With its recent crude discoveries, Africa has shot to the limelight as the new hunting ground of global oil companies. Namibia discovered half a billion barrels of oil equivalent (bboe) in recoverable oil and gas reserves in 2022; since then, international oil companies (IOCs) have been searching for crude reserves in various regions spread all across the African continent.
In 2022, British oil giant Shell announced the presence of hydrocarbons in Namibia’s Orange Basin after the completion of drilling of the Lesedi-1X, the fourth exploration well in the region. Soon after, it forged partnerships with Namcor and QatarEnergy to drill two more exploratory wells. Shell has also secured a permit from the Namibian government to drill ten more exploration and appraisal wells in the future.
Discovery Overflow
A recoverable reserve of approximately 285 million barrels was announced at the Jonker site, amounting to 57% of the total discoveries this year. It is the only offshore discovery besides numerous other discoveries being onshore.
In the first quarter of this year, Algerian national oil company Sonatrach announced that it would bring 20% of the total volume from its six small-sized discoveries. Alegria is witnessing a new wave of oil and gas production, which could be utilised to establish itself as a reliable energy supplier for Europe.
An Australian upstream oil and gas company, Invictus Energy, announced in May of this year that a mud gas analysis has confirmed the availability of light oil, gas condensate and helium in Mukuyu-1 located in the Cabora Bassa Basin in Zimbabwe. After this success, Invictus has plans to start drilling projects for the Mukuyu-2 appraisal well, located 6.8km northeast of Mukuyu-1 with a depth of 3,700m.
Over the next 18 months, 66 drilling operations have been planned, amongst which three are in the process, and 17 more are most likely to start operations soon.
This plethora of oil and gas discoveries covers nearly the whole continent. Sasol’s Bonito-1 well in the PTC-C concession area of the Mozambique basin to Tatneft’s F-1 in Libya and Wintershall’s ED-2X in Egypt. These discoveries are transforming the African continent into a significant global petroleum market supplier. It has discovered a total volume of nearly 500 MMboe of oil and gas reserves just in 2023.
Lack of domestic efficiency
The commendable discoveries of oil and gas exploration in Africa can change the continent’s stance in the global oil market and have the potential to attract foreign investments from energy giants. The African Economic Conference (AEC) views this opportunity to make a turnaround for the domestic petroleum industry.
International oil companies (IOCs) have highlighted an issue that though the seismic and geological reports have claimed Africa can become a major global supplier of crude, the local administration and lack of infrastructure stand in the middle of the progress.
The governments of oil-producing nations in Africa need to take a step forward to resolve domestic inefficiencies and develop a seamless way to attract foreign investments. They can ensure the optimal utilisation of fossil fuel discoveries for the betterment of their economies.
The oil industry has the capability to completely change the income levels of Africans and bring economic prosperity to poor countries. A flourishing oil industry will generate more employment and business opportunities. This will bring exploring companies for future drilling operations, attracting investment, and catering to the growth of the overall economy.
Concerns over carbon neutrality
The rising concerns over transitioning into a carbon-neutral energy source have raised questions about the discovery of hydrocarbons in these times. African governments argue that if their oil industry receives foreign investment today, then they will be able to fuel their carbon neutrality projects on their own. This will reduce their dependence on any sort of subsidies that the world might provide them.