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

For Lebanon-based Refugees, Desperation Fuels Perilous Passage

In a war that has caused an estimated three million people to flee Syria, efforts to make perilous sea journey in search of asylum expected to increase More

South African Brewer Tackles Climate Change

Mega-brewer SAB Miller sent delegates to climate summit in Peru, says it is one of many private companies taking their own steps to fight climate change More

Indonesia Reports Increase in Citizens Joining Islamic State

Officials say more than 350 of its citizens are now in Syria or Iraq to fight with Islamic State - 50 more than last month More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Will Pakistan School Shooting Galvanize Pakistan Against Extremism?i
X
Ayesha Tanzeem
December 17, 2014 11:54 AM
The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.

All About America

AppleAndroid