Africa is struggling to convert discoveries into producing fields however further hydrocarbon discoveries will shape the future success for oil and gas production in Africa.
High Profile Hydrocarbon Discoveries in Africa
Total discovered volumes (oil and gas) in Africa by year and current life cycles of the discoveries. Source: Rystad Energy ECube.
Africa has been one of the less active exploration zones in recent years, especially after the crude oil price crash. Within Africa, the hotspots in the past three to four years have been the Senegal-Mauritania maritime border and Egypt, where there has been a considerable amount of exploration, resulting in some high profile discoveries. These include the giant Zohr gas field and the Atoll discovery offshore Egypt, the Ahmeyim-Teranga-Yakaar discoveries offshore Mauritania and Senegal, and the Nooros find onshore Egypt. However, as the graph below illustrates, overall exploration success has fallen considerably from 2016 onwards, compared to the levels from 2011 to 2015.
Regonal Petroleum Play Openers in Africa
One reason for the drop in the discovered volumes is the level of success of high impact wells drilled since the beginning of 2016. A total of 14 wells drilled since the beginning of 2016 were classified as high impact, either because they were a play opener or the focus for the operator, or based on large volumes of prospective resources reported. Only four resulted in a commercially successful discovery, whereas another four showed small or uncommercial volumes of hydrocarbons and the rest were declared dry.
Future Hydrocarbon Success for Africa
However, the rest of 2018 and 2019 seem encouraging, with as many as 15 such high impact wells planned. Their locations vary from onshore Egypt, Morocco and Tanzania to deepwater Gambia, Namibia, South Africa, Ghana, Mauritania and Angola. The participation of supermajors like Total and ExxonMobil, Norwegian Equinor and British independent Tullow, as well as Kosmos and FAR, who have already seen success in Mauritania/Senegal waters, shows encouraging signs for near-term future exploration activity in Africa. In the rest of 2018 alone, ten such high impact wells, including Total’s Tarif prospect onshore Egypt, Tullow’s Cormorant prospect offshore Namibia, and FAR’s Samo prospect offshore Gambia, are expected to be drilled. Also, the recent success seen by the independent Savannah Petroleum onshore Niger with the Amdigh, Bushiya and Kunama discoveries, has opened up a whole new prospective area in the continent.
Although Africa has tasted a reasonable amount of success in terms of discovered volumes since 2011, sanctioning and development of these reserves is an entirely different story. A paltry 17% of the overall discovered volumes have been sanctioned till now.
The sanctioned volume would have been much lower if not for the high profile Zohr gas field, Nooros and Atoll projects in Egypt, and Coral FLNG offshore Mozambique, all of which were sanctioned in 2016–2017. Many of the recent discoveries are located in new immature basins, like Mozambique, Tanzania and Mauritania, which will require large investment commitments, so it will take time to mature and develop them. That said, the recent African discoveries will play an important role in shaping the future of a continent that is highly dependent on its hydrocarbon output.
This Regional Update is brought to you by Rystad Energy.
