Slim Budgets will Target Key Projects

AOP talked to Robert Perkins, EMEA Editor for Oilgram News at Platts, about the challenges for Africa oil and gas markets, as well as the obstacles of limited infrastructure.

For countries like Mozambique and Tanzania with little experience and huge reserves, what strategies would you recommend to make the best use of their gas resources?

Mozambique and Tanzania will need to rely on the experience and budgets of the IOC’s in the countries to bring their huge gas reserves to market. Recent equity position activity with farm-ins marks a positive step but development timelines are likely to remain challenged by regulatory and commercial hurdles and reduced IOC incentives for bringing more LNG to the market amid the current global LNG glut.

East Africa has seen several recent oil and gas discoveries, but has very limited infrastructure. What are the short-term solutions to monetizing these resources, if any? What infrastructure should be prioritized in the coming years?

East Africa’s large oil finds will likely remain challenged by political and tribal hurdles to building key export pipelines. While most industry watchers are confident over the ultimate resource potential in Uganda and Kenya, government hopes of first oil exports from 2020 from the region are seen as optimistic.

What do you see as the challenges and opportunities for Africa oil and gas in the second half of 2017?

Looking ahead, explorers will continue to be more selective with their budgets to balance resource growth with funding constraints amid the ‘lower for longer’ oil price outlook.  Slimmer upstream budgets will likely continue to target projects with short term production horizons.