PwC’s review on Africa’s oil & gas industry reveals tremendous growth prospects driven by new resource discoveries

AFRICA – Audit firm, PwC Africa’s annual Africa oil & gas review for 2019 has revealed that Africa’s Oil and gas is poised for further growth thanks to new resource finds in various parts of the continent among other factors.

Speaking during the release of the report, Andries Rossouw, PwC Africa Energy Utilities & Resources Leader, noted that renewed optimism has returned to Africa’s oil & gas industry on the back of a rebound in prices and increased investor interest.

He further noted that although the African oil & gas industry has been through some difficult and challenging years in the wake of the oil price crash, it has been able to restructure itself and is more competitively placed in terms of efficiency and operational performance.

According to PwC’s review, Africa’s oil & gas industry holds the potential for further growth mainly driven by an increase in investor appetite and a rebound in prices.

The report further notes that new oil & gas finds off the coast of Africa have led to an increase in investment in infrastructure, technological advances, updates in regulation and improved governance, as well as the development of new skills.

Africa’s oil & gas industry holds the potential for further growth mainly driven by an increase in investor appetite and a rebound in prices.

New oil & gas finds off the coast of Africa have led to an increase in investment in infrastructure, technological advances, updates in regulation and improved governance, as well as the development of new skills.

One of the most dramatic finds in Africa over the past decade according to the report is Mozambique’s natural gas estimated at over 180 tcf.

The discovery has already unlocked the first three large-scale LNG projects and has the potential to position Mozambique as the third largest LNG producer in the world after Qatar and Australia by 2030, the report notes.

When it comes to growth and development, the review revealed that Africa’s oil production increased slightly in 2018 but a rise in other markets resulted in a decline in the continents global oil share by 1% from the prior year standing at 125.3 billion or 7.2% of total proven oil reserves.

Proven gas reserves on the other hand grew by 4.5% at the end of 2018 to stand at 509.6 which amounts to 7.3% of global proven reserves and this according to PwC catalyzed an n interest in Africa’s gas reserves leading to a series of successful LNG projects subsequently resulting in a liquefaction capacity of 18% of the total global capacity.

When it comes to capital expenditure, the report noted that the decline in investments occasioned by a global oil price crash continued into 2018.

This is however, expected to change as we move into 2020 with the audit firm projecting that capital expenditure is expected to increase at an annual compound growth rate (CAGR) of 4% to more than US$70bn in 2030.

The report concluded by noting that African national oil companies (NOCs) and their partners, contractors and funders must chart a course through increasingly uncertain waters.

The future for the African oil & gas industry is exciting as well as challenging and we can look forward to the growing participation of Africa as a global consumer and supplier of energy, the report concluded.

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