JOHANNESBURG, South-Africa,** October 30, 2012/ *– *With open access and
attractive leasing terms, Africa’s oil and natural gas resources continue
to attract a broad spectrum of investors, according to a new report from
Ernst & Young (http://www.ey.com/za) Natural gas in Africa – The frontiers
of the Golden Age launched at Africa Oil & Gas Week. ****
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Elias Pungong, Ernst & Young’s Oil & Gas Leader for Africa says, “Natural
gas development holds tremendous opportunity for Africa. It can be a
primary driver of economic growth and broader social development, as well
as a major spur for local employment growth and infrastructure development.”
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*The big future for African gas lies in the East of Africa*
The report spotlights Africa’s rapidly evolving natural gas sector, and
while Algeria, Nigeria, Egypt and Libya are identified as holding
significant reserves, the production of gas is considerably lower in these
countries. More recently, the sector’s growth has been concentrated in West
Africa, with the huge associated gas resources that accompanied the
deepwater oil boom, led by Nigeria and Angola. While the West African gas
growth will continue as flaring is reduced and local gas infrastructure is
developed, the big future for African gas lies in the East of Africa with
the massive offshore gas discoveries in East Africa, particularly in
Mozambique and Tanzania.****
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Pungong comments: “While the risk rankings overall in Africa are quite
high, for many countries the “risk trend” is improving, Most importantly
though, the opportunities for Africa in this sector are enormous and the
challenges and risks can be addressed and mitigated.”****
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Africa’s gas reserves will be more than just headline opportunities for the
national oil companies (NOCs), the deep-pocketed oil and gas majors, their
big international exploration and production (E&P) counterparts as well as
well-known African oil and gas specialists. ****
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*Opportunities for local supplies abound*
The ramp-up in E&P activity brings opportunity for the oilfield services
(OFS) segment, but again, not just for the big international OFS players,
but also for local and regional companies that can contribute to the supply
chains and to the associated upstream support infrastructure. The broader
infrastructure build-out could also include massive export facilities, as
in the case of liquefied natural gas (LNG), but also smaller projects such
as pipelines and gas distribution networks to support local/regional
domestic gas demand. ****
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The associated development or expansion of a domestic gas demand sector
could also bring substantial commercial opportunities in the power
generation, industrial and even transportation sectors. Indeed, many of the
gas flaring reduction efforts are tied to domestic gas use projects.****
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Pungong concludes, “African governments and regional NGOs will of course
have critical roles to play – first and foremost, developing a meaningful
and practical master gas development plan, one that addresses the upstream
tax and licensing models, as well as the necessary infrastructure issues
and investments, and local training and job creation issues. Collaboration
and partnerships with the IOCs, both big and small, will likewise be
critical.”****