Namibia has discovered a major offshore oilfield in its southern territorial water – possibly giving it access to 11-billion barrels in oil reserves.
Production could begin in four years, Mines and Energy Minister Isak Katali announced to Namibia’s parliament on Wednesday (7 July 2011).
The find could put Namibia on par with neighbouring Angola, whose reserves are estimated at around 13-billion barrels and whose production rivals Africa’s top producer, Nigeria. Most of the oil is thought to be concentrated just off the country’s south coast.
If the estimated 11-billion barrels is confirmed, the development could change the geopolitics of the Southern African region forever, for better or worse. At current prices, 11-billion barrels translates to US$1, 2-trillion in oil revenue, equal to the annual GDP of the entire African continent. That amount of energy could also power Southern African economies for decades, helping to pay for investments in economic infrastructure, education and skills, health, and other pressing developmental areas. More immediately, fuel prices could be reduced across the region, particularly if the oil is refined locally.
However, oil has proved to be a mixed blessing for most African countries. It has tended to lead to a rise in state corruption, and to the growth of often armed cessationist movements in oil-rich regions. Angola and Nigeria provide examples of both developments.
Katali said that Enigma Oil & Gas, owned by London-listed Chariot Oil & Gas, has identified 11 prospects along the southern coast, adding that first production could begin as early as 2015. Enigma holds 50% equity in the offshore Southern Block, together with Brazil's Petrobras.
According to Katali, another Brazilian company, HRT Oil & Gas Ltd, has raised US$1,3-billion on the Brazilian stock market, with US$300-million earmarked for oil and gas exploration in Namibia. He said that HRT has certified about 5.2-billion barrels of potential reserves.
In his statement to parliament, Katali added that HRT would drill three to four wells in that area as early as next year.
Another find off Namibia’s central coast called Delta Prospect contained recoverable resources of up to 2-billion barrels of oil, by Arcadia Expro (AEN) Namibia and British firm Tower Resources, he said.
Namibia has long been seen as a potential new source of oil, hampered by a lack of exploration to determine the extent of its reserves. Its offshore geology is similar to Brazil, which is seeing a boom in oil.
Source: Southern Africa Report
Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts
Monday, July 9, 2012
Monday, September 19, 2011
Southern Africa as the next "oil boom"
JOHANNESBURG - Recent discoveries of oil in SA’s neighbours
Mozambique and Namibia may revolutionise economies in the region, and
provide substantial opportunity for SA, provided they are managed right.
An estimated 11bn barrels worth of oil were recently discovered in fields around Namibia’s southern coast while American Oil Company Anadarko has discovered oil reserves off the coast of Mozambique.
Although these discoveries are not massive in global terms they are, especially the Namibian discovery, significant, and are likely to spark an intensification of exploration activity in the region which may result in yet more findings.
And SA, according to Deloitte’s global head for oil and gas, Adi Karev and his South African counterpart, Anton Botha, may stand to benefit significantly.
“There’s a saying in the oil and gas business that you can do two things when you explore (you can) explore next to the well that you have already found and your probability of finding more is higher, or explore further away in places you’ve never explored before and that probability is lower.
“The more we find in Africa, the higher the probability that we will find more,” said Karev.
In light of these discoveries, asked whether Africa could be the next oil growth story, Karev responded by saying “it is, without any doubt.”
Africa “represents a higher potential than it has in the past”, he said indicating that it has now become one of “multiple” regions with significant potential to benefit from an oil boom.
But “Africa is not the USA,” he commented as he graciously recognised that Africa is a continent, not a country and “there are countries that posses, within that context of higher promise (even) higher promise”.
That level of promise is related not only to the size and number of reserves, said Karev, but to the available levels of technological expertise and regional infrastructural capacity needed to exploit those reserves.
This is where SA stands to benefit.
“When you find oil in most developed economies where the environment for services is ripe and acceptable (and) in environments where you find oil in proximity to economies that are well developed, and SA is a well developed economy, there are a number of ‘circles’ (of benefit and growth) that come out of that,” said Karev.
