In conversation with…. Mario Bello, Head of Sub-Saharan Africa Region, Eni
Ahead of the Africa Energies Summit, we caught up with Mario Bello to discuss the supermajor’s African track record, current activity and future plans.
Mario Bello
Eni has operated in Africa since 1954, has operations in 14 countries and continues to invest while others reduced their presence on the continent in favour of other parts of the world. How important is Africa in the Eni global portfolio?
Africa is central to Eni. It’s the continent where we took our first steps out of Italy and where the cornerstones of our business models were established. In Africa we are present in fourteen countries where we produce more than half of our total hydrocarbon production. More than half of our oil and gas reserves are on the continent, and more than fifty percent of our upstream capex has been consistently invested in the region over the last six years.
The continent remains central to our exploration and agile development strategy with a focus on gas where, thanks to a long tradition of developing gas projects to supply domestic markets, we have a competitive pipeline of projects which has allowed us to provide a concrete, rapid and effective response to today’s complex energy security needs.
In Sub-Saharan Africa, we also started new business to face transition challenges, developing an integrated value chain to produce feedstock for biofuels, with production starting in Kenya last year and soon to expand to other countries. This allows us to integrate Africa in the biofuels value chain as well.
Eni also invests in renewables, with photovoltaic projects in Angola, Tunisia, Algeria, and Egypt.
Does this long-term commitment to the Continent set you apart?
As our CEO recently said, Eni invested a lot in Africa at a time when many other peers chose to invest in shale gas instead, and while Europe deepened its reliance on Russian supplies. Our footprint in the region meant Africa was the first port of call for Eni in 2022 as we sought to replace the gas that Italy and Europe previously imported from Russia.
Eni’s activities in Africa are based on a proactive and long-lasting collaborations with local authorities and partners. These range from meeting demand from increasing local consumption and supporting local energy mix efficiency and modernisation, to cultivating our position as a leader in a changing sector that is experimenting with new forms of energy.
As concerns around energy security become more urgent on both sides of the Mediterranean, Eni will play a leading role with local partners in many projects, working together to lead the continent towards a safer, more sustainable and fair future.
What is Eni’s impact on the Continent in exploration terms?
Exploration will continue to be an important driver for organic growth; supporting future production and energy security, with investments and initiatives mainly focused on gas and so-called "advantaged barrels". By advantaged barrels we mean resources in proven basins, close to areas where we are already present, which reduces risk. This way, once reserves are discovered, we can exploit synergies with existing infrastructure and ensure faster time-to-market and lower development costs. For this reason, our exploration will mainly focus on proven geological basins in North and West Africa.
Can you give us a brief update on your Upstream strategy in key African countries?
In Africa we are seeking to reinforce our upstream portfolio while promoting a circular economy model that is respectful of the planet and supportive of local development. To this end, upstream remains at the core of our strategy.
Our distinctive upstream model firstly leverages our successful exploration, which will be increasingly focused on gas and advantaged barrels, ensuring reliable, fast production, and supporting energy security.
And secondly, our model leverages the ability to move quickly to development through a model based on the parallelisation of phases, a modular development approach, and insourcing the critical project phases where our expertise can be applied. The combination of these elements has consistently reduced time-to-market from discovery to production, which is now 3.5 years on average, and lowered development costs - making Eni the top performer in the region.
An example of our strategy in practice is the Coral Sul FLNG project in Mozambique, which was made possible by leveraging our ability to deliver on time and on budget despite the effects of the pandemic. It saw its first cargo of LNG from the Coral field shipped in November 2022. The project represents a significant milestone in the global LNG market and positions Mozambique as a significant new LNG hub.
Which countries in Africa are going to be key to your portfolio going forward?
Besides Egypt and Algeria - our leading countries in terms of equity production - 2023 will see new projects in Cote d’Ivoire, with Baleine phase 1, and in Republic of the Congo, with Congo LNG.
We will continue our development programme in Algeria, where we recently expanded our portfolio though the acquisition of bp’s business, including In Amenas and In Salah, two gas production concessions operated jointly with Sonatrach and Equinor.
In 2024 we expect further development in Egypt and Cote d’Ivoire, with Baleine Phase 2. At the same time, we expect to approve a number of high-quality FIDs in Libya, Cote d’Ivoire and Mozambique. Lastly, business in Angola continues to be extremely relevant to Eni; this is why we established Azule Energy, a 50/50 independent joint venture that groups Eni and bp’s Angolan activities. The JV is now Angola’s largest independent equity producer of oil and gas.
Azule Energy boasts a strong pipeline of new projects that are scheduled to come on stream over the next few years, growing organically from exploration discoveries. These include the Agogo Full Field and PAJ oil projects in Blocks 15/06 and 31 respectively, and the New Gas Consortium (NGC), the first non-associated gas project in the country, which will support the energy needs of Angola’s growing economy and strengthen its role as a global LNG exporter.
Eni’s gas strategy favours supplying Africa’s domestic needs. Can you tell us about this?
Natural gas is an important element to support the energy transition and at the same time ensure an effective response to growing energy demand. The gas component will become increasingly dominant in our production mix in in Africa.
