Interest in oil & gas in sub-Saharan Africa grows

BY AGENCIES

INTEREST in oil and gas reserves in sub-saharan Africa is growing, and new discoveries are set to revitalise the region's economic prosperity and substantially increase growth and development in the oil and gas sector.

Adi Karev, Global Leader of the Oil & Gas Practice for Deloitte Touche Tohmatsu, is fiercely optimistic about the outlook for the oil and gas sector in the region.

"The responsible exploitation of oil could be a game changer for sub-Saharan Africa," said Karev. "But for this to be a success, there needs to be a significant and 'mature' buy-in from the region's governing elite."

Karev pointed to a number of opportunities to exploit the massive potential, such as joint ventures and partnerships, particularly for South Africa.

"Africa is risky, both geographically and politically, so joint ventures are a way to manage the risks," Karev noted.

With Africa poised to be the 'next oil growth story', the significant opportunities will fall under the spotlight at the Oil & Gas Africa Conference, which takes place on March 14 in Cape Town. Conference topics will revolve around the theme, 'Outlook for sub-Saharan Africa and new opportunities'.

While Angola is best known for its oil industry in the region, Namibia is attracting significant attention from the oil industry. Last year prospectors discovered an estimated 11 billion barrels of oil reserves around the country's southern coast.

 

More recently, American and Italian exploration companies have found a natural gas deposit equivalent to over four billion barrels of oil off the coast of Mozambique. The southeast African country is now being described as the world's newest 'petro-state'.

Over the past 20 years in Africa, new oil field discoveries have increased by over 25%, and gas field discoveries by over 100%.

By 2035, China will be responsible for most of the 36% increase in global energy demand, according to the International Energy Agency. This brings opportunities for SA.

"South Africa can bring execution to projects, most notably from energy giant Sasol. There is also potential for ventures with South Africa's national oil company, PetroSA," added Karev.

Anton Botes, Karev's colleague at Deloittes, supports his views. Addressing delegates at Deloitte's Energy and Resources Predictions 2012 briefing recently, he noted that Cape Town has already emerged as a services hub.There is also potential for other South African ports, as well as Namibia's Walvis Bay, to more fully exploit the services opportunities that will arise from the ongoing expansion of oil exploration and production activities off the coast of West Africa.

"Oil companies make use of specialist suppliers to provide technology, maintenance, engineering, parts and logistical services," continued Botes.

"We believe that over the coming five to ten years, there will be tremendous growth in the area of oilfield services as a sub-industry, servicing the huge amount of activity up the west coast of Africa," Botes said.

"Africa's rich oil ?elds and the prospects of more discoveries have transformed the continent into an important player," says John Victor, a Director of Fair Consultants SA, organisers of the conference.

"The region is a key target for global oil production and resource extraction. The new oil and gas discoveries off the east and west coasts of southern Africa is focusing world attention right here, right now," he concluded.