The immediate benefit comes from the extraction of that oil and the engineering activities associated with that extraction and SA stands to benefit by leveraging its existing capacity to help in these efforts.
But it is in the down-stream support services required for oil (and gas) extraction that offers the primary opportunity for SA.
“The closer oil finds and gas finds come to the borders the greater the opportunity for us in SA to leverage the expertise that we have and the capabilities that we have,” says Botha.
“Oil services will boom in this part of the world … with SA having the ports, engineers, services and logistics … to support this industry that’s absolutely booming in Africa, I believe … that oil services (in SA) will boom,” he said.
The responsible exploitation of oil could be a game changer for Sub-Saharan Africa but for it to be a success there will need to bet a significant and “mature” buy-in from the region’s governing elite, say Karev and Botha.
Political instability and, dare we say greed, may pose the greatest risk to a potentially great opportunity.
“There are a number of ways that politics tends to impact the ‘appropriate exploitation of reserves’,” says Karev, “not the least of which is the recognition that you cannot run the exploration and production activities that are long term, very engineering oriented and need to be intensively managed (and) operationally controlled in cycles that mimic the cycles that are associated with political changes (in Africa and elsewhere).
“When you do you end up under-exploiting, you end up under-leveraging and creating inefficiencies”.
Ultimately, says Karev, the investment/extraction cycles associated with oil last upwards of four decades, political cycles fluctuate in a matter of years, creating a stable environment across these cycles is the challenge.
“What we have not seen in Africa is the ability of creating this arm-length relationship,” where politicians allow oil projects to run without too much interference while creating an environment of sustained support.
Source: Moneyweb
An estimated 11bn barrels worth of oil were recently discovered in fields around Namibia’s southern coast while American Oil Company Anadarko has discovered oil reserves off the coast of Mozambique.
Although these discoveries are not massive in global terms they are, especially the Namibian discovery, significant, and are likely to spark an intensification of exploration activity in the region which may result in yet more findings.
And SA, according to Deloitte’s global head for oil and gas, Adi Karev and his South African counterpart, Anton Botha, may stand to benefit significantly.
“There’s a saying in the oil and gas business that you can do two things when you explore (you can) explore next to the well that you have already found and your probability of finding more is higher, or explore further away in places you’ve never explored before and that probability is lower.
“The more we find in Africa, the higher the probability that we will find more,” said Karev.
In light of these discoveries, asked whether Africa could be the next oil growth story, Karev responded by saying “it is, without any doubt.”
Africa “represents a higher potential than it has in the past”, he said indicating that it has now become one of “multiple” regions with significant potential to benefit from an oil boom.
But “Africa is not the USA,” he commented as he graciously recognised that Africa is a continent, not a country and “there are countries that posses, within that context of higher promise (even) higher promise”.
That level of promise is related not only to the size and number of reserves, said Karev, but to the available levels of technological expertise and regional infrastructural capacity needed to exploit those reserves.
This is where SA stands to benefit.
“When you find oil in most developed economies where the environment for services is ripe and acceptable (and) in environments where you find oil in proximity to economies that are well developed, and SA is a well developed economy, there are a number of ‘circles’ (of benefit and growth) that come out of that,” said Karev.
The immediate benefit comes from the extraction of that oil and the engineering activities associated with that extraction and SA stands to benefit by leveraging its existing capacity to help in these efforts.
But it is in the down-stream support services required for oil (and gas) extraction that offers the primary opportunity for SA.
“The closer oil finds and gas finds come to the borders the greater the opportunity for us in SA to leverage the expertise that we have and the capabilities that we have,” says Botha.
“Oil services will boom in this part of the world … with SA having the ports, engineers, services and logistics … to support this industry that’s absolutely booming in Africa, I believe … that oil services (in SA) will boom,” he said.
