Where the Oil Deals are in Africa
Amid the volatility of the price of oil which has doused some sectors of the economy, market optimism remains high in Africa as investors are trooping down to this continent which has great potentials for crude oil and natural gas exploration and production.
While expecting the price of oil to gain more strength, the African market will get more active by the 3Q of this year fuelled with licensing rounds, opening of bids, farm-ins, merger and acquisitions, stepping up of productions. It will be another deal galore in Africa. Here are some of the countries that deal and investment activities will see some increase.
Mozambique: Mozambique 5th licensing round ends and the bids will be opened on April 30th, 2015. The opening of the bids will open up new investment vista in the country which the enormous discovery of gas at the Rovuma Basin gave the Southern Africa a strong pedestal to view the sky as an upcoming major gas hub in Africa. Blocks such as the Zambezi Delta are open for grabs. Mozambique could be having a 6th licensing round within the 3Q 2015.
Ghana: The ENI humongous gas project in Ghana will draw in more service companies into the former Gold Coast including engineering, procurement and construction firms. Ghana is strategically mapping out plans to increase its daily production of crude oil and natural gas. The establishment of Explorco by Ghana National Petroleum Corporation (GNPC) will be a vehicle to help the national oil company partner with serious investors in the development of small fields.
Nigeria: If Nigeria survives the forthcoming presidential election this March, the African number one producer of crude oil and largest economy will become a robust deal centre as more than 25 marginal and small fields including assets been released by mega oil companies such as Chevron and Shell will be out there for grabs.
Senegal: The recent offshore discoveries in Senegal by Cairns and its partners and new discoveries at its border with Mauritania has given Petrosen , the national oil company of Senegal and the nation’s ministry of hydrocarbon impetus to increase talks with avalanche of companies that are now heading to Dakar. Petrosen will be conducting lot of investment promotions.
Angola: Angola is bringing more deep and ultra deep water blocks into the market as part of government’s effort to increase production capacity by 2016.
Uganda: This new frontier market is getting ready for a licensing round that could be announced this summer. After fine tuning its petroleum law and working towards ramping up its relationship with investors, Uganda is ready to open its door to more companies.
Morocco: Morocco is poised to increase exploration and is putting out more than 12 blocks for investors to check out. Exploration opportunities in the Moroccan Atlantic Margin include Blocks C1 and C2 (Safi Shallow Offshore). The Safi Offshore area is located on the most northern part of the North western Africa Continent margin
We will continue in this series “Where the Deals are in Africa” to showcase oil and gas investment opportunities and environment in Africa
Sub Saharan Africa 2015: Oil and gas as the motor for development
Andrew Hayman, the Director of Exploration and Production, Africa at Drillinginfo who is also one of the keynote speakers in the upcoming 8th Annual Sub-Saharan Africa Oil and Gas Conference scheduled for April 29 -30, 2015 at the Marriott Westchase, Houston will review the principal events in oil and gas E&P throughout the Sub Saharan Region in the time period since the “7th Annual Sub-Saharan Africa Oil & Gas Conference” held in Houston in May 2014.
Despite tricky operating conditions in some countries, Africa continues to attract – and reward - oil and gas investment from around the world. But the investment climate has changed markedly; in January 2015, the Brent oil price is at just $50. Clearly this is affecting oil investment decisions across the continent, and projects noted below are under scrutiny. Some may have to await the next upturn to come to fruition; governments will have to be patient.
There have been significant deep-water offshore discoveries in West Africa (Senegal, Cote d’Ivoire) which can be seen as play openers. Cairn Energy and Kosmos Energy are key players in North-West Africa, looking at both the Cretaceous deep water turbidite play and also the shelf-edge Jurassic carbonates.
In Cote d’Ivoire, in the Transform Margin, there are expectations of major commercial success in the deep water, similar to Ghana; this could be both in the Ivorian Basin and the less-explored San Pedro margin. Cote d’Ivoire’s ultra-deep water licensing round is attracting new players including ExxonMobil. Ghana, meanwhile, is stealthily becoming a major African oil producer.
Nigeria, the giant of the Gulf of Guinea, has been sleeping for the last few years; we expect that, when the Petroleum Industries Bill is passed in 2015, and after the Presidential Election, investment will flow into exploration projects again. Nigerian independents such as Oando and Camac are changing the landscape and are becoming major players where the IOCs have consolidated their portfolios.
Namibia is still in the early stages of E&P and there have been multiple farm-in and farm-out deals (with the big IOCs coming in); this has been accompanied by tranches of seismic data made available by different multi-client companies.
In Angola 2014 has the Year of the Pre-Salt in the Kwanza basin, with multiple deep-water tests. Results so far have been mixed. Licensing results from the Onshore Bid Round are also to be announced. In Congo (Brazzaville), Italian Eni has made some huge pre-salt discoveries, which will be very profitable.
Across in East Africa, Kenyan discoveries, while encouraging, are so far sub-commercial, but optimism is high, both for the Miocene Reef Play and the Eocene clastics.
Mozambique’s Fifth Round Announcement in London in October attracted some 350 industry representatives – surely a record. Mozambique’s industrial sector is being transformed by the Rovuma Basin LNG mega-projects underway, but the other sedimentary basins are scarcely scratched, and new oil and gas projects will contribute to national development.
With NOCs offering licensing rounds in several other countries in the region to stoke up the interest, it’s clear that oil and gas is powering Africa’s development.