At a time when the continent is witnessing a rebound in high-impact drilling success rates, a round table at the African Energy Week 2023 conference explored the resource potential of recent discoveries.
A number of exploration hotspots have emerged across the continent, with major discoveries made in both onshore and offshore basins. The rebound in high-impact drilling success rates has not only demonstrated the considerable potential of untapped acreage, but also provides a strong argument for upstream investment in Africa.
Following regional oil and gas discoveries in 2022 and 2023, a panel discussion at the 2023 edition of African Energy Week (AEW) - organised by the African Energy Chamber - explored the resource potential of Africa's new oil and gas. Speakers from The Gambia, Angola, Namibia, Sierra Leone and other countries examined the scale and commercial viability of these discoveries, detailing estimated reserves, their quality and recoverability.
Emmanuelle Garinet, Vice President of Exploration in Africa at TotalEnergies, opened the discussion with a presentation, stressing that "despite the challenges, we are entering a period of opportunity". Garinet highlighted the fundamental drivers of the oil and gas exploration industry in Africa.
She explained: "Having access to good quality data such as 2D and 3D data is fundamental to opening up new basins. We also need to retain geoscientists. We must continue to hire and train people. It is essential for Africa to continue to integrate young students and scientists; they have a role to play. Exploration is a costly and risky business, and companies need incentives and a favourable regulatory environment.
Dubbed the last frontier of oil and gas exploration, Africa continues to turn heads in the global hydrocarbon industry, as new discoveries demonstrate the commercial potential of onshore and offshore basins. In established markets such as Angola, ongoing efforts to boost E&P investment against a backdrop of declining production have yielded fruitful results, and exploration remains of crucial importance.
According to Marco Fonnesu, Exploration Manager (Blocks 1/14 and 28), Azule Energy, "exploration plays an important role not only in creating value, but also in finding new assets and areas where we can achieve greater results", adding that "Azule Energy is planning 16 exploration wells over the next four years, most of which are in new exploration blocks.
Brian Reinsborough, CEO of ReconAfrica, a Canadian company exploring both Namibia and the Kavanago coastal basin in Botswana, stressed that "Africa has enormous potential". Reinsborough believes that government support plays a role in ensuring the success of exploration.
"Important factors include the subsurface, contractual terms and conditions and the stability of the contract on the surface. Governments need to encourage data acquisition, both onshore and offshore. This is how basins evolve. Good data acquisition is essential to stimulate innovation by geoscientists," he said.
Meanwhile, billion-barrel discoveries in emerging markets are poised to attract new producers to the global energy scene. Namibia, meanwhile, has made a significant investment by investing in five major discoveries in two years. Justin Cochrane, Director of African Regional Research at S&P Global Commodity Insights, believes that this success can largely be attributed to the country's attractive fiscal conditions.
"We are finding that exploration is taking place in places that are attractive for investment. In Namibia, for example, fiscal conditions are excellent and wells are being drilled. South Africa also has excellent financial results and TotalEnergies will probably be drilling next year. Moving up the coast, ExxonMobil has also been able to negotiate good terms in Angola. Where exploration takes place is linked to where the fiscal conditions are good," he said.
In line with this trend, untapped markets such as The Gambia and Sierra Leone are keen to replicate regional successes upstream, with the introduction of policy reforms and licensing tenders aimed at attracting investment in promising hydrocarbon deposits. Sierra Leone is committed to creating an investment-friendly environment, and the results are already visible.
Foday Mansaray, Director General of the Sierra Leone Petroleum Directorate, explained: "We have successfully concluded our fifth offshore licensing round. We have three major industry players who have pre-qualified. We will be conducting negotiations in November and expect to award the licences in December. From application to award of the licences, we have given ourselves 85 days.
The Gambia is also inviting investors into the market. Cany Jobe, E&P Director of the Gambian National Petroleum Company, said: "We have enormous resource potential, but we face the dilemma of stranded reserves. In 2014, the world's largest hydrocarbon discovery was made in Senegal, the Sangomar field. The Gambia is surrounded by Senegal. By all indications, our basin and shelf areas offer the same potential... You are all welcome in The Gambia, which benefits from excellent fiscal conditions and a proven petroleum system.