03-10-05
Billions of dollars will be invested in Africa's oil and gas industry in the
next few years, and South African companies have to position themselves to take
advantage of the boom in the global oil market.
Measured by reserves and production, South Africa's oil and gas industry is
small fry compared with the largest sub-Saharan oil-producing countries, Nigeria
and Angola. Still, through home-grown and international oil service companies
that have units in South Africa, the country could gain from the extensive
growth expected in the West African and Angolan oil industries.
The World Petroleum Conference, which brought thousands of delegates to
Johannesburg, offered a platform for African countries to set out their stalls.
New licensing rounds and oil production targets were announced by
representatives of governments and state oil companies across Africa.
The continent has 9 % of the world's oil and gas reserves. The unstable politics
of the Middle East and oil's 50 % rise in price this year makes investing in
Africa’s oil business increasingly attractive.
Redge Nkosi, senior manager of business strategy at the National Ports
Authority, said there was a good chance of setting up an oil service centre in
South Africa that would capture some of the business generated by the West
African industry. Nigeria, Cameroon, Gabon, and Equatorial Guinea are all areas
where multinationals, such as Shell, ExxonMobil, ChevronTexaco and others are
growing their businesses. Nkosi said South Africa has the right facilities at
the Cape Town, Saldanha and Durban ports.
“The Saldanha area may need to be expanded. In Cape Town we may have to consider
expanding the infrastructure there,” he said.
The National Ports Authority is working with the National Oil and Gas Task
Team and other industry players. No decisions on any port infrastructure
expansion has yet been made, but Nkosi said the authority may be planning to
invest as much as R 3-bn. Any investment decision will depend on the work that
South Africa-based oil service and engineering companies can attract.
In sub-Saharan Africa, Nigeria is by far the largest oil and gas producer and
the country has significant reserves with more exploration to come. The country
plans to lift oil production to 4.5 mm bpd by 2010. At present it pumps about
2.5 mm bpd.
At the World Petroleum Conference, Funsho Kupolokun, group managing director
of the Nigeria National Petroleum Corporation, said there were investment
opportunities of $ 34.4-bn in Nigeria’s Delta Basin.
Angola, with oil output of up to one mm bpd, is sub-Saharan Africa’s
second-biggest producer. It wants to boost this to 2 mm bpd by 2008. Angola
plans to hold a bidding round for seven new exploration licences by the end of
the year. Carlos Saturnino, chief negotiator for the Angolan state oil company
Sonangol, said at the conference that the country would announce a partner for a
$ 3-bn refinery to be built in Lobito soon.
PetroSA is one of three companies bidding. Total and China Petroleum &
Chemical Corporation are also in the running.
South Africa, with only three oil fields producing 45,000 bpd, will have to be
content with piecemeal development of its oil and gas production industry. At
the moment, nine companies either have oil and gas prospecting leases or are
part of joint ventures in South African waters.
At the World Petroleum Conference, Dave Broad, who is the technical manager
for the Petroleum Agency of South Africa, said the agency planned to hold an oil
and natural gas exploration licensing round in the “near future” for blocks
offshore of Durban.
Source: Sunday Times