Africa's position as the world's hottest oil and gas frontier to be entrenched this year
JOHANNESBURG – The year ahead will be key for the advancement of new exploration and production development projects from West to East Africa in the hydrocarbons market, entrenching the continent’s position as the word’s hottest oil and gas frontier, the African Energy Chamber (AEC) has said.
The year however also brings a new set of dynamics and challenges that could influence the future of the industry, from presidential elections to megaprojects developments, amidst intensifying international competition, the AEC said on Monday.
Developments to watch include Senegal’s SNE field development, where a final investment decision is expected by Woodside Energy and Cairn Energy this year; Niger’s Amdigh oilfield development, where Savannah Petroleum’s $5 million early production scheme is set to start soon; and the opening up of Kenya’s South Lokichar Basin by Tullow Oil, where a decision is also expected before yearend amidst rising tensions with the Turkana local community.
This is also the year to confirm Africa as a global exploration hotspot. Ongoing bidding rounds in key existing and new African hydrocarbons markets will tell if the continent seals its position as the world’s new exploration hotspot and attracts investment in its oil and gas acreages.
Amongst well-established African producers, OPEC members Gabon and Congo-Brazzaville each have ongoing bidding rounds. Gabon’s 12th shallow and deep-water licensing round is set to close in April and Congo-Brazzaville’s License round phase II in June.
Two bigger African producers and fellow OPEC members, Nigeria and Angola, are set to launch landmark and out-of-the-ordinary bidding rounds this year.
"Also attracting interest is the newest and arguably one of the upcoming entrants – Ghana – holding its first formal licensing round set to close in May 2019 which has reportedly got the attention of 16 oil companies, including majors ExxonMobil, BP, Total and ENI," said the AEC.
As a hopeful new East African offshore frontier, Madagascar is also putting 44 concessions on offer until May.
Meanwhile, new entrants in Africa’s hydrocarbons stage are making remarkable advances towards the development of their own floating liquefied natural gas industry.
Last December, BP announced its final investment decision for phase 1 of the cross-border Greater Tortue Ahmeyim development between Senegal and Mauritania, which involves the installation of a 2.5 million tons per year (MTPA) floating liquefied natural gas facility.
It became the third African floating liquefied natural gas project to reach final investment decision after Cameroon’s 2.4 MTPA Hilli Episeyo and Mozambique’s 3.4 MTPA Coral South.
Africa’s comeback on the global oil and gas map is not only due to the vast natural resources found in its soil and waters, but also to the continent being home to mega energy projects set to transform the industry, said the AEC.