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Africa’s Oil and Gas Exploration is looking bright – AEC Outlook

As Africa’s untapped huge oil and gas potential continues to send strong signals across borders worldwide, increasing investment in upstream exploration to unlock this full energy potential becomes, as always, a crucial challenge the Continent must pursue aggressively. Increasing therefore exploration activities across Africa will be one key issue to take the centre stage at the upcoming annual conference, African Energy Week scheduled to take place from 18 to 21 October 2022, in Cape Town, South Africa.

According to the African Energy Chamber Q1 2022 Outlook, “The State of African Energy,” supply from legacy oil and gas fields across Africa is sharply on the decline, which has also resulted in the decline in production, thereby creating a dire need for the increase in exploration activities, also a sine qua non for addressing Africa’s energy poverty, geared towards establishing itself as a global energy hub.

According to the report, 2020 saw the second lowest discovered volumes in the past decade, with 2021 revealing even lower volumes. In addition to under-investment in exploration, the impact of the COVID-19 pandemic further crippled the sector from 2020, leading to delays in the approval of exploration projects which also left most of the offshore rigs idle in Angola for instance, a case which was only possible during the civil war years, according to the report.

Adding however that discoveries made in Angola, South Africa, Ghana, Gabon and Egypt improved Africa’s oil and gas portfolio in 2019 whilst the Luiperd gas-condensate discovery offshore South Africa supported the 2020 portfolio of that discoveries made. Noting that in 2021, Africa recorded a further 30% drop in discovered reserves volume, a state which could have been made worse without the Baleine discovery in Cote d’Ivoire.

The report further notes that 2022 will be a much more encouraging year with nine high impact wells in the drilling schedule as exploration activities will include a mixture of majors, independents and local firms drilling high impact wells. The activities will include Shell Plc’s high-profile well offshore Namibia, which the major has already started drilling; Italy’s Eni conducting exploration at its Mlima-1 wildcat block in Kenya; and TotalEnergies’ exploration activities on the Venus prospect, in which the company, the report notes, has already made a sizeable discovery of light oil with associated gas. In 2023, ten additional high-impact wells will be drilled with majority of them sited in unexplored basins in East and West Africa.

“We anticipate an increase in exploration activities as the year progresses and as producers realize the potential of the region’s oil and gas in meeting global energy demand. Current trends within the oil and gas industry could lead to the establishment of new centers of geopolitical influence, a development that could see massive amounts of investment for exploration heading towards Africa,” stated Leoncio Amada Nze, President at African Energy Chamber CEMAC.

Again, licensing rounds which have been delayed in countries like Angola, Equatorial Guinea, Ghana, Gabon, and Congo due to COVID-19 are expected to be finalized and announced in 2022. Egypt, one of the countries, was able to open a licensing round, and managed to close bidding that saw the award of eight oil and gas exploration blocks to Eni, BP, Apex International, Energean Egypt, United Energy, Sipetrol, and INA.



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