Among the key emerging oil and gas exploration markets in Africa, Kenya has the largest number of active exploration blocks, followed by the Republic of Tanzania, Mozambique, Cameroon, Republic of Congo, Chad and Uganda (see Figure 1). Kenya, Tanzania, Chad, Mozambique and Uganda also have a large number of planned exploration blocks.
A rising number of oil and gas discoveries in Africa are prompting exploration and production (E&P) companies to investigate the region. So far, 64 discoveries have been made in the emerging exploration markets between 2007 and 2012. Uganda, Mozambique and the Republic of Tanzania are the countries with the most hydrocarbon discoveries (see Figure 2).
Offshore potential in East Africa
In response to data collected through seismic and electromagnetic surveys, many international oil and gas companies are focusing on East Africa in particular as a region with offshore potential. Mozambique has so far had 14 gas discoveries offshore, which has led to Anadarko Petroleum, one of the world’s leading oil and gas companies, planning a liquefied natural gas (LNG) export terminal in the country. Recent finds in Mozambique and Tanzania have prompted some companies to also take an interest in Kenya.
Threats to oil and gas operations
The uncertain political and economic situation in the region is one of the key challenges facing oil and gas companies. Such circumstances have, in the past, led to several international companies withdrawing from the continent, while others have farmed out exploration blocks to other firms.
In 2010, Malaysia’s Petroliam Nasional Berhad (Petronas) farmed out its exploration blocks in Ethiopia to South West Energy due to insecurity in the Ogaden Basin.
Other issues that threaten the operations of oil and gas companies in the region include changes in taxation, pricing policies, and customs and duties. International boundary disputes, such as those between Somalia and its neighbour countries that have led to armed confrontations, are also a matter of concern.
Leading E&P companies
Tullow Oil and Total are the leading E&P companies in the emerging exploration markets in Africa. Tullow Oil is estimated to have the largest number of exploration blocks of all the oil and gas E&P firms operating on the continent. It has 20 active blocks, which are present in Ethiopia, Ghana, Kenya, Liberia, Tanzania and Uganda. The company has so far made 15 discoveries in Uganda, mainly in exploration blocks 1 and 2.
Total, meanwhile, leads in terms of net production. The company operates in 18 exploration blocks in countries such as Congo, Kenya and Uganda, where it produced 123,000 barrels of oil equivalent (BOE) a day in 2011.
The company has made 15 oil and gas discoveries in Congo and Uganda between 2004 and 2011; ten are located in the former and five in the latter. Most of the discoveries were made in the Lower Congo Basin, Congo, and Pakwach, Uganda.
