Hydrocarbon production across 21 Sub Saharan countries are poised to increase by 28% by 2025, riding on the back of appreciable growth in production of two major oil-producing countries in the region-Nigeria and Angola. However, the production for entire Africa is expected to fall by more than 20%, according to the estimates prepared by African Energy Chamber titled as African Energy Outlook -2020.
The African Energy Outlook -2020 assesses the important developments in major African oil and gas producers in all segments of energy production. It also offers major insights into the growth potential of the industry taking the combined generation, distribution, and transmission of both the public and private sectors.
The report calls for sustained fiscal reforms to attract capital and technology into exploration in the continent. From Senegal to Somalia, there will be hundreds of blocks auctioned for exploration in the coming years. This would let loose fierce competition to attract capital from North America, Europe, Russia, China, India, South East Asia and the Middle East. Against the backdrop of several countries in Africa tweaking their legal and fiscal framework to incentivize exploration, it is expected that the hydrocarbon sector would witness hectic activities. One of the countries that have built-in some attractive incentives for the exploration is Gabon. That country is expecting hordes of investors flocking to avail the facilities. The outlook says that countries, which are following a pragmatic and sustainable approach, can make most of the investments. In the process, there will be winners and laggards.
The Outlook also lists investors’ concerns over uncertain fiscal terms in sub-Saharan Africa. It calls on governments to find better ways to match their expectations with that of investors by drawing up a package of short, medium and long term attractive investment projects in exploration, where the risk factor is very high.
Africa presently is the world’s hottest exploration frontier, with several discoveries made recently. One among them is off the coast of Mauritania by Kosmos Energy. The other discoveries in that league and range are by Noble Energy in Equatorial Guinea, or the Springfield Group in Ghana.
Africa has the highest exploration success rates in the world. There are basins where the success rate is almost 100%. The explorers feel that with a better regime of the legal and fiscal framework, more and more explorers will be coming to Africa investing billions of dollars.
