Lack of Investment could distrupt Nigeria and Angola’s oil production in future
Sub-Saharan African nations are keen to rebound and ramp up investment in the oil and gas sector after a difficult 2020. However, the largest producers in the region – Nigeria and Angola – are forecast to see declining crude oil and condensate production from 2021, and have a relatively small number of projects coming online within the next five years, says GlobalData, a leading data and analytics company.
Conor Ward, Oil and Gas Analyst at GlobalData, comments: “Sub-Saharan Africa has so much potential. It could easily overtake Europe in regional oil and gas production if utilized properly. However, companies have been more cautious than ever over their investments. Some of the huge discoveries made over the past decade have seen significant delays with no final investment decision (FID) in sight: as is the case with Shell’s Bonga Southwest/Aparo, which was discovered over 20 years ago.”
European majors are gravitating towards an increasingly gas-heavy portfolio to reduce their carbon emissions. This is forcing them to reallocate capital away from oil heavy developments to lower carbon projects. The forecast for Sub-Saharan Africa’s total output (boed) is forecast to grow to 2025 as the production of natural gas will begin to outweigh crude oil and condensate. Gas currently makes up 22% of the regions’ production and is forecast to grow to approximately 30% by 2025. However, this forecast hinges upon multiple developments that have not yet received FID.
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