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

    Clinton, Trump and the 'Woman’s Card'

    Ask supporters of Democratic front-runner in US presidential campaign, and they’ll tell you Republican presidential candidate is playing a dangerous hand

    Russian Censorship Group Seeks Chinese Help to Better Control Internet

    At recent Safe Internet League forum in Moscow, speakers from both nations underscored desire for authorities to further limit and control information online

    Video Makeshift Pakistani School Helps Slum Kids

    Free classes in Islamabad park serve a few of the country’s nearly 25 million out-of-school youths; NGO cites ‘education crisis’

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Turkish Kurd Islamist Rally Stokes Tensionsi
    X
    April 29, 2016 12:28 AM
    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Turkish Kurd Islamist Rally Stokes Tensions

    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.

    Special Report

    Adrift The Invisible African Diaspora