What? Investment activity in exploration and production is starting to pick up.
Why? Oil prices have increased by nearly 25 % compared to the same period last year thanks to OPEC production restrictions.
What next? The prospect of peak demand for oil and gas is likely to make investors more cautious.
Oil and gas exploration in Africa is picking up, thanks to improved cash flow from the rise in oil prices to around $70 a barrel, the highest level for almost three years, with global demand at around 100.5 millions of barrels per day (m b/d). According to BP Statistical Review 2018, African oil and gas production recovered in 2017 by 5.0% and 9.0%, respectively. In addition, Baker Hughes Africa rig data shows as increase from just 77 rigs in operation in September 2016 to 94 in May 2018 which is albeit still substantially lower than in 2015. This is reflected in news of exploration starts in the first half of this year focussed in West African offshore waters, with some promising results announced in Gabon and Niger, reports Paul McDade, CEO of African oil explorer Tullow Oil, explained in February’s Financial Times “we are getting back to exploration, which we are good at, but still with a focus on cost control.”
The collapse of oil and gas prices discouraged new investment in exploration and production, but their recent revival together improved cost controls and with low stocks of oil, indicate that in Africa there is light at the end of the tunnel. A snapshot of new exploration projects by both large and small companies working in frontier areas such as the Ivory Coast, Morocco, Namibia and Niger compiled by Edison Research Exploration Watch April 2018 follows.
After a three year suspension of exploration in Africa, Irish-owned African explorer Tullow Oil has returned with news that it has acquired two offshore licenses in January 2018 for blocks, CI-521 and CI-522, in Ivory Coast’s eastern border with Ghana, close to its Jubilee oil and gas field operations and TEN oil and gas fields development, which it discovered in 2007.
Exploration interest in Moroccan waters is also accelerating. Italy’s oil major Eni, working with London-based independent Chariots Oil and Gas, has invested in the country’s Rabat Deep Licences. The area comprising offshore oil and gas reserves spread over 10,782km² between Rabat and Spain’s Canary Islands has water depths ranging from 150 meters to 3,500 meters. Exploration is being conducted with the Saipem-owned sixth generation ultra-deep-water drillship, the Saipem 12000. However, Eni’s and Chariot’s first well in the Rabat Deep has proved a failure. Although, the data findings discovered from the geology from the top seal and some thin sands encountered in the overburden will allow an improved description of the Cretaceous siliciclastic play that Chariot is targeting in the neighbouring Mohammedia and Kenitra permits where we operate with 75% equity. Likewise, Qatar Petroleum and Chevron Africa are jointly exploring three offshore lease areas of approximately 29,200 sq.km, where water depths range between 100 to 4,500 meters, some 100-200 kilometres west and northwest of Agadir.
To read more see 10 July 2018, Week 27, Issue 745 https://newsbase.com/publications/afroil-africa-oil-gas