• Friday, June 21, 2024
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Namibia, Ivory Coast, latest brides getting oil majors’ attention, not Nigeria

Nambia, Ivory Coast, latest brides getting oil majors’ attention, not Nigeria

Nigeria, once the sought-after beautiful bride by many oil investment suitors, is facing stiff competition from Namibia and Ivory Coast, who are emerging as the hottest destinations for oil majors in 2024.

BusinessDay’s findings showed Namibia and Ivory Coast boast recent oil discoveries that have piqued the interest of oil majors, bypassing Nigeria, the traditional heartthrob of the oil industry in Africa.

Reports by upstreamonline, a global intelligence publication showed Shell is in talks to acquire a trio of promising deepwater blocks in Ivory Coast as exploration interest continues to grow in a country that is evolving into what is probably the most sought-after upstream play in Africa.

Ivory Coast was something of an oil exploration and production backwater until Italy’s Eni made its big Baleine oil and gas discovery in September 2021, a find that triggered oil companies to take a fresh look at the nation’s offshore geology.

Italian major Eni announced the discovery of light oil, gas and condensates in the Ivory Coast’s offshore Block CI-205, last month as part of its Murene 1X exploration well.

Estimated to hold potential resources of 1.5 billion barrels of oil equivalent, the Calao discovery is the second-largest made in the Ivory Coast – after the Baleine field in 2021.

Ivory Coast currently produces 30,000 barrels per day (bpd), owing to the Baleine discovery that was fast-tracked into production last August.

Read also: FG expects $20bn oil inflows in coming months, after TotalEnergies snub

Three months later, Eni announced plans to invest $10 billion in the development of the field across three phases between 2023 and 2027. As a result, the field’s production is expected to increase from 30,000 bpd to 200,000 bpd by 2027.

As a modern producer, Ivory Coast is prioritising the use of decarbonisation technologies to reduce the carbon footprint of hydrocarbon exploration and extraction, as well as integrating natural gas within its transition strategy.

Eni has also stated plans to make the Baleine field the first net-zero emissions project in Africa, and its second phase of development is set to enable the production of 200 million cubic feet of natural gas per year by 2027.

Apart from Ivory Coast, Namibia is also emerging as a new frontier for oil exploration, with oil majors Namibia could see an oil boom thanks to several major discoveries that suggest there could be more oil yet to come.

An influx of foreign investment has helped Namibia to begin exploring its oil and gas potential, and it looks like it may be quickly paying off with several new finds in recent months, with some dubbing it the “new Guyana”.

This influx of capital stands in stark contrast to the challenges faced by Nigeria, which has struggled to attract similar enthusiasm for its energy resources.

There’s a “big chunk of oil” in waters off Namibia, said Patrick Pouyanne, chief executive officer of TotalEnergies SE, which alongside several other companies has made significant discoveries in the African country.

Read also: Niger records first oil exports after completion of $5bn pipeline project

In the past two years, TotalEnergies, Shell Plc and Galp Energia SGPS SA have made finds off the southwest coast of Africa that turned sparsely populated Namibia into a hotspot for exploration. While no field has yet been given the green light for development, hopes are high in the country that an economic boom similar to that seen in Guyana could be on the cards.

“Shell has some oil, we have some oil, Galp has some oil,” Pouyanne said in an interview at the French company’s headquarters near Paris, last month. A scenario “like you have today in Guyana is very possible.”

The Latin American nation became the world’s fastest-growing economy after Exxon Mobil Corp. tapped large offshore discoveries there. Last month, the US company formally approved its sixth oil development in Guyana, which will one day make it a bigger crude producer than its neighbour and founding OPEC member Venezuela.

A string of forced departures by global oil and gas players whose entry into Nigeria was highly celebrated is clear evidence that rather than attract badly needed investment, Nigeria’s oil industry is not even placed to play catch-up any longer.

Pouyanne cautioned that it might be more complex to optimize several projects led by various operators in Namibia, rather than the single company Exxon that’s leading development in Guyana.

By the end of next year, TotalEnergies aims to approve its first oil development in Namibia at the Venus discovery, which could involve a floating production, storage and offtake vessel with a capacity of as much as 180,000 bpd, Pouyanne said.

Read also: World’s top oil producers by barrels per day

Experts said this shift in focus by oil majors highlights the growing importance of stability and a transparent regulatory framework for attracting investment in Africa’s oil and gas sector.

While Nigeria boasts vast reserves, its long-standing issues are proving to be a turn-off for some companies.

“Perhaps, the oil majors are going to other countries, which is becoming an emerging frontier. Maybe, it is a lot easier for them to do business there because the above-ground risk is probably a lot easier to deal with in those regions as opposed to Nigeria,” Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies said.

A string of forced departures by global oil and gas players whose entry into Nigeria was highly celebrated is clear evidence that rather than attract badly needed investment, Nigeria’s oil industry is not even placed to play catch-up any longer.

French oil major TotalEnergies is moving to invest $600 million to strengthen exploration and production activities in the Republic of Congo in 2024, snubbing the Nigerian oil and gas sector for the second time in quick succession.

According to the press statement seen by BusinessDay, the investment will be used to finance exploration and maintain production in the country’s deep offshore Moho Nord field.

“The $600 million investment by TotalEnergies shows that the IOC is in the Republic of Congo to stay. Congo’s oil and gas can play a much greater role in alleviating energy poverty and driving industrialisation in Africa, and partnerships with companies to the likes of TotalEnergies will be instrumental in achieving these objectives,” said NJ Ayuk, the executive chairman of the African Energy Chamber.