Africa could emerge as a powerhouse in natural gas production as attention on the continent known for oil production takes aim at natural gas to help fulfill demands worldwide and stimulate local economies.
If various regions of Africa are able to overcome obstacles, which vary depending on the region, the rewards could be great, considering the abundance of untapped resources. Making up about 7.5% of the world’s gas reserves, Africa has proved reserves of approximately 494 Tcf, with technically recoverable natural gas reserves estimated at nearly 2,612 Tcf, according to figures in Ernst & Young’s “Natural gas in Africa: The frontiers of the Golden Age” report.
“Natural gas development holds tremendous opportunity for Africa, and it can be a strong prime mover for broader economic and social development,” the report said. “But those opportunities come with risks and challenges – some that are beyond the control of local/regional industry and government. Others, while daunting, can be managed, but will need resolute and dedicated attention. Most importantly though, the opportunities for Africa presented by the Golden Age of Gas are enormous and the challenges and risks can be addressed and mitigated, if not fully overcome.”
Currently, gas production in Algeria, Egypt, and Nigeria are taking the lead, making up 88% of the 7.2 Tcf produced in 2011, according to the report. But drilling activity continent-wide continues to increase not only onshore, where companies primarily focus on oil and also for gas, but offshore as well, which reportedly witnessed resurgence in 2010.
Now, the West African countries of Nigeria and Angola are joining North Africa’s Egypt and Nigeria for heightened drilling activity while work offshore East Africa’s Mozambique and Tanzania steps up.
And the finds – by large and small independents alike – are turning heads.
In October, Tullow Oil’s Twiga South-1 exploration onshore Kenya struck oil. The well is part of a multi-well drilling campaign in Kenya and Ethiopia. Kuwait Energy made a new oil discovery at the Ahmad-2 well in the Gulf of Suez, Egypt. In another announcement, oil and gas deposits were reportedly discovered in the Bida basin in Nigeria’s Niger State.
The report noted large discoveries offshore Mozambique and Tanzania. However, it predicted that in the future, African gas exploration is anticipated to shift to the east. Unconventional gas resources in North Africa and South Africa could add to the new supplies.
East Africa: Dubbed “the new promised