In Sub-Saharan Africa, capital investment in the oil and gas industry has been reduced by $100 billion over the next five years, according to global energy, metals and mining research and consultancy group, Wood Mackenzie.

Oil and gas exploration

Femi Oso, senior research manager for Sub-Saharan Africa at Wood Mackenzie, explained: “Exploration cuts in the region will also contribute to a longer-term production slump as explorers have shied away from greenfield prospects, in favour of appraising known discoveries.

“However, the confirmation of the giant Owowo discovery in deepwater Nigeria shows the quality of resources Sub-Saharan Africa still has to offer.”

Hellenic Shipping News reported that Wood Mackenzie expects a slow recovery for exploration, adding that operators will benefit from cost deflation and will improve efficiency through streamlining project design.

Oso added: “Governments in Sub-Saharan Africa need to revive the upstream oil and gas industry by offering attractive fiscal terms rather than look to increase state revenues in the current climate.”

Report themes

The report highlighted that: “Deepwater has suffered most due to its high breakeven price relative to other sectors.

“Nigeria and Angola have borne the brunt of these cuts given their pre-eminence here.

“As a result, liquids production will decline to 2.6 million barrels per day by 2030, down from 4.8 million barrels per day presently.”

Oso explained: “Mozambique and Tanzania’s LNG projects have remained relatively unscathed by cuts and will be timed to align with global LNG demand growth to achieve a better price.

“The projects will appeal to buyers looking to diversify their portfolios and BP has already committed to offtake all volumes from Eni’s Coral FLNG.”

He added: “The expected increase in gas production in Sub-Saharan Africa, from 6 billion cubic feet a day (bcfd) currently to 13 bcfd next decade, is very good news for the region.”