East African Oil & Gas Market 2014-2024

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For an Executive Summary of this report please contact ediz.ibrahim@visiongain.com (+44 (0)20 7549 9976) or refer to our website https://www.visiongain.com/Report/1310/East-African-Oil-Gas-Market-2014-2024

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East African Oil & Gas Market 2014-2024

  1. 1. East African Oil & Gas Market 2014-2024 Upstream & Midstream Spending in Tanzania, Mozambique, Kenya, Uganda, Ethiopia, South Sudan & Somalia ©notice This material is copyright by visiongain. It is against the law to reproduce any of this material without the prior written agreement of visiongain. You cannot photocopy, fax, download to database or duplicate in any other way any of the material contained in this report. Each purchase and single copy is for personal use only.
  2. 2. Contents 1. Report Overview 1.1 East African Oil & Gas Market Overview 1.2 East African Oil & Gas Market Structure 1.3 Why You Should Read This Report 1.4 How This Report Delivers 1.5 Key Questions Covered by This Analytical Report Include 1.6 Who is This Report For? 1.7 Market Definition 1.8 Methodology 1.9 Frequently Asked Questions (FAQs) 1.10 Associated Visiongain Reports 1.11 About Visiongain 2. Introduction to the East African Oil & Gas Market 2.1 Critical Issues in the East African Oil and Gas Market 2.1.1 Political (In)Stability 2.1.2 Economic and Energy Sector Development 3. The East African Oil & Gas Market 3.1 East African Oil & Gas Market Forecast 2014-2024 3.2 East African Oil & Gas Submarket Forecast 3.2.1 East African Upstream Exploration & Development (E&D) Market Forecast 2014-2024 3.2.2 East African Midstream Market Forecast 2014-2024 4. East African National Oil & Gas Markets 2014-2024 4.1 East African National Oil & Gas Markets Forecast 2014-2024 4.2 East African Oil & Gas Market Barriers to Entry Analysis 2014-2024 4.3 Tanzanian Oil & Gas Market Forecast 2014-2024 4.3.1 Political and Economic Climate in Tanzania 4.3.2 Doing Business in Tanzania www.visiongain.com
  3. 3. Contents 4.3.3 Tanzanian Production, Consumption and Reserves 4.3.4 Oil & Gas Sector Organisation 4.3.5 Tanzania’s Licence Blocks and Current Activity 4.3.5.1 BG Group and Ophir Energy in Blocks 1, 3 and 4 4.3.5.2 Statoil and ExxonMobil in Block 2 4.3.5.3 Plans for an LNG Terminal 4.3.5.4 Other Activity in the Tanzanian Oil & Gas Market 4.3.5.5 New Licence Round Taking Place 2013-2014 4.3.6 Mnazi Bay – Dar es Salaam Gas Pipeline to be Completed by 2015 4.3.7 Tanzanian Oil & Gas Market Summary 4.4 Mozambique Oil & Gas Market Forecast 2014-2024 4.4.1 Political and Economic Climate in Mozambique 4.4.2 Doing Business in Mozambique 4.4.3 Mozambican Production, Consumption and Reserves 4.4.4 Oil & Gas Sector Organisation 4.4.5 Mozambique’s Licence Blocks and Current Activity 4.4.5.1 Great Prospects, But Also Much Uncertainty, as ENI and Anadarko Try to Establish LNG Exports 4.4.5.2 Sasol Begins Commercial Oil Production in Mozambique; Proposes Ambitious Investment Plan 4.4.5.3 Statoil Considering Withdrawal from Mozambique 4.4.5.4 ENRG Buys into Buzi Block 4.4.6 Sasol and Shell Both Announce Plans for GTL Projects 4.4.7 Refinery Projects Highly Unlikely to Come to Fruition 4.4.8 Pipeline Plans in Mozambique 4.4.8 Mozambican Oil & Gas Market Summary 4.5 Ugandan Oil & Gas Market Forecast 2014-2024 4.5.1 Political and Economic Climate in Uganda 4.5.2 Doing Business in Uganda 4.5.3 Ugandan Production, Consumption and Reserves www.visiongain.com
