Oil and gas financing for Africa on the agenda at World Upstream summer reception

42911875260 62384f2b8d zEgypt has growing energy demand which could be met by the country's gas reserves. (Image Credit: Terrazzo/Flickr)Paul Welch, CEO, SDX, was the keynote speaker at the Africa Energy World Upstream summer reception, with “Financing Africa's oil and gas: the state of play” as the theme of the evening

After an introduction by Richard Norris, oil and gas adviser, Helios Partners, in which he focused on opportunities in Mozambique, Tanzania, Kenya, Uganda, Egypt, Equatorial Guinea and South Africa, Paul Welch spoke on the subject of “Africa's gas prize.”

“Africa is blessed with a lot of gas,” he told the guests. He said that the focus for Africa is largely on the domestic market, it has the potential to be a “great enabler” and “lift people out of poverty,” contributing to a growing and more affluent middle class.

Echoing Mr Norris' opening address, Mr Welch talked about the prospects SDX has in North Africa, particularly Egypt and Morocco, saying the operations in the two countries had “very different characteristics and potential for very different reasons.” Both prospects are onshore but the Egyptian operation is high volume for a growing gas market, while the Moroccan operation is low volume for an under-served gas market.

SDX's South Disouq field in Egypt has five wells of which four have been successful, potential is at 2tcf, drilling costs are low and fiscal terms are “moderate,” with Mr Welch saying SDX is “optimistic about decent returns.” Meanwhile, the Moroccan field was described by Mr Welch as a “simple business” with the gas needing “little to no treatment,” no royalties paid to the Moroccan government thanks to a 10-year tax holiday, low drilling costs, and a pipeline capable of 24m cf per day currently transporting 6m cf/day. The potential 50 bscf of gas would be “laughable in most parts of the world” but should prove to be boon to SDX and to Morocco.

Jayne Baird from Woodside Energy gave closing remarks, reflecting the optimism of the two speakers.

“The gas prize is definitely there,” she said.

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