East Africa’s Holds Oil And Gas Potential
Three major oil and gas exploration projects in East Africa make the region attractive for players in the breakbulk industry, said Nivan Moodley, director of MAC Consulting, who provided an oil and gas outlook at Breakbulk Africa in Johannesburg Thursday.
Declining prices have raised concerns about future projects on a continent that is heavily reliant on its oil exports to fuel growth. However, Moodley is optimistic that the sector will be able to adapt to new global market conditions. While unable to specifically name the new projects in East Africa, Moodley explained that the need for infrastructure is good news for supply chain companies.
Africa remains an attractive investment for multinational oil and field service companies. Apart from the fact that the continent has strong oil reserves, factors such as strong economic growth, political stability, reduction of government debt and foreign direct investment have boosted business confidence in Africa. Furthermore, investments made in infrastructure during the 2000’s have set the foundation for economic growth that is expected to continue into the future.
Despite progress in developing renewable energy, Moodley stated that oil and gas will continue to constitute the majority of global energy supply over the next 25 years. Shale gas exploration and LNG reserves on the continent also provide more growth potential for the sector. However, there are challenges that Moodley believes can be overcome by a new approach from government and the private sector. There is a strong need for fiscal revisions by African governments. Further, operators need to optimize costs and efficiencies.
The buoyant mood is good news for the breakbulk industry, as infrastructure such as pipelines and on- and off-shore facilities will be required to maximize Africa’s oil and gas output potential.
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