Sub-Sahara Projects Offer Growth Potential

New investment in oil and gas plays across Sub-Saharan Africa is expected to create interesting opportunities and drive breakbulk growth this year, according to consultancy Verisk Analytics.

Analysts at Verisk subsidiary, Wood Mackenzie, expect fewer final investment decisions, or FIDs, across the region in 2019 compared to last year, but predict that those that move forward be much larger in scope.

“Associated reserves and capex will increase three-fold,” said Anthea Pitt, communications director at Wood Mackenzie, adding “Mozambique will lead the pack.”

Citing projects underway by Anadarko in Area 1 and ExxonMobil/Eni in Area 4 in Mozambique, the consultancy predicts combined investment of US$40 billion, pushing Mozambique's gas production up 10-fold to 5 billion cubic feet per day.

 

Exploration to Mature

With larger FIDs planned, exploration activity in Sub-Saharan Africa is also expected to mature in 2019, with the number of exploration wells predicted to nearly double to about 40, compared to the 24 completed in 2018.

“The majors remain at the forefront, targeting deepwater, high-impact, high-value prospects. Total will complete its Brulpadda-1 AX wildcat offshore South Africa in the first quarter. The prospect has an estimated resource of over 1 billion barrels,” Wood Mackenzie states.

 

Record Deepwater Development

Venus-1 in southernmost Namibia, is also expected to boost the outlook for Total in ultra-deepwater development in the Southwest African Coastal basin.

“Its 3,000 meters water depth will be a record for Africa. However, Namibian exploration is more associated with dusters than gushers, so there is risk here,” a spokesperson for Wood Mackenzie said.

Downside risk in the Sub-Saharan sector also comes from the upcoming Nigerian elections, according to sister company Verisk Maplecroft, which predicts that incumbent President Muhammadu Buhari has only a 45 percent chance of success.

Based in New Jersey, Verisk provides data analytics and risk assessment globally.

Photo: Offshore vessel. Credit: Anadarko