Monday, August 8, 2022
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Home Tech Oil & Gas Play A Vital Role Across Africa, Says EY

Oil & Gas Play A Vital Role Across Africa, Says EY

by Caroline Vutagwa
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oil

 

Resources generally, and oil and gas specifically, have played an important role in the African growth story. As African countries continue to increase their production of oil and/or gas, revenues from higher prices and the investment that new discoveries are attracting have made a key contribution to growth and developmental initiatives. This is according to EY’s latest report, Oil & Gas: driving sustainable growth,

As of the end of 2013, according to the Oil & Gas Journal, proved African oil and natural gas reserves are estimated to be almost 228 billion barrels of oil-equivalent (boe). Total reserves are up sharply from the 2012 total of 213 billion boe, due largely to revisions in proved gas reserves.

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Source: US Department of Energy, US Energy Information Administration and Oil & Gas Journal

 

Elias Pungong, Africa Oil & Gas Sector Leader says, “Africa has continued this impressive upward trajectory, led by game-changing opportunities in Eastern Africa with Mozambique, Tanzania, Kenya and Uganda leading the way. However, other regions haven’t been left behind as we have also seen significant finds in the West Africa Transform Margin and Deep Waters along the West African coast.

We expect this trend to continue, mainly driven by Eastern Africa: both with proven and exploration assets in countries like Mozambique, Tanzania, Uganda and Kenya for proven assets and Ethiopia, Madagascar and the Seychelles for exploration assets. South Africa would become increasingly important with significant exploration activities and we expect to see results during the back end of 2014 and early 2015.”

African drilling activity accounts for a relatively small portion of the global industry total — typically ranging between 4–7% of the global total. However, beginning in late-1999 drilling activity has increased fairly steadily, except for the brief, but sharp downturn following the collapse of oil and gas prices in late-2008. As of the end of 2013, Baker Hughes reported 138 active rotary rigs in Africa, out of a global total of 3478 rigs. Rig activity in Africa is dominated by land drilling, but in recent years, offshore activity has notably increased, particularly off West Africa.

Accompanying the sustained growth in the upstream segment of the African oil and gas industry is strong growth in the associated midstream and downstream ‘infrastructure’ parts of the business — terminals, storage capacity and, most critically, pipelines and refineries. New infrastructure may be necessary particularly where new production is “land-locked” as in Chad, South Sudan and Uganda or to increase refining capacity where current capacity cannot satisfy domestic or regional demand (as in Nigeria and Uganda).  The most significant infrastructure will be in East Africa where massive liquefaction plants will be needed to liquefy the natural gas for export to global markets.

The majority of reserves and production remains concentrated in six countries — Nigeria, Libya, Algeria, Angola (oil), Sudan (oil) and Egypt (gas). However, there have been ever increasing discoveries of new oil and gas (for example, in Ghana, Tanzania, Mozambique and Uganda) and prospected fields in many countries (including Sierra Leone, Mali and Kenya).

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