Africa to Supply 30 Percent of the World's Liquids Increase and 25 Percent of Global LNG Capacity by 2010
February 13 2006 - 7:00AM
Business Wire
Ron Mobed, Energy President and COO, IHS, Addresses Global Energy
Challenges at IP Week in London Africa will supply 30 percent of
the world's liquid production increase and more than 25 percent of
global LNG capacity by 2010, said Ron Mobed, president and chief
operating officer of the Energy segment of IHS, a leading provider
of oil and gas information and consulting services. Currently,
Africa's liquids production constitutes 12 percent of world
production. This significant contribution to global oil supply
growth will be a critical source to the global market, but
particularly to the U.S., where the gap between domestic production
and increasing imports has grown at a rapid rate, Mobed said at a
presentation on "Africa's Role in Meeting Energy Demand" today at
the International Petroleum Week (IP Week) energy conference in
London. "The number and size of hydrocarbon discoveries continued
to decline during 2004-2005 and many areas of the world became less
accessible due to political constraints. Oil and gas companies are
increasingly seeking access to larger oil reserves in Africa to
meet growing global demand," Mobed said. "Africa's major oil and
gas producing provinces will likely continue to attract huge
exploration investments and yield larger-than-average discoveries.
Exploration will expand from these successful plays into adjacent
countries and provinces, especially on the Atlantic continental
margin, where access to export markets is key." According to IHS
statistics, African discoveries in the period 2000 to 2004 have
contributed nearly 25 percent in the international liquids reserves
(exclusive of onshore U.S. and Canada) and 12 percent of the
discovered gas. Approximately 300 billion barrels of oil
equivalent, two-thirds of them liquids, have been discovered in
Africa through 2004, 85 percent of which has been found in just 10
basins, with Libya's Sirte Basin yielding the largest resources (22
percent of Africa's total). At the end of 2004, the estimated
remaining liquids resources in Africa are nearly 105,000 million
barrels of oil (MMb): Nigeria (35,651 MMb); Libya (26,842 MMb);
Angola (13,619 MMb); Algeria (14,169 MMb) and Egypt (3,428 MMb).
Africa's remaining sub-Saharan and Saharan countries account for an
additional 11,173 MMb). Sudan, currently a political wildcard, is
also rapidly expanding both its production and reserves. Additional
forecasts by Cambridge Energy Research Associates (CERA), an IHS
company, show that Africa will add 38 percent in oil production,
contributing an additional four million barrels of oil per day by
2010. A substantial portion of this growth will be from new giant
fields in Nigeria, Angola and Algeria. This growth represents 30
percent of the projected 13,650 million barrels per day global
capacity growth. Giant deepwater discoveries in sub-Saharan Africa
are expected to add more than 2,200 million barrels per day, with
Angola and Nigeria being the major contributors. Africa's
contribution to the world energy supply however is not limited
strictly to oil. The continent's new LNG capacity will be a growing
source for natural gas. At the end of 2005, Africa had 50 million
metric tons per year of the world's online LNG capacity of 173
million metric tons per year, with Algeria and Nigeria leading the
way. Egypt opened a new train that will accommodate 3.6 million
metric tons of LNG per year, while Equatorial Guinea and Angola
have announced their first LNG projects. "After 9/11, U.S. energy
companies sought greater diversity in supply and began to refocus
on Africa as a complementary source of energy," said Mobed. "Now,
five years later, we see a fundamental shift occurring in the
economic and political controls on oil and gas exploration. Namely,
we see increasing dominance of national oil companies competing
against international and U.S. oil companies for access to
hydrocarbon resources. "This is happening globally, but in Africa,
for example, according to IHS data, 10 years ago, national oil
companies had 95 license holdings in Africa. By 2005, however, this
number had increased to 216, so national oil companies,
particularly Asian companies, are becoming much more aggressive in
securing energy supplies to support their growing economies," Mobed
said. The most active national oil companies operating in Africa
are Statoil (Norway), CNPC (China), Petronas (Malaysia) and
Petrobras (Brazil). China has been taking bold steps in recent
years to secure raw materials in Africa to fuel its economy, and
recently took the dramatic step of purchasing a 45 percent stake in
Nigeria's giant deepwater Akpo field for U.S. $2.3 billion. And in
just the past few weeks, China and India agreed to cease competing
for hydrocarbon resources and to cooperate in securing new
exploration deals. Despite continuing political and civil unrest in
countries like Nigeria, Mobed said companies are still attracted to
the region because of the enormous hydrocarbon potential,
particularly in the offshore. And while some African countries have
increased their "state-take" to correspond with perceived higher
prospectivity or potential, other African nations have balanced
their fiscal terms with their country's E&P performance. Still,
in other countries, their terms remain out of balance with their
performance, Mobed added. "However, on a positive note," he said,
"is that many African countries with frontier prospects realize the
need to promote their opportunities and to provide investment
incentives. Their participation in leading industry expos like
NAPE(R) Houston, APPEX London, and the APPG International Pavilion
creates competitive pressure that often helps induce changes in
their legislation and fiscal terms. Better incentives, combined
with higher oil prices, make it possible for oil and gas companies
to undertake the risks and considerable costs associated with
frontier exploration and development." Mobed's presentation was
part of a panel addressing "The Changing Role of the International
and National Oil Company in Meeting Global Energy Demand." Other
speakers on the panel included Sir John Collins, president of the
Energy Institute; Malcolm Wicks, MP energy minister; Joroen van der
Veer, chief executive of Royal Dutch Shell; John Pearson, deputy
managing director of AMEC; and H.E. Dr. Ibrahim Bahr al-ulum, oil
minister for Iraq. IHS (www.ihs.com/energy) provides integrated
E&P information, software and consulting services to oil and
gas companies worldwide. IHS is one of the leading global providers
of critical technical information, decision-support tools and
related services to customers in a number of industries including
energy, defense, aerospace, construction, electronics and
automotive. (NYSE:IHS). (www.ihs.com). IHS FORWARD-LOOKING
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