Sub-Saharan Africa, especially its largest oil producers Nigeria and Angola, will struggle to increase oil production until the middle of this decade, as international majors shift their investment priorities, data and analytics firm GlobalData said on Friday.
Lack of sufficient investment and few new projects could derail sub-Saharan Africa’s ambition to increase crude oil production until 2025 after a difficult pandemic in 2020, GlobalData said in its report.
As international oil majors reassess their investment priorities and projects compete for less capital under an ongoing investment discipline, Nigeria and Angola, OPEC‘s main African producers, see few new projects approved.
According to GlobalData, both countries will experience a drop in crude oil and condensate production starting this year. At the same time, they also have a relatively small number of oil projects that would go into production by 2025.
Sub-Saharan Africa has a lot of potential and could easily overtake Europe in terms of oil and gas production, said Conor Ward, oil and gas analyst at GlobalData, commenting on the results.
âHowever, companies have been more cautious about their investments than ever. Some of the huge discoveries made over the past decade have seen significant delays with no Final Investment Decisions (FIDs) in sight: as is the case. with Shell’s Bonga Southwest / Aparo, which was discovered over 20 years ago, âsaid Ward.
âSub-Saharan Africa is seeing a shift in investments from the most developed countries in the region, notably Nigeria, and more towards border countries such as Mauritania, Senegal, Mozambique and Uganda, because the fiscal conditions offered by host countries are much more attractive and have a large untapped resource base, âadded Ward.
Nigeria faces the surface risks to businesses if it is to attract investment, the analyst noted.
Nigeria last month approved a new oil industry bill for Africa’s largest oil producer and exporter, ending 20 years of debate and delay. International oil majors have not flocked to Nigerian oil assets now that fossil fuels vie even more fiercely for Big Oil’s investment plans as the majors begin to shift more funding to lower energy sources. carbon emission.
By Tsvetana Paraskova for OilUSD
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