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* Big global players follow smaller firms into Africa
* Region could almost double LNG production by 2023
* Oil production set to rise in several countries
By Andrew Callus
LONDON, April 10 New producing countries are set
to redraw sub-Saharan Africa's oil and gas map over the next
five years, contributing to a significant net increase in output
and attracting the top global companies.
Today, the region's heavyweight producer nations, Nigeria
and Angola, together pump around 4 million barrels per day (bpd)
of crude and also dominate natural gas output. Only a handful of
other countries in the region produce more than a couple of
hundred thousand barrels of oil and gas equivalent.
A few years from now, the balance could be very different.
A decade of high prices, good terms for exploration drillers
from governments increasingly open to business and better
seismic techniques for finding deposits have lengthened the list
of African nations that are on the brink of production.
Uganda, Kenya, Ghana and Niger are among those that could
see new fields producing over 100,000 bpd of oil by the end of
the decade; Mozambique and Tanzania are looking for gas and
planning compression plants to liquefy it for shipping to Asia.
By 2018, sub-Saharan Africa could be producing an extra
400,000 bpd of oil, according to consultants Wood Mackenzie.
That would, for example, almost meet the demand of wealthy
Sweden and Denmark together - 15 million people - and would take
the sub-Saharan region's total crude output to 6.6 million bpd.
Natural gas output this year is about 6.8 billion cubic feet
per day (bcf/d), or 70 billion cubic metres annually, enough to
supply the gas needs of Italy or Germany. Production should top
9 bcf/d by 2018 and reach 12.7 bcf/d by 2023, WoodMac estimates.
At present, some two thirds of sub-Saharan Africa's gas is
exported as liquefied natural gas (LNG) from Nigeria, Angola and
Until recently, the largest companies in such states seen as
being on the "frontier" of the industry included the likes of
African exploration specialist Tullow Oil, mid-ranked
international groups such as Anadarko and ENI
and smaller exploration players such as Ophir Energy,
Kosmos, Africa Oil and a host of others.
Lately though, global heavyweights like Chevron and
Total have come in on the act.
"The supermajors are looking at the success that some of
these companies have had, and they're trying to get in on the
ground floor, picking up the exploration acreage at an early
stage and working with that all the way up to drilling the
prospects," said Martin Kelly, WoodMac's lead analyst on
In the past couple of years, Chevron has taken up
exploration blocks in Liberia and Sierra Leone, while Total has
new acreage in deep water off Kenya and deepwater blocks in
Mozambique. Royal Dutch/Shell is prospecting deepwater
acreage off Tanzania with Petrobras. Exxon Mobil
, Shell, and Total are all exploring off South Africa.
"There's a bit of a land-grab ongoing by the supermajors,"
Political risks from unforeseen government action remain, as
Heritage Oil discovered when Uganda presented it with a heavy
tax bill when it sold up in the country. But research this week
from Credit Suisse, re-assessing recent deals in the light of
possible tax demands, says valuations still look strong.
And broker RFC Ambrian lists association with industry
heavyweights as a bonus for small explorers in the region: "The
potential for new petroleum discoveries in sub-Sahara Africa is
being underestimated by equity markets," it said.
One of the big recent finds, the offshore Jubilee field, is
already producing 110,000 bpd for Ghana and Tullow, a company
which has become Europe's number one oil and gas independent
thanks to developments in 16 sub-Saharan countries.
Also in Ghana, Tullow says the Tweneboa, Enyenra, Ntomme
(TEN) cluster of fields could be processing some 80,000 barrels
a day initially once it gets Ghanaian government approval.
In Congo Republic, a modest producer already, Chevron
made its final investment decision last month on the
$10-billion deepwater Moho Bilondo and Moho Nord projects. These
are set to deliver their first oil in 2015 and to peak at
170,000 barrels a day in 2017.
In Uganda, Tullow has recruited France's Total and
CNOOC of China to develop oil. Discussions with the government
over the size of an associated refinery have caused delay but
plans for a 200,000 bpd pipeline that could link up with more
potentially productive wells in Kenya show its potential.
Niger, whose main international partner is China's CNPC,
hopes to be producing from its Agadem block early next year,
with output ramping up to 80,000 bpd.
As for today's big two producing states, Nigerian output has
fallen from 2.5 million bpd in 2011 to little over 2 million
today, as theft and technical troubles haunt producers. But off
Angola's coast, Chevron last year sanctioned the $5.6-billion
Mafumeira Sul field which plans to be pumping by 2015, with
maximum output estimated at 110,000 bpd.
WoodMac's oil output projections have the region's overall
production in decline once more after 2018, but Kelly says this
could be a function of conservative modelling.
Certainly there is no shortage of ambition, as demonstrated
by Tewodros Ashenafi, an Ethiopian driller who was in London
this week looking for $100 million of financing.
He sees his country as a potential 400,000-bpd producer
based on geology that crosses the Red Sea from the oil-rich
Middle East, and he believes the rise of
indigenous companies like his privately held SouthWest Energy
could be the next corporate wave for the region.
"That trend is something that's on the uptick," he said.
"We've been approached by a number of African governments to
come and explore."
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(Editing by Alastair Macdonald)