Download South Africa and Region

South Africa and
Region
Arena Subsea Valley – market
information
Andre Kruger, Senior Market
Advisor
Innovation Norway
South Africa
www.innovationnorway.no
Opportunities in the Oil & Gas Industry – South Africa and
Region
Regional perspective
Domestic upstream activity is at an
early stage but there are current
exploration prospects in 4 regions
20 companies were allocated 36 permits/ rights/
applications
Orange River Basin
• Kudu gas discovery in Namibia (Tullow)
• Ibhubesi gas discovery (Forest, Sunbird, Petro SA) 200m WD
• Active DW/SW exploration for gas & oil targets (BHP,
PetroSA, Cairn India, Anadarko).
Bredadorp Basin
• Mossgas Synfuel Refinery
• Current production nearing end of life (PetroSA )
• PetroSA FO Field development started recently ($1bn)
• Block 11B/12B exploration area – large oil potential
(Total and Canadian Natural Resources) Exploration
Drilling
Tugela Basin
• Immature exploration play
• 4 wells – indication of oil system
Shale Gas
• Potential energy game changer for South Africa
• Potentially 8th largest global shale reserves: 390 tcf
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Economic growth in Africa is projected at around 6 % pa.
This growth is strongly driven by developments in oil and
gas producing countries.
Currently more than 40 countries on the continent are in
various stages of oil and gas exploration or production.
Cape Town, in the Western Cape region of South Africa is
strategically situated to service the activity along the
West Coast of Africa as well as the fast developing
activity on the East Coast, with special reference
to the Mozambique Channel. The Port of Durban is in
close proximity to Mozambique and East Coast.
South Africa , as the major economy in the Region, offers
a more favourable business climate than most of its
African peers.
South Africa has the industrial capacity to provide repair,
maintenance and engineering services to the industry.
Exploration/ major global oil field service companies/
logistic companies have already set up Regional Offices in
South Africa
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Value Proposition
Africa, and particularly Southern Africa will realize significant opportunities across the oil and gas value chain as the industry
develops towards its potential.
South Africa is the gateway economy for the region and offers a suitable base for extended operations along the
west and east coasts.
The country offers:
- A range of service providers
- A mature and industrial economy
- Outsourced fabrication, local agents and Joint Venture partners. Subsea structures being manufactured locally for Ghana
- Good logistics and connections to the region
- An excellent location for locating and
recruiting staff.
- Established, upstream service centre in Cape Town.
Emerging oil & gas zone in Saldanha Bay, close to Cape Town, on the West Coast, focused on repair,
maintenance and supply/ logistics activities. This area will also be a Freezone.
Conclusion
The opportunity for Norwegian companies would be to use South Africa as a base and service hub in Sub Sahara Africa
in order to benefit from the increased exploration activity in South Africa and the growing industry along the
West and East Coasts of Africa.
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Saldanha Bay Supply Base under development – Artist Impression
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From a Regional perspective
• As in other markets, the oil price lead to a far reaching response in Africa. Capital budgets were cut, frontier
exploration activity went down drastically
• Many of the significant frontier plays lie on the continent
• African Governments such as Mozambique (LNG Decree Law), Kenya, Tanzania and South Africa are reviewing
legislation in order to making it more investor friendly
• 76% of oil production coming from Nigeria/ Algeria Egypt and Angola in 2014
90% of gas production coming from Nigeria/ Libya/ Algeria and Egypt in 2014, but industry is poised for
major growth when East Coast comes on stream
• Natural gas expected to make a change to African landscape with planned investments in LNG trains
in Nigeria, Mozambique and Tanzania
• Companies are dealing with African challenges such as lack of infrastructure, local content and skills
shortages which are African realities, BUT uncertain legislation can be a show stopper
• Improved efficiencies, dealing with local content and skills development are key drivers for companies to
realise growth
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East and West Coast
• Mozambique
Legislation has progressed for large scale LNG projects. Anadarko and ENI will reach final investment
decision soon. Target for first gas- 2020
4 LNG trains to be completed by 2020
• Tanzania
Major discoveries by Statoil/ Opher Energy and BG Group/ Exxon Mobil
Onshore LNG plant proposal
First gas expected 2020- 2025
• Uganda
Substantial oil discoveries. Believe to have largest onland oil reserves in Sub Sahara
Tullow is the major player
Progress to commercial production has been slow due to political and regulatory issues
• Kenya
Tullow found oil reserves onland in Turkana basin. Production by late 2015/ 2016
Oil Bill was passed
Pipeline to the coast for export is under discussion
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• Nigeria
Second largest oil reserves on continent
Exploration in deep and ultra deep offshore areas
Conflict and infrastructure difficulties
• Angola
Main areas of exploration are in deep and ultra deep blocks
2009- 2013 production stagnated due to technical issues related to water injection systems,
gas cooling and FPSO’s
Outlook for production is positive. 10 projects scheduled to start production by 20171.2 mbd over next 4/5 years
• Ghana
Jubilee Field: largest find offshore West Coast last decade. Tullow major player with
Anadarko and Kosmos
Number of other projects starting production in 2016 (Tullow)
Other discoveries in exploration/ appraisal phase – high future potential
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