The demand for rigs in Africa is projected to rise in 2023 as countries, global energy majors and independent explorers boost exploration activities in pursuit of capitalizing on untapped basins across the continent.
On the back of a series of successful discoveries made in 2022, coupled with higher oil and gas prices incentivizing further exploration, Africa’s upstream market is already a hive of activity. A report released by research firm Hawilti and logistics services firm Caverton Offshore Support Group tracks the continent’s rig activity and key trends for 2023.
Also read: A new era of digital retail in Africa is here
2023: A Record-Year for Exploration
According to the report, exploration in 2023 is expected to reach a 10-year high, with 30 rigs already in operation and more drilling contracts currently under discussion to facilitate both resource exploration and development.
In sub-Saharan Africa, offshore drilling will remain strong, with notable exploration campaigns including Eni’s six-well drilling campaign in the Republic of Congo and the China National Offshore Oil Corporation’s two-well drilling campaign in a promising deepwater prospect in Gabon. With discoveries such as Shell’s second deepwater find (Jonker-1X) in Namibia starting the year off strong, the demand for rigs is expected to increase significantly.
Angola, Nigeria to Dominate Offshore Rigs Market
Angola, followed by Nigeria, has been identified as the most active offshore drilling destination in Africa with the demand for rigs anticipated to increase through 2026 owing to activities in brownfield and greenfield projects.
Also read: How transition finance can combat climate change in Africa
To date, Angola has six floaters contracted through 2024 with a strong slate of international oil firms active in the country including TotalEnergies, Azule Energy, Chevron and ExxonMobil, all of which have operating rigs. Efforts by majors to implement infill drilling campaigns and subsea tie-back schemes on existing Floating Production Storage and Offloading units will expand the demand for rigs offshore Angola, according to the study.
Meanwhile, in Nigeria, five offshore rigs have already been scheduled to operate in 2023 including Shell Nigeria Exploration and Production Company Limited’s in Block OML 118 and TotalEnergies’ in Block OML 130. The study predicts that firms such as Chevron, First E&P, General Hydrocarbons and Damas E&P will boost the demand for jack-ups rigs in shallow water projects in Nigeria in 2023.
Higher O&G Prices Drive Demand for Rigs
Higher oil and gas prices across the globe have incentivized African energy producers and global energy firms to embark on more upstream activities, thereby increasing the demand for rigs. According to the study, countries such as South Africa, Mauritania, Mozambique, Ghana and Guinea-Bissau are accelerating the preparation for exploration campaigns with the aim of taking advantage of the price increases to maximize resource monetization.
Global firms are also fast-tracking Final Investment Decisions for projects as well as the deployment of infrastructure to bring new projects online. Eni, for instance, is expected to fast-track the development of its Marine XII project in Congo; Trident Energy will accelerate its drilling campaign in Equatorial Guinea; and Perenco will progress with the drilling of six new wells in Congo. TotalEnergies and Shell are also expected to embark on exploratory and appraisal drilling in Namibia following the discovery of the Venus-1 and Graff-1 in 2022 while Senegal will drill more wells to drive its hydrocarbon growth agenda post-first oil and gas production targeted for this year.
Also read: Carbon finance in agriculture helps build sustainable future in Africa
While Africa seeks to address energy access, reliability and affordability issues by maximizing the development of local oil and gas resources, the continent’s demand for offshore rigs is projected to increase this year and beyond.
