In the past twelve months, the global oil and gas industry has faced significant disruption from COVID-19 and resultant dual supply and demand shocks. In its annual review, Africa Oil & Power (AOP) highlights the key developments that have not only shaped 2020, but also influenced energy investment and policy on the continent in 2021 and beyond.
Africa Oil Corp Acquires Production Assets Offshore Nigeria
Africa Oil acquired 50% ownership interest in Petrobras Oil and Gas BV for $519.5 million. The remaining 50% will be retained by BTG Pactual E&P. With a view to extensive deep offshore exploration potential in the country, join AOP at the first-ever Nigeria Oil, Gas & Power 2021 Conference & Exhibition for two days of discussions and deal-making surrounding Nigeria’s upcoming gas monetization initiatives, downstream diversification and marginal fields licensing round.
Uganda to Develop Oilfields Worth $5 Billion
In an attempt to accelerate growth of the emerging domestic oil industry, the Ugandan Government plans to invest five billion dollars in the Kingfisher and Tilenga oil fields. “The funding will be used to drill over 500 wells and construct two central processing facilities and a water plant. [There are also] plans to award exploration companies for five blocks by the end of this year,” said Permanent Secretary of Energy Robert Kasande.
The Impact of the Coronavirus in Africa
The shutdown of China’s industrial and manufacturing capabilities – coupled with the potential spread of the virus across the continent itself – represented early concerns for Africa’s commodity-dependent economies. African countries export a substantial volume of raw mineral wealth to China, contributing to the economic shock to demand. Recovery in the medium- to long-term remains contingent on attracting interest from international investors and shifting the narrative around the inflow of investment into the continent.
US to Invest $2 Billion in Angola’s Oil and Gas Projects
U.S. Secretary of State Mike Pompeo confirmed that several American oil and gas firms intended to invest about two billion dollars into Angola’s oil and gas projects during a meeting with Angola’s Minister of Foreign Affairs, H.E. Manuel Domingos Augusto. Join AOP at the Angola Oil and Gas Conference & Exhibition on June 15-16, 2021 to tap into bankable investment opportunities within the country’s most profitable sector. The two-day event will focus on offshore oil and gas licensing, market-entry, the ease of doing business and digitalization and oilfield technologies, among other key topics.
Equatorial Guinea Grants Relief to Oil & Gas Services Companies
Following the onset of COVID-19, Equatorial Guinea’s Ministry of Mines and Hydrocarbons waived fees for services companies operating in-country for a period of three months. The waiver was introduced to avoid job losses and grant relief to the oil and gas sector – which acts as the largest private-sector employer in the country – and served as one of the first actions to be taken in support of domestic industry.
OPEC+ At Brink of Ending Oil Price War, Awaits G20 Meeting for OPEC++ Deal
OPEC+ agreed to eliminate 10 million barrels of crude per day for an initial two-month period to stabilize the market after oil prices plummeted. For African producers like South Sudan, stable oil prices remain integral to boosting exploration and opening up new oil and gas fields. “South Sudan believes that market volatility is negative for every player in the market and hurts our ability to attract new foreign investment, diversify our economy and promote peace,” stated Minister of Petroleum Hon. Puot Kang.
OPEC+ Slashes Production, Saves Oil Industry from Collapse
“OPEC has hit a home run,” NJ Ayuk, Executive Chairman of the African Energy Chamber, said in response to news that OPEC and its allies would remove up to 20 million barrels of oil per day from oversupplied oil markets for two years. “OPEC has breathed life and given hope to African nations, oil workers, investors and the African business community. We need to focus on exploration soon again.”
Gabon – An Oil Sector on the Rise
OPEC member country Gabon is determined to revamp its petroleum sector by focusing on deep offshore exploration. The country hopes to further discoveries in deep offshore, encourage investment in its oil and gas sector and increase the stake of natural gas in its energy mix and exports.
Senegal: A West African Leader on the Rise
Since the introduction of its Emerging Senegal Plan (PSE) in 2014, Senegal has managed to attract increased foreign investment to its shores and spearhead economic and social development. One of the primary objectives of the PSE is to achieve energy independence, with a strong focus on renewables. As a result, several solar park projects have been created as an effort to realize this objective by 2025.
Total Deal Catalyst for Uganda Oil, COVID-19 Should Not Delay Upstream FID
In a webinar hosted by the African Energy Chamber and AOP under the theme, “Taking Advantage of Opportunities in Uganda’s Oil & Gas Sector,” Hon. Dr. Elly Karuhanga expressed optimism toward Total’s acquisition of Tullow Oil’s longstanding stake in the Uganda Lake Albert project for $575 million. “This deal brings a lot of hope to the Ugandan oil and gas sector, which was first put in light upon first discoveries in 2006…We are grateful for the vote of confidence and are excited about what lies ahead.”
FID on Mozambique’s Rovuma LNG Project Delayed Until 2021
The final investment decision by ExxonMobil for the Rovuma liquified natural gas (LNG) project will be postponed to 2021 due to COVID-19. The Area 1 project aims to extract natural gas for liquefaction from a deep-water block offshore Mozambique containing more than 85 trillion cubic feet of natural gas.
