Algeria's multi-year licensing strategy targets international oil companies. (Image source: Adobe Stock)

The National Agency for the Valorization of Hydrocarbon Resources in Algeria (ALNAFT) will host its bid opening ceremony for its 2024 Bid Round on 17 June this year

Last November's bid round which had offered six onshore blocks drew interest from 41 operators. These blocks are backed by extensive geological and geophysical insights for interested parties to refer to.

Building on the success of the first round, the country is planning to launch its 2025 Bid Round towards the year-end.

According to Mourad Beldjehem, chairman of the Board of Directors of ALNAFT, Algeria's multi-year licensing strategy has been put in place to especially target international oil companies (IOC). 

He was speaking in a webinar hosted in partnership with the African Energy Chamber (AEC) and Wood Mackenzie.

“Algeria’s five-year plan features multiple licensing rounds, focusing on high-potential geological zones, combining greenfield and low-risk brownfield assets to attract a spectrum of industry players. Bid Round 2024 is underway, with 41 companies expressing interest. We received interest from IOCs from all over the world, including North America, Asia and more. We are optimistic that we will award five out of six blocks, at least. The next bid round, we will select the same type of blocks, featuring both exploration and development [opportunities],” said Beldjehem.

“Gas has become particularly important in the world. We have seen an increase in African gas production, specifically Algeria. The country is located close to a large consumer market in Europe and it is a text book example of how you can improve fiscals to attract significant amounts of investments,” said Verner Ayukegba, senior vice president, AEC.

Algeria’s oil and gas production uptick was possible with robust regulatory reforms. Martijn Murphy, principal analyst, Wood Mackenzie, reinforced that the country's new Hydrocarbon Law (2019) allowed project incentives that played a major role in turning around the country's declining production trajectory.

“New fiscal terms are beginning to yield foreign investment. In 2019, the country introduced a new Hydrocarbon Law, which we consider a marked improvement from the 2013 terms. Production so far this year has rebounded. Our outlook excludes contributions from yet-to-find discoveries – which we expect to be made following licenses awarded this year - and unconventionals. Algeria is also starting to look serious about shale gas development, following MoUs signed last year,” he said.

Besides strengthening the local market, this production rebound couldn't have been better timed as Europe is currently looking to its neighbours to meet its growing gas demand. With Algeria seeking to increase annual gas production to 200 billion cubic meters over the next five years, the country is expected to play a much larger role in supporting European demand.

The entity is a merger between iGas, PetroSA and the SFF. (Image source: Adobe Stock)

The South African National Petroleum Company (SANPC) was unveiled at The Maslow Hotel in Sandton

The state-owned entity is the result of a merger between iGas, PetroSA and the Strategic Fuel Fund (SFF), aiming to secure South Africa's energy future with the revitalisation of strategic infrastructure.

During the launch event, SANPC chairperson, Sipho Mkhize, defined the company as a "national asset" that has been the brainchild of the President Cyril Ramaphosa-led government. He informed that strategic discussions are underway with the Ministers of Transport, Mineral Resources and Energy, and Forestry, Fisheries and the Environment to convert the single buoy mooring (SBM) in Durban into a more flexible multi-buoy mooring (MBM). 

This will reduce dependency on international oil companies while ensuring supply, making SANPC an independent terminal operator with equal berth access and robust system integrity.

The Minister of Mineral Resources and Energy, Gwede Mantashe, said, “This launch is a strategic intervention – SANPC will drive industrialisation, job creation and inclusive growth. It will manage our strategic oil reserves, rebuild our refining capacity, and ensure energy sovereignty while contributing to regional energy security.” 

He emphasised the urgency of restoring South Africa’s refining capabilities and reiterated government’s support for SANPC’s efforts to restart the PetroSA GTL plant in Mossel Bay and revive the SAPREF Refinery in Durban.

CEO Godfrey Moagi acknowledged the majority state-owned Brazilian oil and gas company, Petrobras, as an inspiration behind SANPC’s vision while "tailoring our approach to reflect South Africa’s realities and aspirations”.

“SANPC is open for business. We invite partners to join us in building integrated, innovative, and sustainable energy systems across South Africa and the continent,” said Mkhize.

Africa's oil & gas industry needs policies that effectively attract sustainable investment. (Image source: Adobe Stock)

Interest in Africa’s upstream oil and gas sector continues to grow, with the proviso that effective governance, transparent policies and favourable fiscal terms are developed in-country 

To foster a sustainable investment environment, African governments must strike a delicate balance between attracting foreign capital and ensuring that investments serve the broader interests of their populations.

For Africa to realise its vast potential in the oil and gas sector, good governance is essential. Governments must establish transparent policies that instill confidence in investors. A commitment to political stability and robust regulatory frameworks not only attracts foreign direct investment (FDI) but also fosters an environment where businesses can thrive.

Key to this approach is the development of favourable fiscal terms that align with the interests of both the state and investors. By offering competitive tax regimes and incentives, governments can entice investors while ensuring that local communities benefit from the wealth generated by natural resources. This alignment is crucial in the context of the United Nations Sustainable Development Goals (SDGs), particularly SDG 7, which emphasises the need for access to affordable and sustainable energy for all.

A panel discussion I hosted during Africa Energy Week underscored the need for policies that effectively attract sustainable investment. African nations, rich in oil and gas reserves, face the challenge of translating these resources into tangible benefits for their populations. Investments should not only generate financial returns but also contribute to socio-economic development.

To achieve this, countries must develop comprehensive strategies that encourage local refining and the establishment of a robust petrochemicals industry. This minimises the export of crude oil and maximises the value retained within the continent, creating jobs and stimulating economic growth. Such a multifaceted approach not only enhances the value extracted from the continent's natural resources but also has far-reaching socio-economic benefits.

For instance, exporting crude oil in its raw form means losing a significant portion of its potential economic value. By investing in local refining capabilities, countries can process crude oil into finished products – such as gasoline, diesel, and various petrochemicals – before they are exported. This transformation allows nations to capture more value from their natural resources and reduce dependency on foreign refined products. 

This is the first of a two-part article written by Taona Kokera, director - head of infrastructure finance advisory at Forvis Mazars in South Africa

McLeod will also be the deputy director of the unit. (Image source: Adobe Stock)

Chevron Namibia's former subsidiary staffer, Carlo McLeod, has been appointed the special adviser to the Upstream Petroleum Unit, a new initiative by the Government to advance the country's globally attractive oil and gas sector

He will also be the deputy director of the unit, which is being supervised by Kornelia Shilunga, former Member of Parliament and ex-Deputy Minister of Mines and Energy. 

The Namibian President Netumbo Nandi-Ndaitwah has been implementing administrative upgrades for better regulation and hold over international-scale hydrocarbon projects that have seen a marked rise in the country.

McLeod's administrative as well as industrial expertise gives him an edge in streamlining public and private coordination in Namibia's oil and gas sector, a significant requirement given the growing interests from oil majors. Previously, he has been a practitioner in petroleum law, serving eight years as Deputy Director of petroleum affairs at the Ministry of Mines and Energy. This was followed by his brief stint in Chevron Namibia as deputy general manager. He has also actively addressed the issues of fuel smuggling in the country.

The newly formed Upstream Petroleum Unit has been set in line with the Government's plans to effectively commercialise Namibia's oil and gas resources, and leverage them for local upliftment.