The responsible exploitation of oil could be a game changer for Sub-Saharan Africa but for it to be a success there will need to bet a significant and “mature” buy-in from the region’s governing elite, say Karev and Botha.
Political instability and, dare we say greed, may pose the greatest risk to a potentially great opportunity.
“There are a number of ways that politics tends to impact the ‘appropriate exploitation of reserves’,” says Karev, “not the least of which is the recognition that you cannot run the exploration and production activities that are long term, very engineering oriented and need to be intensively managed (and) operationally controlled in cycles that mimic the cycles that are associated with political changes (in Africa and elsewhere).
“When you do you end up under-exploiting, you end up under-leveraging and creating inefficiencies”.
Ultimately, says Karev, the investment/extraction cycles associated with oil last upwards of four decades, political cycles fluctuate in a matter of years, creating a stable environment across these cycles is the challenge.
“What we have not seen in Africa is the ability of creating this arm-length relationship,” where politicians allow oil projects to run without too much interference while creating an environment of sustained support.
Source: Moneyweb
Thursday, July 7, 2011
Massive potential oil find in Namibia
Namibia's mines and energy minister Isak Katali announced on Wednesday that Enigma Oil & Gas has hit upon oil reserves estimated at 11 billion barrels off Namibia's coast. The discovery can push Namibia to be on par with Angola which boasts of reserves worth 13 billion barrels.
Katali stated that Enigma Oil & Gas, which is owned by London-listed Chariot Oil & Gas, has discovered 11 fields along the southern coast, the largest of them being the Nimrod Prospect in 350 meters (1,150 feet) depth. He said that if proved successful, this could carry four billion barrels of oil and up. Enigma which holds a 50% equity in the offshore Southern Block along with Brazil's Petrobras intends to kick start production in 2015.
With HRT Oil & Gas, a Brazilian company, looking to invest $300 million in oil and gas exploration in Namibia, Katali anticipates offshore Namibia turning into a great producer of oil and gas in a short time. HRT has already certified about 5.2 billion barrels of potential reserves and would drill three to four wells in that area as early as next year, he added.
Furthermore, the Delta Prospect off Namibia's central coast is also a hot bed for recoverable resources of up to two billion barrels of oil, held by Arcadia Expro Namibia and British firm Tower Resources, he said.
"We expect that six to eight wells to be drilled in Namibia's waters in the next 18 months, the highest number in Namibia's exploration history," he said.
Source: OilVoice
See also: The Namibian Oil Rush
Katali stated that Enigma Oil & Gas, which is owned by London-listed Chariot Oil & Gas, has discovered 11 fields along the southern coast, the largest of them being the Nimrod Prospect in 350 meters (1,150 feet) depth. He said that if proved successful, this could carry four billion barrels of oil and up. Enigma which holds a 50% equity in the offshore Southern Block along with Brazil's Petrobras intends to kick start production in 2015.
With HRT Oil & Gas, a Brazilian company, looking to invest $300 million in oil and gas exploration in Namibia, Katali anticipates offshore Namibia turning into a great producer of oil and gas in a short time. HRT has already certified about 5.2 billion barrels of potential reserves and would drill three to four wells in that area as early as next year, he added.
Furthermore, the Delta Prospect off Namibia's central coast is also a hot bed for recoverable resources of up to two billion barrels of oil, held by Arcadia Expro Namibia and British firm Tower Resources, he said.
"We expect that six to eight wells to be drilled in Namibia's waters in the next 18 months, the highest number in Namibia's exploration history," he said.
Source: OilVoice
See also: The Namibian Oil Rush
Friday, March 11, 2011
Africa: The Last Oil Frontier
Cape Town - Fears that instability will spread further through the oil-supplying Middle Eastern and North African region in North Africa have driven the oil price above 2008 levels. The civil war in Libya has halved oil production in that country. And though the regional uprisings have not spread to Saudi Arabia, the world's most important oil producer, tensions rose when Saudi troops fired rubber bullets on street protestors last week.
These events will further hasten the scramble by both the East and the Western to carve for themselves a reliable supply of oil from Africa - dubbed the last oil frontier.
African oil comprises 13% of global supply, though proven reserves are just 9% of the world's known oil reserves. This is a fraction of the Middle East's 62%. "Africa is punching above her weight," Dr Duncan Clarke, oil researcher, consultant and CEO of Global Pacific and Partners SA, told delegates at the 5th annual Africa Economic Forum this week. "This is a modern scramble for resources in an energy hungry world."
In this scramble, Africa is increasingly important, particularly to the United States and China. They are, respectively, the world's biggest and third biggest (after Japan) importers of oil. The US, for example, wants a quarter of its crude imports to come from Africa within the next six years; already, Algeria, Angola and Nigeria combined supply almost 20%. China sources almost one-third of its imported oil from Africa, mostly from Angola, Sudan and Equatorial Guinea.
But the US and China are not the only ones eyeing Africa's oil. About 500 companies - from the oil majors, and state owned petrochemical firms like Petronas and SA's PetroSA to smaller exploration and drilling firms, are currently invested in Africa's oil industry. New entrants arrive every month. They are not all foreign owned either. According to Clarke, more and more African players are investing in the sector. "African private oil companies now number over 100 and come from 20 countries - a far cry from a decade ago," he says.
In parallel, oil is being discovered in more and more African countries. These include significant finds in Uganda, Ghana and Sierra Leone. Madagascar has discovered 15bn to 20bn barrels of heavy oil. And Niger will become an exporter of oil this year. There are also new discoveries in older oil and gas markets such as Nigeria and Angola. By 2030 there could be 40 African oil producers, from seven in the 1970s.
Though oil has been produced in Africa for 50 years, it is in the past decade that exploration and production has ramped up - as global oil consumption began to rise sharply. In the late 1980s Africa had about 60bn barrels of proven oil reserves. Today, Africa-wide oil reserves stand at about 120bn barrels - more than Russia's reserves.
"Africa stands at the beginning of a vast opportunity," says Clarke. "One that could drag her into a modern economy." Oil, far from being a curse, could actually save Africa, he says.
That is a bold statement in a continent that has failed to convert its oil wealth into meaningful social change for her people. To date no African nation has developed its people, infrastructure and economy on the back of its oil wealth. The converse is true and Nigeria is a prime example. Though that country has generated oil revenues in excess of US$350bn since independence, income has fallen by 1.5% per person per year, for the past 30 years.
Gabon, which produces 300 000 barrels per day and has one of the highest GDP rates per capita in Africa, has 60% of its population living on less than $1 per day.
Tony Hawkins, a professor at the graduate School of Management Zimbabwe, argues that oil is a "corrupting substance". Far from putting the oil wealth to effective public use, as has been done in Scandinavia, Alaska and the Gulf, Africa's oil bounty has seen her people grow poorer and their leaders richer.
An economy based purely on oil exports is not sustainable. "Eventually commodity super cycles must come to an end," he says. "African countries need to diversify their economies and grow their consumer base - the oil industry does not create jobs. "
Clarke is not ignorant of these facts. But governance is improving and democracy is spreading - even if it is haphazardly. The oil and gas landscape is changing fast. More companies enter the continent each year, and investment commitments and numbers of projects executed are rising - these generate secondary industries.
"I think competition will intensify over time as more players compete and the foreign state oil companies add to the overall portfolio."
The opportunities do not end there. Another growth area lies in gas. Clarke says with 500trn cubic feet of gas now proven in Africa, the continent's total hydrocarbon reserves stand at about 250bn barrels of oil equivalent. "The future for gas is very strong, with more reserve growth, discoveries and markets being developed, as well as exports to Europe and within Africa," Clarke says.
This bodes well for Africa's economic development - as long as the oil wealth is used constructively to develop infrastructure and unrelated industries. And if it's used to finance short-term consumption? Then nothing changes.
Source: Moneyweb
Subscribe to:
Posts (Atom)