Major multi-national oil companies such as ExxonMobil, ChevronTexaco, Shell and BP intend to step up oil exploration and production in Africa.
Major multinational oil companies such as ExxonMobil, ChevronTexaco, Shell and BP intend to step up oil exploration and production (E&P) projects and investment on the African continent.
It was revealed at the ninth annual Africa Upstream 2002 Conference in Cape Town on Wednesday that the companies had aggressive expansion plans.
Top E&P executives from four of the super-majors, as well as conference chairman Dr Duncan Clark from Global Pacific & Partners, “agreed there would be rising demand and competition for strategic African oil and gas assets in the near future”.
African oil assets were becoming increasingly attractive in the face of continuing instability in the Middle East and the rising costs of E&P activity in existing, well-developed fields, delegates said.
Deepwater E&P projects, such as those offshore West Africa and Morocco, were also among the most attractive in the world in terms of return on investment and risk-return ratios.
"Africa has a strategic priority now in the global oil industry, along with Russia and central Asia," Clarke said. "The next 25 years will be a boom period for the African oil industry."
He said he believed the global oil industry was on the verge of a "scramble" for African assets, building on the US government’s stated intent to have 25 per cent of its oil imports come from West Africa by 2015 (this figure is currently 15 per cent).
European oil company investment in North Africa was rising substantially, Asian oil companies like Petronas and the Korean National Oil Company (KNOC) were pursuing projects, and even Chinese and Russian companies were becoming more aggressive on the continent, Clarke added.
"African independents and national oil companies are also awakening and stepping out beyond their borders, such as PetroSA and Sonangol," he said.
Ken Evans, vice-president for Sub-Saharan Africa for ExxonMobil, told delegates his company currently produced about one million barrels of oil per day from seven African countries, and was looking to double its already substantial oil production capacity in Nigeria over the next few years. At the same time, it had five major projects in Angola representing an investment of some R156 billion.
"The balance of risk versus reward in Africa is now tipped in favour of African investment," Evans was quoted as saying. "There are numerous opportunities available with a potential for good returns on investment, and fiscal regimes are favourable."
At the same time, ChevronTexaco’s General Manager for Deepwater Asset Development in Nigeria and mid-Africa, Jim Pearce, revealed that his company planned to invest R209 billion in energy-related projects in Africa over the next five years.
ChevronTexaco has operations in over 40 African countries. It has significant operations in Nigeria and Angola, and "most promising" investments offshore Equatorial Guinea, among many others.
Ebbie Haan, regional vice-president for exploration with Shell E&P International, said Shell had a "quite aggressive" investment plan to double its total African oil and gas production over the next five years (2002-07). The group was active in nine countries on the continent, producing about one million barrels of oil per day representing an equity share of about 360 000 barrels per day.
