The following sets out some of the key findings of the recent PWC Fuel for Thought, Africa Oil and Gas Review 2019.
- The oil price crash in 2014 – 2016 lead to a decrease in expenditure which began to improve in 2017. However in Africa capital expenditure in the industry continued to decline into 2018.
- Africa experienced a massive drop in exploration spend of 86% between 2014 and 2018 compared to 63% in the rest of the world
- From 2020 capital expenditure is expected to increase at an annual compound growth rate of 5% to 2030. A slow and then robust recover with an average 17% year on year growth rate is projected over the next decade.
- West Africa had the only Africa discovery to make it into the 2017 /18 top 10 list for new discoveries. In part due to less exploration in Africa as a result of reduced expenditure. The last huge discoveries of oil in Africa were made in 2014 and peaked in 2015.
- Africa gas 125.3 billion barrels of oil which amounts to 7.2% of the worlds proven reserves.
- Oil exports from Africa increased to 7.1 million barrels which is 9.9% of global exports.
- Refinery upgrades, or new builds are being considered in 14 countries including Kenya.
- Similar to the mining industry oil and gas has offered little to no equity returns to shareholders over the last decade.
- Oil prices saw an increase through 2018 to a four and a half year high in October, before dropping by 42% to an 18 month low.
- Overall fundamentals suggest that the market will remain in a position of oversupply with more production coming on-stream while prospects for demand growth are weakening.
- Globally the natural gas market will continue to see growth and will likely overtake coal by 2030 to become the world’s second leading fuel.
The report finishes on a high note for people and organisations working in the oil and gas industry in Kenya and East Africa. Overall conclusions of the report suggest that the oil and gas sector is moving from a cycle of stagnation in exploration, capital and expenditure spend and production to a more exciting growth phase. Click here to find out more and download the full report.
Other reports which may be of interest include PWC’s Oil and Gas Trends 2019. In compiling this report PWC conducted 3,200 interviews with CEOs in more than 90 territories. There were 99 respondents from the oil and gas sector. Some of the main topics highlighted for the oil and gas industry going forward included:
- Realigning portfolios to focus on strengths and new growth areas
- Investing in agility through digital innovation
- Cultivating and hiring the right talent
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