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Africa Boosts Upstream Activities to Amplify Oil and Gas Production



The introduction of more rounds of oil and gas exploration and production licenses in Africa will enable the continent to make significant new discoveries, increase hydrocarbon production and fully utilize the continent’s wide range of energy resources to address energy poverty and accelerate economy. increase.

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Although oil and gas production in Africa has increased over the past two decades, declines are anticipated in the coming years due to production cutbacks from legacy projects, a lack of new exploration in recent years, and inadequate investment across the region. value chain in the main hydrocarbon producing countries such as Nigeria, Algeria, Libya, Angola and Egypt. On the gas front, even though Africa has enough supply to meet 2022-2023 demand due to new projects like Mozambique’s Coral floating liquefied natural gas (LNG) and Nigeria’s LNG Train 7 projects being online, production declines in Algeria, Nigeria, Libya and Egypt will strain the supply chain from 2025. Egypt, for example, is expected to see a decline in production of 74 billion cubic meters (bcm) in 2022 to 50 bcm by 2030, unless major discoveries are made and brought online quickly. On the other hand, the oil sector will also witness production declines with Algeria, one of Africa’s top oil producers, already starting to record production cuts. Nigeria, the largest producer of crude oil in Africa, will also see a decline from 2023, while production in Sudan, South Sudan and other West African countries will also be affected.

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For Africa to mitigate these declines, the continent will need to boost investments in the upstream sector. Recognizing the need to expand upstream activities, many countries on the continent have introduced bidding rounds for licenses in both emerging and frontier markets, creating the opportunity for regional and international companies to participate in high-potential basins.

In particular, a 2021 license round submitted by the Tunisian Ministry of Energy in which contracts are expected to be awarded in 2022 for four oil exploration licences. In addition, Angola, through the National Agency for Oil, Gas and Biofuels (ANPG) also opened a tender in 2021 for tenders in Blocks 11, 12, 13, 27, 28, 29, 41, 42 and 43 in the Basin of Namibe, and in Block 10 in the Benguela Basin.

Furthermore, the results of some 14 exploration license rounds expected to be announced in 2022 across the continent are testament to the increased focus of African hydrocarbon-producing countries on increasing activities within the upstream sector. Other license rounds planned to be introduced in 2022 and 2023 include those for Côte d’Ivoire, Senegal, Algeria, Congo, Sudan, South Sudan, Somalia, Uganda and Kenya.

“Increased activities within Africa’s upstream segment will boost oil and gas production and allow the continent to fully monetize its energy resources for economic growth while also meeting demand in other regions such as Europe and Asia.” , stated Tomás C. Gerbasio, the director of strategy and business development at African Energy Week added that “what Africa needs now is to develop attractive regimes for capital, introduce more rounds of licenses and increase investments in new exploration and production projects “.

The ACS’s annual investment summit, African Energy Week (AEW), taking place in Cape Town from October 18-21, 2022, will discuss measures preventing Africa from expanding its upstream oil and gas market. and how they can be addressed. AEW 2022 will host presentations, high-level meetings and panel discussions on how Africa’s leading and emerging hydrocarbon producing countries can attract investment to boost exploration and production activities. AEW will unite governments, investors and companies within the entire continent’s oil and gas market and thereby provide a platform for rounds of oil and gas licensing and exploration and production agreements to be discussed and signed.

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