EXPLORATION: Oil & Gas To Drive African Growth
Recent Western Cape Business News
Its recently released report, “Africa oil and gas: a continent on the move”, confirms that resources generally, and oil and gas in particular, have played an important part in this growth. Nineteen African countries are significant producers of oil and gas, with significant new discoveries in Ghana, Tanzania, Mozambique and Uganda adding some new names to the established producers like Libya, Nigeria, Angola, Egypt, Algeria and Sudan.
“Investors are seeing huge potential in the African oil and gas,” says Elias Pungong, African Oil and Gas Sector Leader for Ernst &Young. “There are some risks in Africa, we all know that, but the returns are commensurately high.”
“And what’s particularly exciting is the steady stream of new discoveries in countries like Uganda and Ghana, and prospected fields in others, including Mali, Sierra Leone and Kenya.”
African oil supply, including crude oil, lease condensates, natural gas liquids and other liquids, has increased sharply over the past years, averaging just less than 11 million barrels per day in 2010.
Conventional forecasts see this growth being maintained, albeit more slowly, over the coming 25 years. Gas growth is predicted to be even stronger, with supply possibly set to double to about 15 trillion cubic feet (tcf) by 2035.
“Less conventional estimates predict that the likely growth in the African oil and gas industry could be five times the current level, based on what remains unexplored in Africa versus currently known sub-soil assets,” Pungong adds. “Whatever view one takes, it’s clear that this is a sector with tremendous potential.”
This potential can be seen in the International Energy Agency’s recent World Energy Outlook, which estimates that African oil and gas supply infrastructure will require $2.1 trillion between 2010 and 2035 - outstripping what will be invested in the Middle East, Latin America or even Asia during the same period.
The focus of this investment is likely to be in the upstream sector, where profits are highest, Pungong believes.
“Africa’s increasing attractiveness as a growth investment is enhanced by the vigour of its burgeoning oil and gas sector,” says James Newlands, who heads up Ernst & Young’s Africa investment team.
“It’s significant that a professional services firm like Ernst & Young, who have been operating in Africa for more than 160 years, is also investing heavily in its African business network - we’re doing so to meet a growing demand for our services as clients move into this new market or expand existing operations.”
Business News Sector Tags:
Fax 2 Email
Study IT Online
Work from Home