Africa’s leading oil producers Nigeria and Angola will dominate oil and gas production in sub-Saharan Africa over the next five years, a recent report by Africa Energy Chamber says.
According to the African Energy Outlook 2020, energy production in Nigeria is projected to grow by 4.71 percent between 2019 and 2025. The forecast is based on a series of factors.
First, Total’s Egina deepwater field came on stream at the beginning of 2019, boosting crude production by nearly 10 percent or just over 200,000 barrels per day (bpd).
While the development of two new offshore fields has been slower than expected, they are scheduled to come on-stream in 2020. At their peak, the Anyala (OML 83) and Madu (OML 85) fields are expected to yield 50,000 bpd and 120 million standard cubic feet per day respectively.
In addition, the final investment decision (FID) for the Bonga South West project is expected by 2022, with production scheduled to start in 2024. The field could add 225,000 bpd at peak flow.
There is growing momentum in Nigerian gas as well, the report added. But delay in the FID on the Train 7 liquefaction facility is holding up other projects which could supply feedstock to the facility.
Meanwhile, current forecasts estimate that Angola’s oil and gas output will fall by nearly 6 percent between 2019 and 2025. This is as a result of a decline in upstream investment in recent years – production fell by over 300,000 bpd – triggered by low oil prices, as well as the country’s high cost and challenging business environment.
However, the new administration under President João Lourenço is implementing a reform agenda that is rekindling interest. Oil firm BP is expected to start drilling wells in its deepwater Platina field (Block 18) by mid-2020 with first oil expected in 2021/2022 even as the government plans to award 50 blocks over the next five years.
New emerging force
Although the top oil producers should maintain their position in the region over the next five years, their share of total SSA daily production is projected to fall from 73.9 percent in 2019 to 58 percent in 2025 – more than a one-fifth loss of market share.
Mozambique’s growth is the key driving force behind this shift. Though one of the least economically developed on the continent, the south-eastern African nation holds nearly 3 trillion cubic feet of gas reserves – the third largest on the continent, behind Nigeria and Algeria.
“Over the next five years, IOCs, including Eni and Total, will be working to bring more than 30 million metric tons of annual gas production online, catapulting Mozambique into a significant global LNG supplier,” the report says.
Other noteworthy, albeit small, growth markets are Senegal, Mauritania (gas) and Kenya (oil). They are expected to see commercial levels of production come online in the next few years while Ghana and South Africa should also record increased levels of exploration activity.
Nigeria remains the “pre-eminent SSA oil and gas market, both in terms of production and proven reserves,” the report adds. But converting this potential into increased capacity will require “a more stable policy environment and the development of key infrastructure projects,” such as the Dangote Refinery.
Source: Ventures Africa
