WATCH: Low oil price environment forcing African producers to sharpen their competitive edge - report
JOHANNESBURG - A soon-to-be released comprehensive overview of the oil and gas sector across sub-Saharan Africa will show that the low oil price environment is forcing producers to sharpen their competitive edge, the African Energy Chamber said.
The report says the governments of Angola, Gabon and Cameroon have implemented reforms and Nigeria could be next, with at least six oil projects announced in the west African country with a combined output potential of 837,000 barrels per day (bpd) and capital expenditure (capex) of US$54 billion which could be brought on-stream over the next decade.
"A favourable regulatory and fiscal environment are essential to delivering that investment," the African Energy Chamber said, citing key insights from the report.
"IMO 2020 regulations will yield increased Asian demand for west African crude,"it added, referring to the International Maritime Organisation's ruling that from January 1, marine sector emissions in international waters be slashed. The marine sector will have to reduce sulphur emissions by over 80 percent by switching to lower sulphur fuels.
The chamber noted that nearly 75 percent of the 461,000 bpd of heavy sweet crude ideal for producing low-sulphur bunker fuels was from West Africa.
The upcoming report includes production forecasts for 21 sub-Saharan African countries from 2019 to 2025, produced by Global Data, which show that total oil and gas production is expected to increase nearly 28 percent by 2025.
Nigeria and Angola will continue to dominate but their share of regional production will fall by more than one fifth to 58 percent, driven in part by significantly increased output from Mozambique, Senegal, Mauritania and Tanzania.
The report notes that there are currently nine oil projects under construction across the region with a combined peak production total of 256,000 bpd and investment of $16.2 billion. A further eight gas projects are also under construction, with combined capex of $44 billion.
"African producers are positioning themselves to maximise from a gas boom expected for the next decade," the African Energy Chamber said.
- African News Agency (ANA)