Africa Oil Corp – Exploration, Development and Production
Africa Oil Corp is a full-cycle E&P with interests in exploration, development and production. Africa Oil discloses government payments and material contracts on its website in compliance with the Extractive Sector Transparency Measures Act.
Many African countries rely on global fuel suppliers, making them especially vulnerable to spikes in energy prices. The cost of gas is one of the top contributing factors to inflation in many countries.
In the equatorial region, oil and gas discoveries are providing opportunities that could lift millions of people out of poverty. But the projects are generating tensions, as some residents fear their land will be destroyed. The oil industry is also creating economic and environmental problems for communities. The DR Congo’s Virunga National Park and Uganda’s Murchison Falls and Queen Elizabeth National parks protect some of Africa’s most unique wildlife, but the flora and fauna are threatened by an ongoing pipeline project.
Mozambique is one of the world’s fastest growing natural gas producers. Its new offshore discoveries are boosting the country’s potential to become a major natural gas exporter. But Tanzania lacks the necessary export infrastructure, and commercial development of its new offshore discoveries is likely to follow that of Mozambique.
The report covers onshore and offshore developments in the five East African countries covered by this regional analysis: Mozambique, Tanzania, Kenya, Uganda, and Madagascar. This report includes proved crude oil and natural gas reserves by country (units). The scope of the report can be customized per client requirements.
With 60% of recent discovered reserves, west Africa is central to the continent’s hydrocarbon future. The BP-operated Tortue gas project in deepwater blocks straddling the Senegal and Mauritania border is one example of a new wave of exploration activity in the region.
It is also home to some of the largest undeveloped natural gas resources in the world. Natural gas is a fossil fuel, but unlike oil, it burns cleanly and can be stored for long periods of time without degrading or running out.
Some African countries, such as Ghana, are experimenting with short-term measures to soften the impact of rising oil prices on their economies and consumers. They are limiting oil imports or setting up quotas to reduce demand, in order to save scarce foreign exchange. In addition, they are looking to optimise their fiscal regimes to improve their competitive position in the global energy market and reduce operating costs. This may include reducing licensing procedures and strengthening contract enforcement.
In North Africa, a region stretching from Mauritania in the west to Egypt’s Suez Canal in the east, existing pipeline infrastructure could be used to transport green hydrogen. This would enable oil and gas producing countries to diversify their energy portfolios by becoming significant suppliers of carbon-free power and an alternative to natural-gas exports to Europe as the global energy transition reduces EU demand for fossil fuel imports.
For some, like Algeria and a post-conflict Libya, whose hydrocarbon production is highly cost competitive and accounts for a large share of national revenues, the focus should be on protecting these cost-competitive reserves and exploring options to increase their revenues with renewable-energy investments and carbon-offset businesses. These strategies can help them maintain their license to operate in a new energy landscape.
Others, such as Nigeria and Egypt, should prioritize promoting lower-carbon domestic uses for natural gas. This can include promoting LPG production and distribution to offset higher-carbon cooking fuels, and deploying air conditioning and street lighting that use natural gas instead of gasoline or diesel.
As one of Africa’s major oil producers, Angola’s economy benefits from the region’s abundant fossil fuel reserves. However, President Lourenco is keen to gradually transition to clean energy and promote the diversification of the economy, but fossil fuel projects will remain key.
With its massive oil and gas potential, Angola has restructured its national energy company Sonangol and enacted laws to increase investor appeal. This includes a new law on natural gas, which allows private companies to associate with ANPG to maximize the value of the country’s gas resources.
In addition, the government streamlined the taxation of offshore oil activities, and adopted arbitration in a number of laws relevant to the sector (including the new private investment law). These changes signal to investors that Angola is open to international arbitration as a dispute resolution mechanism. Yet, despite these changes, Angola remains a challenging investment environment. Poverty persists in rural areas, and domestic violence and illiteracy are widespread.