There are, in Africa, significant gas resources. This is important to the whole continent where demand for energy is expected to significantly increase over the next two decades, but it’s also important for the rest of the world.
Developing gas in Africa is not new for Eni; we have a long-established history of gas-development projects in the Continent. We supply gas to domestic market in many of the countries we operate as it occurs in Egypt, Libya, Algeria, Congo, Ghana, Nigeria and shortly will also happen in Cote d'Ivoire, as we have just seen for the Baleine development.
The supply of natural gas to domestic market for power generation, besides being a commercial opportunity, has been historically one of Eni's key contributions to the socio-economic development of the countries where we operate.
We have an important portfolio of low carbon gas projects which is now giving us the opportunity to valorise the excess gas not used by the domestic market. Thanks to this unique portfolio of projects, we have been quick to respond to the calls for diversified gas supplies and to deliver gas to Europe both through existing pipelines and as LNG.
What measures is Eni taking to develop ‘net zero’ hydrocarbons on the continent?
The use of natural gas to improve energy access is part of our commitment to the United Nations’ Sustainable Development Goals (SDGs). A lower-impact energy mix of gas and renewables is part of our energy access projects in all countries in which we operate - particularly in sub-Saharan Africa, where more than half a billion people do not have access to electricity despite the wide availability of energy sources.
Eni is fully committed to reach net zero across Scope 1, 2 and 3 by 2050. The progressive reduction of routine flaring is one of the pillars of the emissions reduction strategy related to upstream, with the aim of phasing it out by 2025. Over the last 10 years, Eni has drastically reduced the quantity of gas flared through the implementation of a series of upstream and downstream projects, reducing flaring by using the associated gas to generate power, for domestic and export gas markets.
Eni is also a key investor in African renewables. Can you give us an insight into these key projects?
Africa is growing and so is its need for energy. According to the UN, more than half of the world’s population growth between now and 2050 could occur in Africa. This, along with the continent’s rapid industrialisation, represents an unparalleled opportunity for the expansion of climate-friendly renewable energy solutions.
According to the International Renewable Energy Agency (IRENA), Africa could meet nearly a quarter of its energy needs using indigenous, clean, renewable energy.
We are mainly contributing to decarbonisation on the continent through our gas development, as we consider gas essential to both energy security and emissions reduction. Elsewhere we are working in Africa on two main paths: renewables and biofuels, which are used as alternatives to traditional fuels and are key to energy transition in the transport sector.
Africa also has tremendous capacity to generate solar power. To harness this renewable and cheap source of energy, Eni has recently begun production in a solar plant in Tunisia.
Solar power is a key element of our strategy to decarbonise upstream activities; in line with Eni’s global net-zero strategy and as part of a wider decarbonization plan to promote the development of renewable energy sources in Algeria.
In November 2022 we laid the first stone of our second 10MW photovoltaic plant in Bir Rebaa North (BRN) in the Berkine basin and inaugurated a Solar Lab open to universities and other public institutions for research purposes. It will be followed by another PV facility at the Menzel Ledjmet East (MLE) production complex, also in the Berkine Basin, whose construction is expected to begin in 2023. Eni is also finalising the construction of a solar plant in Angola through Azule Energy. Finally, in Egypt, we are nearing completion of the first phase of the 15MW Abu Rudeis solar plant, connected to Eni’s facilities, and are discussing a series of initiatives in solar and wind energy with the Egyptian government.
With regards to biofuels, Eni’s distinctive model uses used cooking oils and agri-feedstock produced from degraded, polluted or abandoned land which does not affect the food supply chain. The vegetable oil produced in Eni’s agri-hub in Kenya began feeding our biorefining system in 2022, and we plan to expand the supply chain by building other agri-hubs and expanding to other countries too, beginning in Congo. As part of the model, the by-products of the processing of biomass are also used as fodder or fertilisers.
Lastly, Mr Bello, what Eni project on the continent are you most proud of?
It’s impossible to rank them. Each one has an important impact on Eni's strategy, on the country in which it is implemented and on that country’s population. I can mention Congo LNG, as it is the most recent. It represents the country's first natural gas liquefaction project and one of Eni's core supply diversification initiatives. The project is expected to reach an overall liquefied natural gas (LNG) production capacity of 3 million tons per year (approximately 4.5 billion cubic meters/year) from 2025.
Congo LNG will exploit the huge gas resources of Marine XII, fulfilling the country’s power generation needs while also fuelling LNG exports, and supplying new volumes of gas to international markets, primarily Europe.
Another project I’d like to mention is Baleine, in Ivory Coast. It is the largest discovery ever made in the country and will be the first ever net zero emissions (scope 1 and 2) development in Africa. Production start-up is expected in June this year, less than 20 months from discovery which represents a record time for a deep-water project. It will contribute significantly to Cote d’Ivoire energy security suppling the associated gas to domestic market. The project confirms Eni’s commitment to generating value, whilst reducing its carbon footprint and focusing on improving time-to-market. I must confess that we are very excited about it.
