Industry Consultant: There's Still Oil to Find in East Africa

Industry Consultant: There's Still Oil to Find in East Africa
There is still oil to discover in East Africa, suggests PetroMall consultant Mike Rego.

There are still undiscovered commercial oil plays in East Africa, Mike Rego, an independent consultant at PetroMall Ltd., suggested at the recent Finding East & Southern African Oil & Gas conference in London.

“We’ve had a lot of success in East Africa in recent years but it’s all been gas. When it comes to looking for oil in coastal east Africa it’s been a failure,” Rego told oil and gas industry delegates in a presentation.

“The oil is out there, we just have to improve how we look for it,” he added.

This could be harder than it seems, however, Rowan Edwards, project geologist at CGG, pointed out.

“In Africa, the mapping is slightly mixed in places,” Edwards said.

“Some of the maps are quite good, some less good. There’s a bit of a lack of consistency depending on who did each map and when it was done,” he added.

Supporting Rego’s claims at the conference, Nick Tranter, project developer for Africa, the Mediterranean and the Middle East at TGS-Nopec, highlighted the oil generation potential of Madagascar.

The island nation of Madagascar has seen eight wells drilled in its waters, which yielded one gas discovery at the Eponge-1 well, situated in the southern part of the Morandava Basin.

Although the find at Eponge-1 proved to be non-commercial, Tranter emphasized the possibility of oil production to the north of the well.

“It’s key to point out that … at the Eponge-1 well location there was a very thick sediment overburden of source rock, but as you move further north … the sediment burden decreases quite drastically, hence you’ve got potential for oil to be generated rather than gas,” Tranter said.

In addition to fanning suggestions made by Rego, the TGS representative revealed that Madagascar is scheduled to hold an offshore licensing round towards the back end of 2017. In October of last year, the planned tender of 40 offshore blocks was delayed to an unspecified time in 2017.

“In late 2016, the Madagascan government put together their petroleum act and it’s now going through parliament requesting to be signed off … so it can be enacted, and then they can push through this anticipated licensing round,” Tranter said.

Further supporting Rego’s views on East African oil plays, Solo Oil Chairman, Neil Ritson, commented on the potential of an onshore asset in Tanzania.

“Black oil was seen on the cuttings [at the NT-2 well in Tanzania] – now what we will make of that in the next few months to years, I don’t know,” Ritson said.

The Solo Oil Chairman said that the company would continue to consider the existence of an elusive oil play in the region and offered suggestions as to its possible characteristics.

“In my mind, it’s certainly not deep offshore, it’s a near shore and onshore play and we seem to be getting indications, both at Kiliwani North and Ntorya [Solo Oil interests located in Tanzania], that it is a real possibility that there is yet a play in there,” Ritson said.

Addressing the Skills Gap

In an effort to address the skills gap in the East African oil and gas industry, the UK government, with support from Germany, has designed the Skills for Oil and Gas Africa (SOGA) program.

The program, which focuses on Kenya, Uganda, Tanzania and Mozambique, is working closely with the private sector and government to equip local populations with the skills needed to seize job opportunities within the sector. The project is expected to help around 32,000 local people find sustainable jobs.

SOGA is currently scheduled to be completed by April 1, 2022, according to DFID’s online project development tracker, which marks an extension from the original completion year of 2020.

The UK government stated in November of last year that it is well placed to help the East African oil and gas industry, which it described as holding huge opportunities.

“East Africa has now secured its position as a big player for hydrocarbon exploration on the world stage,” British High Commissioner, Nic Hailey, said at the 4th East Africa oil and gas summit last year.

“Over 50 years of experience in North Sea oil and gas has given the UK a global competence in all aspects of exploration and production … and there is a wealth of UK companies leading the way in designing, financing and implementing oil and gas construction projects across the world,” Hailey added.

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist.

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