A Strong Exploration Portfolio
In an exclusive interview with Africa Oil & Power, Vice President and Country Manager of Kosmos Energy Equatorial Guinea, Fidel Envo, reported that while the company had deferred its 2020 drilling and ESP program due to COVID-19, its production remained unaffected. Moreover, final processing of new 3D seismic completed in March yielded new exploration leads. “We continue to believe the Rio Muni basin offshore Equatorial Guinea is under-explored. New data and analysis continue to strengthen this belief.”
Total Secures $15 billion Funding for Mozambique LNG Project
French oil giant Total secured nearly $15 billion in senior debt financing for its Mozambique LNG project from financial institutions including Standard Bank Group, Société Générale SA and Rand Merchant Bank, among others. The project is expected to produce 12.9 million tons of LNG per annum.
Chevron’s Acquisition of Noble Could Have a Major Impact on African Projects
Executive Chairman of the African Energy Chamber NJ Ayuk voices concern over how Chevron will carry forward progress on projects, prioritize local content policies and create new jobs with its acquisition of Noble Energy. “Clearly, Noble Energy has struggled with local content and we hope Chevron can do better – integrate more Africans, more African women, and give the nationals true participation and true upward mobility in the projects,” Ayuk noted.
South African Government to Roll Out Major Renewable Energy Projects
The South African Government introduced three renewable energy projects worth $3.3 billion to be led by independent power producers. Forming part of the 276 projects being facilitated by the Department of Public Works and Infrastructure, the three projects are expected to create up to 6,000 jobs and contribute to the recovery of the national economy.
Retaining its Leadership Role
In an exclusive interview with AOP, Olivier Jouny, Managing Director of Total Exploration & Production Angola, shared how the French multinational was able to maintain production throughout the COVID-19 crisis, producing more than 600,000 barrels per day on Blocks 17 and 32 between March and May.
Women in Energy: Meet Africa’s Most Empowering Entrepreneurs
Several female oil and gas leaders were recongized by AOP for their contributions to the sector, including Nelisiwe Magubane, named one of the top 50 most influential figures in the Southern African power sector by ESI Africa in 2018; Maria da Cruz, President and CEO of the U.S.-Angola Chamber of Commerce; Taciana Peâo Lopes, who has played a major role in facilitating equal access to energy for local communities; and Selma Usiku, the only female geo-scientist in E&P company AziNam and awarded the Global Women Petroleum & Energy Club Award for Excellence in Africa in 2018.
Mozambique President Named Africa Oil & Power’s “Person of the Year” for 2020
H.E. Filipe Nyusi, President of Mozambique, was awarded Africa Oil & Power’s “Person of the Year” for 2020, in recognition of paving the way for multi-million dollar energy deals, which are set to transform the country into one of the largest liquified natural gas exporters globally from 2022. Previous recipients of the award include H.E. President of Senegal Macky Sall in 2019 and H.E. Mohammed Sanusi Barkindo, OPEC Secretary General, in 2018.
Angola Publishes Local Content Law Promoting Angolanization of the Oil and Gas Sector
Angola published Presidential Decree 271/20, which approved a new legal regime for local content in the country’s oil and gas sector. The decree promotes the use of national raw materials, encourages national entrepreneurship and is expected to aid in wealth creation and economic diversification in Angola.
Total Makes Second Discovery Offshore South Africa
Total and its partners made a new gas condensate discovery on the Luiperd prospect located in Block 11B/12B offshore South Africa. “We congratulate Total as [the] operator for drilling the Luiperd-1X deepwater well safely and efficiently during the coronavirus pandemic and austral winter season. The Luiperd discovery reconfirms this world-class exploration play with substantial follow-on potential,” said Garrett Soden, President and CEO of Africa Energy, which is part of the joint venture operating Block 11B/12B.
Saipem Vessel Arrives in Equatorial Guinea for Pipeline Installation
The Saipem Castorone vessel, which will be used to carry out installation work for the 70-km gas pipeline, arrived in Equatorial Guinea. The 24-inch diameter pipeline will connect Noble Energy’s Alen field with the Punta Europa gas processing facilities. The pipeline will be able to handle 950 million cubic feet of natural gas equivalent per day.
Market Report: Nigeria to Announce Marginal Fields Bid Round Results
The Department of Petroleum Resources (DPR) is due to announce the results of the marginal fields bid round, which saw 52 marginal oil fields featured over a three and a half month-long bid round exercise.
The Uk’s Decision to Halt Funding for New Oil & Gas Projects is Ill-founded and Counter Productive
The U.K. declared that it will stop funding any new oil, gas and coal projects on the fifth anniversary of the Paris Agreement, after receving pressure from extremist groups in support of climate change. According to NJ Ayuk, Executive Chairman of the African Energy Chamber, this decision has undermined potential opportunities for gas monetization and the ability to meet increasing energy demands on the continent.
Tema LNG Terminal Drives LNG-to-Power in Ghana
The Tema LNG facility in Ghana continues to gain financial traction, with the Emerging Africa Infrastructure Fund (EAIF) recently approving a $31-million loan with a 10-year term to Access LNG, a provider of specialist floating LNG infrastructure. To date, $400 million has been committed to the project, of which $170 million has been utilized so far. Construction of the Tema LNG terminal is expected to contribute to power generation solutions for the country’s population, enabling existing thermal power generators to transition from reliance on burning light cycle oil and heavy fuel oil to natural gas.