Capital investment in the oil and gas industry in sub-Saharan Africa has witnessed a cut by $100b over the next five years, according to Wood Mackenzie’s latest report on upstream activity, East African Business Week reported. “As a result, liquids production will decline to 2.6mb/d by 2030, down from 4.8mb/d presently,” the report read, informed ESI Africa.
“Exploration cuts in the region will also contribute to a longer-term production slump as explorers have shied away from greenfield prospects, in favor of appraising known discoveries. However, the confirmation of the giant Owowo discovery in deepwater Nigeria shows the quality of resources Sub-Saharan Africa still has to offer,” Femi Oso, senior research manager for Sub-Saharan Africa at Wood Mackenzie, explained.
Wood Mackenzie expects a slow recovery for exploration urging governments in sub-Saharan Africa to revive the upstream oil and gas industry by offering attractive fiscal terms rather than look to increase state revenues.
The biggest upstream success story in sub-Saharan Africa continues to be East Africa’s emergence as a gas region of global importance and notably Tanzania. With over 168 tcf of gas found and limited regional demand, East Africa is on track to become a major global LNG supplier and various export projects are awaiting final investment decision.