Oil and Gas continues to play a vital role across the African Continent

Oil and Gas continues to play a vital role across the African Continent

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.

African oil and gas proved reserves (1990–2013)

 oil and gas in africa

 Exploration and drilling activity

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.

Other oil and gas activity

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.

Locations of growth

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).

There are significant challenges, which remain for the sector and which are slowing down rapid development, particularly in terms of infrastructure that typically requires significant amounts of funding, however the potential rewards and opportunities outweigh the challenges.



For more reading