The African Energy Chamber has referred to Africa as the hottest frontier globally in terms of oil exploration based on several discoveries made over the few years.
The world’s largest discovery this year was made of the Mauritanian coast by KOSMOS Energy to add up to other discoveries made by Equatorial Guinea’s Noble Energy and Springfield Group of Ghana in West Africa.
The Chamber revealed that in 2020, hundreds of blocks and acreages will be up for grab across the continent from Senegal to Nigeria to Somalia.
These were contained in the organisation’s latest African Energy Outlook 2020, which also called for sustained fiscal reforms to attract capital and technology into exploration in the continent.
In 2020, the competition will be fierce to attract capital from a diversifying basket of explorers now coming from North America, Europe, Russia, China, India, South East Asia and the Middle East.
The outlook mentioned that several African countries revised their legal and fiscal framework in 2019, to incentivise exploration, as new world-class discoveries were yet again made on the continent.
With the signing of no less than 9 PSCs in 2019 following the passing of its brand new Hydrocarbons Code, the outlook added that Gabon in Central Africa, has shown that investors are ready to keep betting on Africa, provided that the right legislation and framework are put in place.
However, the Chamber stressed on concerns raised by investors over uncertain fiscal terms in sub-Saharan Africa.
To this end, it called on governments to find better ways to reconcile their expectations of short-term tax gains with the need for sustainable and long-term investment in exploration.
The importance of increasing exploration efforts cannot be under-estimated in Africa, the outlook stressed.
According to NJ Ayuk, the African Energy Chamber Chairman, who doubles as CEO for Centurion Law Group, “2020 needs to be a drilling year and that Africa has the highest exploration success rates in the world.
“In basins like the MSGBC, international explorers like Kosmos Energy have even had a 100 percent success rate from all their exploratory drilling,” he added.
“It is up to African governments and legislators to provide the right framework to keep attracting these kind of players ready to take risks and bet on our continent’s potential.”
Promoting and supporting exploration efforts across the continent is a key goal of the Chamber in 2020, as stated in its latest outlook for the sector.