Thursday 12 April 2012

The scramble for Africa's oil


This really is looking for the last scraps; it is highly doubtful that there are any Saudi Arabias to be found, let alone, is it three that we need?

Oil explorers now piling into Africa
Kenya is the most recent country to discover oil after Uganda finds more than 2-billion barrels of reserves, new scramble for Africa now on in an oil-hungry world


11 April, 2012

MORE and more companies are coming to Africa in search of oil and gas, Elias Pungong, African oil and gas sector leader at Ernst & Young, said last week. "Africa is the next big thing," he said.

Other than traditional oil producers Nigeria and Angola, there have been hydrocarbon discoveries in Uganda, Tanzania and Mozambique.

Mozambique is an important market for energy group Sasol , whose interests in that country include the Sofala offshore gas block and another offshore block called M-10. These are part of Sasol Petroleum International’s growth plans in Mozambique.

Kenya recently became the latest country to discover oil. London-based Tullow Oil last month announced the discovery of oil in the Turkana region of Kenya. The east African country can draw inspiration from Uganda. "Who would have thought that Uganda will become an oil-producing country?" said Mr Pungong.

Uganda has more than 2-billion barrels of confirmed oil reserves. Mr Pungong said the oil discoveries had prompted oil firms all over Africa to acquire acreage. But international oil companies or oil majors such as Tullow and Total were still at the forefront of the search for hydrocarbon resources. "Big corporations follow discoveries. But there is space for smaller companies too, especially because of the local content requirements of the various countries," Mr Pungong said.

He said companies wanted a stable regulatory environment.

An Ernst & Young report on the risks and opportunities for oil firms listed access to reserves as the top risk for the oil and gas sector, particularly with regard to political constraints and competition for proven reserves.

The second-biggest risk was uncertain energy policy. In Nigeria, the Petroleum Industry Bill has been in the offing for a number of years, "and nobody knows for sure when it will be implemented", he said. "How do you expect companies to plan? "

The report said: "Policy uncertainty impacts not only conventional reserves but unconventional energy sources as well. As new energy sources are found and commercialised, the regulatory framework struggles to keep pace with the developments in the industry.

"This can lead to moratoriums while feasibility and impact assessments are completed. Such delays have affected both shale gas and coal-seam methane in a number of geographies. Regulatory and fiscal frameworks for these sources are also sometimes uncertain."

SA has a moratorium on shale-gas prospecting in the Karoo, while it looks into the implications.

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