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Insight & Analysis - March 2, 2022

5 African Countries Emerging in the Hydrocarbon Markets in 2022

Algeria, Egypt, and Nigeria are the top three natural gas producers, accounting for 80% of Africa’s natural gas flow expected in 2022.

Despite the worldwide transition to renewables, African countries have maintained their position as the world’s final frontier for hydrocarbon exploration, with developing markets rising to the top of investors’ priorities in 2022.

According to the African Energy Chamber’s (AEC) first-quarter 2022 Outlook, Algeria, Egypt, and Nigeria will remain the top three natural gas producers, accounting for 80% of the natural gas flows expected across Africa in 2022. Also, the reduction in the number of fields that supply feedgas for liquefied natural gas exports and a decrease in annual capital expenditure will stifle growth in the African gas sector.

Some countries in Africa, such as Angola, Nigeria, and Libya, have established themselves as one of the world’s most competitive and lucrative hydrocarbon markets. Here are African countries emerging in the hydrocarbon markets.

Uganda

Uganda is fast becoming a competitive East African hydrocarbon market. The country has roughly 6.5 billion barrels of crude oil reserves and 0.5 trillion cubic feet of natural gas reserves. With this, the government is prepared to attract domestic and international players to promote growth.

As a result of the country’s strategic geographical placement near other high-deposit markets like South Sudan and Tanzania, it is speeding up project development to guarantee that energy sector operations bring concrete economic benefits to the populace.

The Lake Albert Project, which is projected to supply about 230,000 barrels per day, and the East Africa Oil Pipeline Project have already attracted substantial investment, with fresh and exciting prospects likely to come in 2022 and beyond.

Somalia

Somalia has developed as an appealing upstream market because of its closeness to the Gulf of Arab nations, which is rich in oil and has comparable geological qualities to Kenya, Tanzania, and Mozambique.

However, the country’s offshore basins remain unexplored, despite these potentials. As a result, the government has redoubled its efforts to expand exploration.

Somalia launched its first-ever licensing cycle in August 2020, based on encouraging results from seismic data that spanned an offshore region of more than 120,000km.

From the significant fiscal incentives and substantial revenue-sharing agreements, the government has positioned itself as an attractive and competitive hydrocarbon development location.

Kenya

To establish a competitive hydrocarbon market, Kenya has gone through the rapid development of its oil and gas exploration and production. Tullow Oil Plc’s commercial findings in 2012 sparked an inflow of foreign players, with independent explorers seeking to unlock the hidden potential of Kenyan basins.

In only the Lokichar sub-basin, the country has about 4 billion oil reserves, and 750 million are marketable. With four sedimentary basins in all, there is numerous potential for additional exploration.

International companies like Chevron, BP, Shell, and Texas Pacific, among others, are trying to emulate Tullow’s success. As a result, the nation is swiftly establishing itself as a hydrocarbon market, with future exploration achievements projected to be a leading producer.

Côte d’Ivoire

The uncovering of about 2 billion barrels of oil and 51 million cubic meters of natural gas from the depth of 2,000 meters and 60 kilometres off the coast by the Italian oil firm Eni in 2021 has attracted worldwide interest in Côte d’Ivoire and Africa’s oil and gas sectors.

With this, Côte d’Ivoire is positioning itself on the path of becoming a feasible hydrocarbon market.

Namibia

Due to the successful drilling expedition in the 6.3 million-acre Kavango Basin in 2021 by a Canadian exploration firm, Reconnaissance Energy Africa, Namibia has been getting international attraction.

It is said that the basin tends to house billions of barrels of oil after revealing a functional petroleum infrastructure.

As a result, the nation has established itself at the forefront of the African exploration game. The government is also committed to attracting investment and advancing exploration in essential basins.

Drilling efforts will likely resume in 2022 as Namibia is keen to exploit prospective reserves and boost its competitiveness as an African hydrocarbon producer.

READ ALSO: Top 6 African Countries with the most Natural Gas Reserves

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