Oil
Wednesday, 30 November 2011 09:21

Oil and gas sector will drive African growth

Ernst & Young’s recently released report, “Africa oil and gas: a continent on the move”, reflected that Africa’s economic output has doubled over the past decade, and six African economies were among the fastest-growing in the world for the 2001-2010 period. African economies generally proved resilient through the financial crisis, with the International Monetary Fund forecasting sub-Saharan growth rates of 5,5% in 2011 and 6% in 2012.

This report confirms that resources generally, and oil and gas in particular, have played an important part in this growth. Nineteen African countries are significant producers of oil and gas, with significant new discoveries in Ghana, Tanzania, Mozambique and Uganda adding some new names to the established producers like Libya, Nigeria, Angola, Egypt, Algeria and Sudan.

“Investors are seeing huge potential in African oil and gas sector,” says Elias Pungong, the African oil and gas sector leader at Ernst & Young. “There are some risks in Africa, we all know that, but the returns are commensurately high. And what’s particularly exciting, is the steady stream of new discoveries in countries like Uganda and Ghana, and prospected fields in others, including Mali, Sierra Leone and Kenya.”

African oil supply, including crude oil, lease condensates, natural gas liquids and other liquids, has increased sharply over the past years, averaging just less than 11-million barrels per day in 2010. Conventional forecasts see this growth being maintained, albeit more slowly, over the next 25 years. Gas growth is predicted to be even stronger, with supply possibly set to double to about 15-trillion cubic feet (tcf) by 2035. 1

“Less conventional estimates predict that the likely growth in the African oil and gas industry could be five times the current level, based on what remains unexplored in Africa versus currently known sub-soil assets,” Pungong adds. “Whatever view one takes, it’s clear that this is a sector with tremendous potential.”

Ernst & Young, Cameroon
Elias Pungong
Mobile: +23 77 52 43 172
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Note
1: 25º in Africa will publish the full report from Ernst & Young in the next issue of the magazine. Watch this space!

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