Ian Thom, the Upstream Research Director at Wood Mackenzie has said that big oil producers like Nigeria, Angola and Egypt could see oil production flatline as the decade progresses.
He said this during the ongoing African Energy Week event in Cape Town, South Africa.
He highlighted the fact that traditional oil production hubs across Africa are expected to face challenges in offsetting production declines at mature assets.
He also noted that a global trend focusing on advantaged resources indicating that higher-cost and higher-emitting assets in Africa may be affected, effectively underscoring the importance of strategic planning and sustainable development in the African oil and gas sector.
He said:
- “With the global upstream trend firmly focused on advantaged resources, it is inevitable oil production will be affected in higher cost and higher emitting assets in Africa. However, there could still be some upside from reserve growth or yet-to-find resources.
- “TotalEnergies recent discovery at Ntokon in Nigeria is a great example where new oil discoveries drive incremental growth. And the exploration success in Namibia underlines how deepwater exploration can generate strong investment opportunities.”
Meanwhile
According to the October 2022 State of African Energy report by the African Energy Chamber, a comprehensive comparison of anticipated crude oil and condensate volumes from African producers revealed a notable shift in the production landscape.
The report indicated that Libya, Chad, and Egypt are positioned to experience substantial increases in production from 2022 to 2030. On the other hand, Nigeria, Ghana, Algeria, and South Sudan are expected to witness a decline in production over the same period.
What the future holds
Beyond major producers, Thom also highlighted a significant $800 billion capital expenditure (capex) program currently underway in the African upstream oil and gas sector.
This substantial investment is set to transform the sector, bringing liquefied natural gas (LNG) to the forefront as a major investment theme, alongside the traditional deepwater oil.
According to Thom, this 20-year investment cycle, initiated in 2010, is expected to reach its peak by the end of this decade with the implementation of world-scale LNG projects in Mozambique and the adoption of floating LNG (FLNG) technology across five countries.
Africa is already a global leader in floating LNG, boasting over 50% of the world’s capacity, with room for further growth.
He said that given Africa’s abundant gas resources, the continent is actively exploring various opportunities to harness and develop gas for both domestic consumption and export markets.
Note that currently, Africa’s LNG exports stand at just over 40 million tons per annum (mmtpa), and several LNG projects in Sub-Saharan Africa are at different stages of development. Notable projects include bp’s Tortue FLNG, located offshore from Senegal and Mauritania, which is set to come online next year.
It is also important to highlight the upcoming UTM Offshore floating LNG project in Nigeria as well as the Golar LNG and NNPCL collaboration on an FLNG project in the country.
