News / Africa

Africa's Oil, Gas Frontiers Set to Boost Supply

An oil processing facility is seen at an oilfield in Unity State, South Sudan, April 22, 2012.An oil processing facility is seen at an oilfield in Unity State, South Sudan, April 22, 2012.
x
An oil processing facility is seen at an oilfield in Unity State, South Sudan, April 22, 2012.
An oil processing facility is seen at an oilfield in Unity State, South Sudan, April 22, 2012.
Reuters
New producing countries are set to redraw sub-Saharan Africa's oil and gas map over the next five years, contributing to a significant net increase in output and attracting the top global companies.

Today, the region's heavyweight producer nations, Nigeria and Angola, together pump around four million barrels per day [bpd] of crude oil, and they also dominate natural gas output. Only a handful of other countries in the region produce more than a couple of hundred thousand barrels of oil and gas equivalent.

A few years from now, the balance could be very different. A decade of high prices, good terms for exploration drillers from governments increasingly open to business, and better seismic techniques for finding deposits have lengthened the list of African nations that are on the brink of production.

Uganda, Kenya, Ghana and Niger are among those that could see new fields producing more than 100,000 bpd of oil by the end of the decade. Mozambique and Tanzania are looking for gas and planning compression plants to liquify it for shipping to Asia.

By 2018, sub-Saharan Africa could be producing an extra 400,000 bpd of oil, according to consultants Wood Mackenzie. That would, for example, almost meet the demand of wealthy Sweden and Denmark together - 15 million people - and would increase the sub-Saharan region's total crude output to 6.6 million bpd.

Natural gas output this year is about 6.8 billion cubic feet per day (bcf/d), or 70 billion cubic meters annually, enough to supply the gas needs of Italy or Germany. Production should top nine bcf/d by 2018 and reach 12.7 bcf/d by 2023, Wood Mackenzie estimates.

At present, some two thirds of sub-Saharan Africa's gas is exported as liquefied natural gas [LNG] from Nigeria, Angola and Equatorial Guinea.

Big players

Until recently, the largest companies in such states seen as being on the "frontier" of the industry included the likes of African exploration specialist Tullow Oil, mid-ranked international groups such as Anadarko and ENI, and smaller exploration players such as Ophir Energy, Kosmos, Africa Oil and a host of others.

Lately though, global heavyweights like Chevron and Total have become involved.

"The supermajors are looking at the success that some of these companies have had, and they're trying to get in on the ground floor, picking up the exploration acreage at an early stage and working with that all the way up to drilling the prospects," said Martin Kelly, Wood Mackenzie's lead analyst on sub-Saharan Africa.

In the past couple of years, Chevron has taken up exploration blocks in Liberia and Sierra Leone, while Total has new acreage in deep water off Kenya and deepwater blocks in Mozambique. Royal Dutch/Shell is prospecting deepwater acreage off Tanzania with Petrobras. Exxon Mobil, Shell, and Total all are exploring in the waters off of South Africa.

"There's a bit of a land-grab ongoing by the supermajors," said Kelly.

Political risks from unforeseen government action remain, as Heritage Oil discovered when Uganda presented it with a heavy tax bill when it sold up in the country. Research this week from Credit Suisse re-assesses recent deals in the light of possible tax demands, though, and says valuations still look strong.

And broker, RFC Ambrian, lists association with industry heavyweights as a bonus for small explorers in the region: "The potential for new petroleum discoveries in sub-Sahara Africa is being underestimated by equity markets," it said.

New Production

One of the big recent finds, the offshore Jubilee field, already is producing 110,000 bpd for Ghana and Tullow, a company which has become Europe's number one oil and gas independent thanks to developments in 16 sub-Saharan countries.

Also in Ghana, Ghana and Tullow said the Tweneboa, Enyenra, Ntomme [TEN] cluster of fields could be processing some 80,000 barrels a day initially once it gets Ghanaian government approval.

In Congo Republic, a modest producer already, Chevron made its final investment decision last month on the $10 billion deepwater Moho Bilondo and Moho Nord projects. These are set to deliver their first oil in 2015, and to peak at 170,000 barrels a day in 2017.

In Uganda, Tullow has recruited France's Total and CNOOC of China to develop oil. Discussions with the government over the size of an associated refinery have caused delay but plans for a 200,000 bpd pipeline that could link up with more  potentially productive wells in Kenya show its potential.

Niger, whose main international partner is China's CNPC, hopes to be producing from its Agadem block early next year, with output ramping up to 80,000 bpd.

As for today's big two producing states, Nigerian output has fallen from 2.5 million bpd in 2011 to slightly more than two million today, as theft and technical troubles plague producers. Off Angola's coast, however, Chevron last year sanctioned the $5.6 billion Mafumeira Sul field, which plans to be pumping by 2015, with maximum output estimated at 110,000 bpd.

Wood Mackenzie's oil output projections have the region's overall production in decline once more after 2018, but Kelly said this could be a function of conservative modeling.

Certainly there is no shortage of ambition, as demonstrated by Tewodros Ashenafi, an Ethiopian driller who was in London this week looking for $100 million of financing.

He sees his country as a potential 400,000-bpd producer based on geology that crosses the Red Sea from the oil-rich Middle East, and he believes the rise of indigenous companies like his privately held SouthWest Energy could be the next corporate wave for the region.

"That trend is something that's on the uptick," said Ashenafi. "We've been approached by a number of African governments to come and explore."

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs