Following the scary condition of exploration sector and global competition increase to attract capital and technology into exploration, the African Energy Chamber has held its first meeting with the newly-appointed Exploration Committee
The committee concluded that Africa needs to do a better job at attracting investment. The committee acknowledged that while other global frontiers continue to perform better in offering attractive PSC terms and jurisdictions for explorers and investors, especially in South America, several African markets remain seen as risky and promoting legislations that deter investments.
PSC terms and local content regulations need to adapt to new realities. While upcoming or frontier markets such as Senegal, Niger, Chad, Kenya or Uganda need to adopt progressive local content regulations taking into account the emerging status of their local industry, other established markets like Nigeria should adjust their PSC terms to new market realities.
Additionally, the promotion of African acreages and blocks need to be accompanied by better quality data and information. African governments need to put adequate efforts and money that would ensure the gathering of high quality data to support licensing rounds across the continent. While Africa’s risk profile deteriorates, the continued lack of access to reliable and quality data further complicates investment promotion efforts.
However, the outlook remains positive with extremely promising wells planned for drilling in major frontiers such as South Africa, Namibia or Angola. The committee stated that with its extremely abundant natural resources, Africa can quickly reposition itself as an attractive and competitive destination for exploration investment if it is willing to implement quick policy gains that would ensure a sustainable and quick recovery of its oil and gas industry.
The committee members include Folarin Lajumoke, vice-president – Africa, ION; Mark Romanchock, principal geologist, Samara Geosciences, LLC; H Daniel Hogan, general manager – Lukoil International Upstream West; Robert Erlich, partner and executive director – upstream, Cayo Energy LP; Peter Ntephe, president and CEO, ERHC Energy.
