2023-05-15 23:44:02
Sub-Saharan countries are playing an increasingly important role in African oil production this year.
Nigeria and Angola, members of OPEC, remain among the main producers on the continent. In fact, together with Libya, Algeria and Egypt, they will account for 80% of African oil production in 2023.
But, as the recently released foresight report by the African Energy Chamber (AEC), titled “The State of African Energy Q1 2023”, indicates, much of the remaining oil this year will come from sub-Saharan countries like Gabon, Chad, Congo, Ghana and Equatorial Guinea. Let’s take a closer look at recent developments in the oil industry in each of these countries.
The gabon
Since the 1950s, Gabon’s oil exports have accounted for the majority of the country’s GDP. After a peak in 1996, a price crash in 2014, and a natural decline in production that combined with the havoc wrought by COVID-19 on the global oil sector, recent developments in the Gabonese oil market might potentially mark the return to more prosperous times for the country’s oil producers.
Unexpected disruptions to the oil market induced by Russia’s invasion of Ukraine and other economic changes have unwittingly created new opportunities for Gabon, and a series of regulatory changes have revitalized foreign interest in resources. in the country’s fossil fuels.
The administration of President Ali Bongo Ondimba aligns with the ACS position that Africa can both strive to mitigate the effects of climate change and transition to energy sources renewables, while promoting economic growth through continued oil and gas development.
Gabon’s efforts to protect its rainforests from deforestation and degradation were recognized when Gabon became the first African nation to receive a payment from the United Nations Central African Forest Initiative (CAFI). At the same time, Gabon has sought to maintain its rank as the fifth-largest oil producer in sub-Saharan Africa by opening new rounds of licensing for shallow-water and deep-water drilling and revamping Gabon’s special economic zone ( GSEZ), facilitating customs compliance and providing tax benefits to foreign investors. A new hydrocarbon code also offers international oil companies better returns on exploration and production (E&P) investments made in Gabon.
Although Gabon’s oil production fell short of its target of 220,000 barrels per day (bpd) by 2023, it reached 200,000 bpd in April, a marked improvement from the rate of 180,000 bpd observed in 2020.
While most of the work underway to increase this rate of production takes the form of redevelopment of mature or marginal oil fields led by Perenco and BW Energy, the region has seen a total of 18 new appraisal wells and exploration drilled between 2022 and 2023.
If the Gabonese government continues to attract foreign investment and pursue deep-sea exploration, the country will remain on a promising path of game-changing discoveries and profitable development.
Chad
With an average oil production of 69,000 bpd in May, Chad saw its production increase to an average of 92,000 bpd in the second half of the year, accompanied by the export by PetroChad Mangara (PCM) of its first barrel of oil to the Chad-Cameroon pipeline in July.
These developments took place following the acquisition of PCM by Perenco and with the support of the Société des Hydrocarbures du Tchad (SHT) and the new Chadian Minister of Petroleum and Energy, HE Djerassem le Bemadjiel.
Under the direction of the new Minister, given his training as a geologist, his experience with the oil services company Schlumberger Limited, the Djarmaya refinery and his role as an adviser on oil inspection to President Idriss Deby, Chad’s oil and gas sector is poised to grow to ensure a prosperous future and support the national economy.
Chad, a landlocked country, holds regarding 1.5 billion barrels of crude oil reserves and depends on pipelines for its exports. Chad recently joined a project to establish a network of three multinational pipelines linking 11 different countries to multiple refineries, storage depots, liquefied natural gas terminals and gas-fired power plants. The project is expected to be completed in 2030 and is expected to reduce Chad’s dependence on imports of refined petroleum products.
Going forward, CEA recommends that Chad continue to seek foreign investment and public-private partnerships to develop its significant hydrocarbon and renewable energy resources, with the aim of reducing energy poverty and fostering economic growth.
The Congo
Sub-Saharan Africa’s third-largest oil producer with 2.9 billion barrels of proven reserves and an offshore extraction rate of 336,000 bpd, the Republic of Congo, or Congo Brazzaville, is still looking to increase production.
After improving fiscal conditions for operators and opening a total of 28 blocks in licensing rounds between 2015 and 2019, Congo has attracted many major global energy companies, including TotalEnergies, Perenco, Chevron, Eni and Lukoil .
In April 2023, Congo is set to conclude a new production sharing agreement with Chevron and the Angolan company Sonangol EP concerning an offshore oil block shared by the two countries.
And Ghana
Ghana has emerged as one of the most attractive prospects in the sub-Saharan region, having taken a very committed approach to obtaining financial support for its numerous energy project proposals.
The Petroleum Commission of Ghana intends to increase E&P within the country’s borders by considering the allocation of new offshore blocks and conducting a review of operators’ fiscal terms to ensure that they encourage the development of new global partnerships. By potentially offering a sliding scale of taxation, on which ultra-deep wells would enjoy the lowest tax rate, Ghana is positioning itself as a lucrative prospect for international oil companies looking to invest.
In addition to presenting plans for a $150 million logistics center in Ghana, the Ghana National Petroleum Corporation (GNPC) also intends to begin drilling operations in the Voltaian onshore basin by early 2024. .
In addition, the recent acquisition by AFC Equity Investment of Aker Energy’s stake in the Deepwater Tano Cape Three Points (DWT/CTP) block off the coast of Ghana marks the start of efforts to redevelop the ultra-deepwater oilfield of Pecan and its reserves estimated between 450 million barrels of oil equivalent (Mboe) and 550 Mboe, which have been on hold since the outbreak of COVID-19 in 2020.
Ghana will present these various proposals during the African Energy Week (AEW) 2023 to be held in Cape Town from October 16-20, 2023, taking advantage of the premier industry conference to create networks and investment opportunities.
Equatorial Guinea
In February 2023, Equatorial Guinea’s Ministry of Mines and Hydrocarbons signed three production sharing contracts with Panoro Energy and Africa Oil Corporation, opening a new chapter of exploration and production for the East African country. ‘West.
Block EG-01 has been awarded to Panoro Energy, strengthening its partnerships with six other oil and gas wells in the nearby Ceiba field and Okume complex. This block adjoins Block G, which contains over a billion barrels of oil reserves.
The Africa Oil Corporation obtained an 80% share in blocks EG-18 and EG-31, with GEPetrol holding the remaining 20%.
The following month, the Ministry of Mines and Hydrocarbons also approved a development plan for the discovery of Venus in Block P, off the coast of Equatorial Guinea. With partners VAALCO and GEPetrol, Atlas Petroleum International Limited will begin drilling the first of two wells at the site in 2024, with production in 2026. Once the $310 million project is complete, the developers expect the discovery of Venus will produce approximately 15,000 bpd gross of oil over a 25-year life.
These production sharing contracts demonstrate Equatorial Guinea’s desire to advance the country’s oil and gas industry and provide a welcome boost to its economy.
While Africa as a whole deserves to benefit more from its oil reserves, progress is being made. Massive foreign investment and substantial infrastructure developments are needed for Africa to realize its full potential in the global oil economy. At the same time, we must recognize the contributions of these small producers in Sub-Saharan Africa who are doing their part to keep the pace of efforts to achieve this larger goal.
By NJ Ayuk, Executive Chairman of the African Energy Chamber
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