With the oil price heading for the US$80 on the first day of the Africa E&P Summit, which opened today in London, ambitious operators are seeing multiple opportunities and seeking out the “elephants” - the remaining big hydrocarbons discoveries across the continent
Speakers at the opening session were upbeat about the opportunities that exist in Africa, particularly in regard to gas-to-power to meet the continent’s energy demands with a growing population and increased urbanisation. Access to energy is still a major issue particularly in sub-Saharan Africa.
Craig Goulder, VP for exploration, Woodside Energy, highlighted the links between poverty, average life expectancy (60 years for people living in sub-Saharan Africa) and access to reliable electricity (less than 40 per cent of people in sub-Saharan Africa have access to power). Woodside has a deepwater focus in Senegal, Morocco and Gabon, with LNG technology playing an important role, as well as other advances such as the Internet of Things, big data, robotics and cognitive computing. In regard to attractive countries for investment, Mr Goulder cited factors such as emerging plays, attractive fiscal regimes and the need for transparency as being critical in deciding where Woodside will invest.
Tracey Henderson, senior vice president, exploration, Kosmos Energy, said the company’s main focus was on the enormous discoveries off the coast of Senegal and Mauritania, with gas rather than oil taking centre stage. She said the peak oil was reached in Africa in 2010 while peak gas is still distant. “The demand for gas is growing in Africa,” Ms Henderson told the conference. “Oil has not really delivered the catalyst for progress that was hoped, but gas can.” FLNG and FSRU projects, as well as conventional onshore LNG, will help deliver gas to new markets and create new demand, according to Ms Henderson. FID on the Tortue project for Senegal and Mauritania is expected by the end of the year, with first gas expected in 2021 and FLNG as a “key enabler” for the “accelerated timeline”.
The aim is for gas to be used to supply power for both countries.
Senegal is also the focus for Cairn Energy. Eric Hathon, the company’s exploration director, said first oil is expected between 2021 and 2023 on an investment that was made in 2014. “We need to benefit not just us and our shareholders, but also the people of Senegal,” Mr Hathon said in regard to the company’s corporate social responsibility programme and commitment to training Senegalese employees.
As well as the emerging markets of Senegal and Mauritania, the "old guard" markets, such as Nigeria, are seeking to innovate.
Austin Avuru, CEO, Seplat Petroleum, spoke about the work his company has been doing in the established market of Nigeria. “The Nigerian story is changing,” he told delegates. “We are seeing independents coming in where majors are dropping out … it takes a lot of courage.” Mr Avuru said there is “huge potential” in the domestic market as well as export markets such as Europe and Asia.
At a domestic level, “low gas consumption, low electricity availability and low domestic competition” are opportunities, he said. Establishing a diversified portfolio with gas as a hedge against risk and establishing “robust relationships with local communities” were the words of advice from Mr Avuru for operating successfully in Nigeria.