gas volumes in place could exceed 1 trillion cubic feet, with up to 100 million barrels of associated condensate, Azule Energy said, adding that these results “confirm the presence of a working hydrocarbon system and open new exploration opportunities in the area.”
Azule Energy CEO, Adriano Mongini, commented:
“This is a landmark moment for gas exploration in Angola. Gajajeira-01 is the country’s first dedicated gas exploration well, and its success reinforces our confidence in the potential of the Lower Congo Basin.”
More recently, Mongini told Reuters that “Given that Angola has a couple of prolific basins, I can imagine that we will be able to find much more reserves of gas.”
BP’s EVP production & operations, Gordon Birrell, highlighted the Angola discovery and its potential on the Q2 earnings call.
“Under the Azule brand, we had a discovery in Gajajeira in block 1/14, pretty close to shore, very developable. So West Africa remains an exciting area for us in terms of exploration,” Birrell told analysts.
The exciting gas discovery comes as Angola struggles to materially boost oil production even after exiting OPEC in January 2024, following a spat with the OPEC and OPEC+ members about production quotas.
Angola’s oil production peaked in 2008 at about 2 million bpd. Output has declined in recent years, due to underinvestment in offshore resources due to higher development costs, which have prompted many companies to overlook the African oil producer as an investment destination.
Azule Energy and TotalEnergies started up new oil projects last month, but these may not be enough to offset a decline in maturing fields.
Azule Energy announced at the end of July the successful startup and first oil production from the Agogo FPSO. Combined, the Agogo and the Ndungu fields have estimated reserves of about 450 million barrels, with projected peak production of 175,000 barrels per day, produced via two FPSOs (Agogo and Ngoma).
Also at the end of July, TotalEnergies launched oil production from the BEGONIA and CLOV Phase 3 offshore projects via subsea tiebacks to FPSOs to add a total of 60,000 barrels a day of new production.
Still, Angola’s oil revenues have dropped this year due to falling oil prices. Revenues from oil declined by 4% from the first quarter to $5.6 billion in the second quarter, according to government data. LNG and gas exports meanwhile, earned $755 million in the second quarter.
Now the BP-Eni Azule venture is close to launching first gas from the New Gas Consortium (NGC) project after completing early this year the Quiluma and Maboqueiro offshore platforms in a “significant step forward in Angola’s first non-associated gas development.”
The NGC project is a joint venture between Azule Energy, Sonangol E&P, Chevron, and TotalEnergies.
“Development of (NGC's) Quiluma and Maboqueiro fields, due to launch around end-2025, is the real litmus test for gas monetisation in Angola,” Jimmy Boulter, an analyst at Enverus, told Reuters.
By Tsvetana Paraskova for Oilprice.com
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