LONDON, 11 February 2021 – Countries heavily reliant on oil and gas for state revenue could see a drop of 51 percent in government revenue from the sector by 2040.
African oil and gas-producing countries will also bleed billions of dollars as the world cuts back on fossil fuels, the London-based think tank, Carbon Tracker, warned Thursday in a new report.
According to the report, gas and oil producing nations worldwide will record a cumulative total revenue loss by 2040 estimated at $13 trillion, in 2020 dollars.
Titled “Beyond Petrostates”, the report lists seven countries, including Angola, Equatorial Guinea and South Sudan, whose revenues from oil and gas are predicted to drop by at least 40 percent by 2040.
The report lists another dozen countries, including Algeria, Chad, Congo Republic, Gabon, Libya and Nigeria, whose revenue is projected to fall by between 20 percent to 40 percent by 2040.
The report focuses on the 40 countries with the greatest fiscal dependence on oil and gas revenues – the petrostates.
It outlines how potential changes to supply and demand will impact the future of fossil fuel-exposed companies and projects, encouragesoil-dependent African countries to diversify their economics as a matter of urgency.
It points notably to heavily populated countries like Nigeria (206 million inhabitants), Algeria (43 million) and Angola (33 million), warning of the devastating impact of social unrest that could hit these countries as revenues nose dive and government programs are forced to shutdown from lack of funding.
The African continent is home to five of the world’s top 30 oil-producing countries, but the continent’s production was down to 7.9 million barrels per day in 2019 from nearly 10 million barrels a day between 2005 and 2010.
Africa’s top five oil and gas producers are Nigeria (two million barrels per day), Angola (1.8 million barrels per day), Algeria (1.7 million barrels per day), Libya (1.5 million barrels per day) and Egypt (630,000 barrels per day).
According to its website, Carbon Tracker is an independent financial think tank that carries out in-depth analysis on the impact of the energy transition on capital markets and the potential investment in high-cost, carbon-intensive fossil fuels.