Current developments in the African oil and gas sector provide an intriguing mixture of the old and new. While established producers such as Nigeria, Angola and Algeria continue to go from strength to strength, new oil and gas powers such as Chad and Namibia are beginning to make their mark. In conjunction with rapidly increased production in areas like Sudan and Equatorial Guinea, such developments are providing the African hydrocarbon industry with increased strength in depth. Neil Ford reports.
Nigeria has been the biggest recipient of foreign oil investment for many years. Now, however, despite the vast sums being poured into offshore projects and the continued development of the Niger Delta, it looks as if Angola could be challenging that position.
While production on Chevron Texaco's onshore interests in Cabinda continues to rise, it is deepwater and ultra deepwater Angola that is attracting most investment. This is partly because deepwater projects are more expensive as a result of the technical hardware required to operate at such depths. However, the number and importance of the discoveries that have been made in Angola have also driven investment by most of the majors.
The Kuito, Xikomba, Girassol and Jasmin fields have already been brought into production and a large number of other deepwater fields are scheduled for development (see table). Apart from the Norwegian firms, Norsk Hydro and Statoil, there are other big companies involved. All the projects listed require investment of more than $1 billion. The three-phased Kizomba project, which is operated by ExxonMobil, will require a huge $11bn. Production over the three phases could top a combined 750,000 barrels a day (b/d).
Probably the most high profile project in the African oil sector since the turn of the millennium has been the Chad-Cameroon pipeline scheme. Although production on Chad's Doba fields is expected to reach 250,000 b/d from reserves estimated at one billion barrels, new developments in Nigeria and deepwater Angola are of far more importance in terms of the volume of crude on offer and the level of profits to be made. But what has made the Chad-Cameroon pipeline so well publicised has been the contentious nature of the development. A host of social, environmental and financial objections to the project made it a cause celebre of countless non-governmental organisations. The World Bank eventually became involved, partly in order to enable the project to go ahead but also to ensure that minimum standards on pollution and financial propriety were observed.
It is on this level that the project is also...