Offshore staff
LONDON – Sub-Saharan Africa’s largest producers in Nigeria and Angola face declining crude oil and condensate production from this year onwards, according to GlobalData, with only a small number of new projects set to come online in the next five years.
Oil and Gas analyst Conor Ward said: “Sub-Saharan Africa has so much potential. It could easily overtake Europe in regional oil and gas production if utilized properly.
“However, companies have been more cautious than ever over their investments. Some of the huge discoveries made over the past decade have seen significant delays with no final investment decision (FID) in sight: as is the case with Shell’s Bonga Southwest/Aparo, which was discovered over 20 years ago.”
As the European majors seek to reduce their carbon emissions, they are moving capital away from oil-heavy developments to more gas-intensive, lower-carbon projects.
GlobalData expects Sub-Saharan Africa’s gas production, which currently accounts for 22% of the region’s total output, to grow by around 30% by 2025, and starting to outstrip crude oil and condensate.
But this forecast is based on multiple projects developments that have not yet reached FID.
“Sub-Saharan Africa is seeing a shift of investment away from the more developed countries in the region,” Ward said, “most notably Nigeria, and more towards frontier countries such as Mauritania, Senegal, Mozambique, and Uganda as the fiscal terms offered by the host countries are far more appealing and have a large untapped resource base.
“If Nigeria wishes to continue to attract investment and achieve a plateau in production, it will need to tackle the above ground risks which companies face.”
08/06/2021
