The majority of new oil and gas finds over the next three decades are likely to be in Africa, experts believe.
However, Africa would do well to introduce more licensing rounds to explore this huge untapped potential, says Magnus Nysveen, Head of Analysis at energy intelligence firm Rystad Energy.
Speaking at a panel discussion ahead of African Energy Week, which runs from November 4 to 8 in Cape Town, Nysveen said the past three to five years had seen the continent introduce 300 million barrels of oil per year, while replacing 10% of existing production with new projects.
“We underestimate the resources Africa has,” Nysveen said.
“Risk is overestimated by global investors and there are little licensing activities. Africa needs to capitalise on the massive capital being brought in by the small E&P firms, as well as by the majors to unlock its full potential.”
85% of growth within the oil and gas sector is expected to take place outside of the ‘developed’ economies, Ibitola Ukabam, Associate VP at Africa Finance Corporation, highlighted during the panel discussion.
Ian Cloke, COO at Afentra, said Africa was attracting investment by prioritising a just energy transition, unlike the North Sea, where investment has become increasingly unfeasible in the past 15 years.
“Angola has the most stable fiscal terms. The creation of enabling environments onshore in Nigeria, Libya and South Sudan can fast-track project rollouts,” Cloke added.
Rystad Energy Vice President Pranav Joshi said that TotalEnergies’ investment decision on the Venus prospect in Namibia, as well as Mozambique’s Area 4 project, would drive new investments and production growth in Africa in the coming years.
However, with deep water projects and supply proving secure globally, global corporations would need to invest in local infrastructure to match their export agenda.
IOL