Magazine article New African

Africa Emerging as an Oil and Gas Superpower: The Oil and Gas Industry across Africa Is Changing. from a Small Number of Oil-Producing Countries 10 Years Ago, the Continent Is Set to Welcome a New Wave of Members to This Exclusive Club. the Green Shoots of Becoming an Oil and Gas Superpower Can Already Been Seen, Reports Bekuochi Nwawudu, Director of London-Based CBO Capital

Magazine article New African

Africa Emerging as an Oil and Gas Superpower: The Oil and Gas Industry across Africa Is Changing. from a Small Number of Oil-Producing Countries 10 Years Ago, the Continent Is Set to Welcome a New Wave of Members to This Exclusive Club. the Green Shoots of Becoming an Oil and Gas Superpower Can Already Been Seen, Reports Bekuochi Nwawudu, Director of London-Based CBO Capital

Article excerpt

Afren Plc, a London-listed exploration and production company, recently announced the acquisition of Black Marlin, an exploration company listed on the Toronto Stock Exchange with assets in Ethiopia, Madagascar, Kenya and the Seychelles. Afren, which has existing assets in Nigeria, Cote d'Ivoire, Ghana, Gabon and Congo, will have a portfolio of 27 assets across nine markets stretching from west to east Africa following the formal conclusion of the deal.

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The oil and gas industry across Africa is changing. From having a small number of oil-producing countries 10 years ago, the continent is set to welcome a new wave of members to this exclusive club. Commercial discoveries have recently been made in Sierra Leone and Liberia. In East Africa, Afren's acquisition of Black Marlin opens up Madagascar, the Seychelles, Kenya and Ethiopia to further exploration, while Tullow Oil, producers in Ghana, are close to significant production in Uganda and further opportunities in Tanzania.

As exploration becomes more difficult and more expensive in other areas of the world, whether for fiscal, nationalisation or environmental reasons, oil-consuming countries are turning to Africa as the "last frontier". This is true of both the traditional partners (the US, UK, France and Italy) and the emerging world (China, India, Korea, Brazil and Russia). China has secured a strong foothold in Sudan and Angola and continues to expand its reach into other areas. SINOPEC, one of the leading Chinese oil companies, announced the acquisition of Addax Petroleum in 2009. The US continues to grow its relationship with traditional suppliers like Nigeria and Equatorial Guinea, and is looking for a foothold in the emerging markets of Uganda and Ghana.

Over the last 10 years, a wave of small independent exploration companies has led the development of new geological knowledge and understanding of frontier basins not previously viewed as prospective. Nigeria, Equatorial Guinea, Gabon and Angola have long been known to hold significant reserves, but exploration from Sierra Leone through to Ghana has highlighted the potential in many, hitherto non oil-producing countries in Africa.

Exploration in East Africa has revealed significant opportunities in the rift basin, and Afren's recent investment demonstrates the level of interest in this area as they join Tullow, Heritage and others in the race to lead the exploitation of these resources.

There is a dual wave of interest in Africa. Majors running from stricter regulations in the US and other areas are waiting in the wings to snap up assets from smaller, independent oil companies operating in Africa. This is already evident in Uganda (with Total) and Ghana (with ExxonMobil), and moving forwards, the trend is likely to continue. …

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