Gambia Drill, page-222

OilMajors Are Eyeing Big Payouts In Africa

Editor OilPrice.com

Sun, October 31, 2021,11:00 AM·4 min readIn this article:

The optimisticresponse to a recent discovery in the Ivory Coast by Italian oil giant Eni, thefirst big find in the country in two decades, suggests that many African statesare not yet ready to give up on fossil fuels and make the shift to renewables.

In September, Côted’Ivoire announced a major offshore oil and gas discovery, following initialexploration success in 2014. The positive outlook led several international oilfirms to battle over the country’s oil reserves. A 2019 licensing round saw thegovernment sell exploration blocks for a total of $185 million, with Italy’s Eni taking a major stake, with two exploration blocks- CI-501 and CI-504, as well as France’s Total taking on exploration and production activities in the country. Britain’s Tullow Oil had previously won licenses in the region in 2017.

Oil major Eni statedlast month that it had discovered up to 2 billion barrels of oil and anadditional 2.4 trillion cubic feet of associated gas from the Baleine well,located about 60km off the coast. The well offers the first deepwater commercialdiscovery in over 20 years.

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The discovery adds tothe Ivory Coast’s proven reserves, which previously stood at around just 100 million barrels. Eni shares the newfound reserves with the state government, which holds a 10 percent stake. While the country’s output is significantly lower than Africa’s biggest oil producers, at just 50,000 bpd, the discovery offers optimism around potential new finds in unexplored areas.

Several majorinternational players have shown interest in the West African region, hoping todevelop the region’s oil industry before the global demand for oil decreases.West Africa’s upstream oil and gas market is expected to achieve a CAGR of around 6.7 percent between 2020 and 2025. Underexplored oilfields and low production costs are two of the main drivers for oil firms investing in the region.

It’s not just theIvory Coast that we’re seeing develop its oil and gas industry, as severalcountries across the continent are going full steam ahead with oil projectsthis year, attempting to strike while the iron is still hot.

Another West Africancountry looking to luck out on recent discoveries in Senegal. Between 2014 and2017, several major oil and gas finds were made in region, with discoveries of1 billion barrels of oil and over 40,000 billion cubic feet of gas.

Within the sameregion, BP is expected to commence drilling operations in the Mauritania,Senegal, The Gambia, Guinea-Bissau, and Guinea-Conakry (MSGBC) basin at thebeginning of 2022. BP hopes to develop its Greater Tortue Ahmeyim LNG gasproject, expecting to produce 2.5 million tonnes of LNG annually. Australian firm Woodside Energy will commence output of both oil and gas in the region’s Sangomar oilfield by 2023.

This month, Norwegianfirm BW Energy also announced ventures in West Africa, gaining two blocks near its Dussafu asset in **on's 12th licensing round, which has been repeatedly delayed since 2019 due to the pandemic. BW will work in partnership with Vaalco Energy and Panoro Energy as the operator of the G12-13 and H12-13 blocks for an exploration period of eight years. At present, **on is thought to have 2 billion barrels of proven oil reserves, but once again, there is significant potential in the exploration of underdeveloped oilfields.

Beyond West Africa,Tanzania in the east of the continent is racing to develop its natural gasreserves. Following the halting of talks with international companies in 2019,President Samia Suluhu Hassan aims to start development on the country’s LNGindustry by 2023. With an estimated 57 trillion cubic feet of gasreserves, Tanzania is eager to commence operations before the global demand for oil and gas begins to wane as the energy transition picks up momentum.

Not forgetting theEast African state of Uganda’s modern success story, with its first commercially viable oil discoveries in the Lake Albert Rift Basin taking place in 2006 and 2009, the country has gradually developed its national oil and gas industry. It is now expecting to boast a major oil pipeline, the East African Crude Oil Pipeline (EACOP), which will be capable of transporting 210,000 bpd from two national oilfields, operated by TotalEnergies and CNOOC, to the Tanga port in Tanzania for export. Despite several hold-ups, Uganda hopes the EACOP will be operational by 2025

While many Africancountries need to attract the investment of international oil majors to developtheir burgeoning oil sectors, these emerging economies will nevertheless reapthe rewards of a newly developed oil and gas industry, at a time when manywestern states are turning their backs on fossil fuels and where demand isstill high. The untapped oil and gas potential of several African oil regionsand the low-cost production prospective is winning the favor of several majorinternational players, who are shifting their focus to Africa and the Caribbean.

By Felicity Bradstock for Oilprice.com