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South Africa: African oil, energy sector fuelling global investor growth

While oil and gas activity in West Africa is nothing new, it is the activity in East Africa which is creating a stir amongst exploration companies and of course, their suppliers, according to DHL Energy Sector president Steve Harley.

Besides Angola and Nigeria being the most notable producers within the sub-Saharan region, more recently, significant gas discoveries in Tanzania and Mozambique, have led to East Africa now receiving its share of attention from global oil companies and potential investors.

“Oil discoveries in Uganda and Kenya have also added to the excitement in the sector as new players look to enter these markets, including some of the largest independent and international oil companies, otherwise known as the super majors, who are now also witnessing the potential in this region,” Harley said.

In addition to the developments in East Africa, he noted that both Namibia and South Africa were also on the radar of investors within the sector.

“South Africa in particular is receiving much attention, mostly because of the potential of shale gas in the Karoo, but also because it has a long and largely unexplored coastline, off which many believe large hydrocarbon fields may exist,” he said. “As a result of the region’s potential, there are several offshore drilling exploration expeditions currently being planned in South Africa by the major oil companies.”

Africa currently supplies approximately 12 percent of the world’s oil and boasts untapped reserves estimated at 8 percent of the world’s proven reserves, according to PwC’s Africa Oil and Gas review of June 2013.

“With the ever-increasing need for energy in Asia and in particular China, many of these countries are positioning themselves strategically in Africa as they seek to tap into new resources to support their growing energy needs,” said Harley.

Despite the significant developments in the renewable energy sector, the world’s dependency on hydrocarbon-fuelled energy resources will continue for many years to come.

According to the BP Energy Outlook 2035 report, global energy consumption is expected to rise by 41 percent from 2012 to 2035, and that 95 percent of that growth in demand is expected to come from the emerging economies.

DHL is also beginning to witness many exploration companies, as well as the oilfield service companies, outsource non-core functions within their own supply chains.

“This is creating opportunities for small and medium enterprises to provide products and services required to support oil and gas operations locally,” said Harley. “The knock-on effect can therefore be game-changing for any single country or region in terms of economic development. The importance of this outsourcing and localisation trend therefore cannot be underestimated.”


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