  4. 4. Contents 4.5.4 Oil & Gas Sector Organisation 4.5.5 Uganda’s Licence Blocks and Current Activity 4.5.5.1 Current Activity in Blocks EA1 and EA1A 4.5.5.2 Current Activity in Block EA2 4.5.5.3 Current Activity in the EA3 Production Licence 4.5.5.4 Prospects for a Refinery and Pipeline in Uganda 4.5.5.5 Prospects for Uganda’s Associated and Non-Associated Gas 4.5.6 Ugandan Oil & Gas Market Summary 4.6 Kenyan Oil & Gas Market Forecast 2014-2024 4.6.1 Political and Economic Climate in Kenya 4.6.2 Doing Business in Kenya 4.6.3 Kenyan Production, Consumption and Reserves 4.6.4 Oil & Gas Sector Organisation 4.6.5 Kenya’s Licence Blocks and Current Activity 4.6.5.1 Tullow Continues with Successful Drilling Programme; Development Plan to be Submitted Q4 2015 4.6.5.2 BG Group Makes First Offshore Oil Discovery in East Africa 4.6.5.3 Other Significant Activity in the Kenyan Exploration & Development Market 4.6.6 The Need for Oil & Gas Infrastructure Development 4.6.6.1 Kenya to Construct FSRU 4.6.6.2 Refinery Upgrade Abandoned; New Facility to be Built Instead as Part of Lamu Port Complex 4.6.6.3 Kenya-Uganda-South Sudan Pipeline 4.6.6.4 The Mombasa-Nairobi Replacement Pipeline and the Kenya-Kampala Pipeline 4.6.7 Kenyan Oil & Gas Market Summary 4.7 South Sudanese Oil & Gas Market Forecast 2014-2024 4.7.1 Political and Economic Climate in South Sudan 4.7.2 Doing Business in South Sudan 4.7.3 South Sudanese Production, Consumption and Reserves 4.7.4 Oil & Gas Sector Organisation www.visiongain.com
  5. 5. Contents 4.7.5 South Sudan’s Licence Blocks and Current Activity 4.7.6 The Impact of the Ongoing Civil War in South Sudan 4.7.7 Two Small Refineries to Come into Operation Once the Security Situation Improves 4.7.8 Potential Pipeline to Kenya 4.7.9 South Sudanese Oil & Gas Market Summary 4.8 South Sudanese Oil & Gas Market Forecast 2014-2024 4.8.1 Political and Economic Climate in Ethiopia 4.8.2 Doing Business in Ethiopia 4.8.3 Ethiopian Production, Consumption and Reserves 4.8.4 Oil & Gas Sector Organisation 4.8.5 Ethiopia’s Licence Blocks and Current Activity 4.8.5.1 Tullow and Partners Drill Fourth Well in Ethiopia; Suspend Activities 4.8.5.2 Southwest Energy Undertaking Drilling Campaign 4.8.5.3 New Age Find Oil & Gas in Block 8 4.8.5.4 Pexco Exploration Terminates Contract After Failure to Drill a Well 4.8.6 Ethiopian Oil & Gas Market Summary 4.9 Somali (Including Somaliland and Puntland) Oil & Gas Market Forecast 2014-2024 4.9.1 Political and Economic Climate in Somalia 4.9.2 Al-Shabab and the Somali Security Situation 4.9.3 Somalia’s Licence Blocks and Current Activity 4.9.3.1 Soma Oil & Gas Conducting Seismic Survey 4.9.3.2 Shell and ExxonMobil to Return to Somalia? 4.9.3.3 Somaliland and Puntland’s Hydrocarbons Potential 4.9.3.4 Companies Begin to Enter Somaliland 4.9.3.5 Horn Petroleum’s Activities in Puntland 4.9.4 Somali Oil & Gas Market Summary 5. PEST Analysis of the East African Oil & Gas Market 2014-2024 6. Expert Opinion 6.1 Premier Oil www.visiongain.com
  6. 6. Contents 6.1.1 Premier Oil’s Involvement in the East African Oil & Gas Market 6.1.2 Premier Oil’s Plans in Kenya 6.1.3 Oil Prospects in Kenya and Uganda 6.1.4 Commercial Production and the Need for a Pipeline 6.1.5 Security Concerns in East Africa 6.1.6 Ophir Energy’s Merger Proposal 6.1.7 Opportunities, but Uncertainty in East Africa 7. Leading Companies in the East African Oil & Gas Market 7.1 Afren 7.2 Africa Oil 7.3 Anadarko 7.4 BG Group 7.5 CNOOC 7.6 ENI 7.7 Ophir Energy 7.8 Sasol 7.9 Statoil 7.10 Total 7.11 Tullow Oil 7.12 Other Companies in the East African Oil & Gas Market 8. Conclusions & Recommendations 8.1East Africa Oil & Gas Market Outlook 8.2 Key Findings in the East African Oil & Gas Market 8.3 Recommendations for the East African Oil & Gas Market www.visiongain.com
  7. 7. East African Oil & Gas Market 2014-2024: Upstream & Midstream Spending in Tanzania, Mozambique, Kenya, Uganda, Ethiopia, South Sudan & Somalia Figure 4.27 South Sudanese Licence Blocks Source: USAID 2001 Table 4.30 South Sudanese Licence Blocks (Operator, Block, Exploration/Production, Other Companies, Status) Page 118 4. 7.5 South Sudan’s Licence Blocks and Current Activity Figure 4.27 and Table 4.30 provide information on South Sudan’s current licence blocks. Operator Block Exploration/ www.visiongain.com Production Other Companies Greater Pioneer Operating Company (GPOC) Block 1, 2, 4 Production GPOC is composed of CNPC (40%), Petronas (30%), ONGC/OVL (25%) and Nilepet/NGPC (5%) DAR Petroleum Operating Company Ltd Block 3, 7 Production DAR Petroleum is composed of CNPC , Petronas, Nilepet, Sinopec and Tri-Ocean Energy Sudd Petroleum Operating Company Ltd Block 5a Production Nilepet (50%) Petronas (50%) Star Petroleum Block 5b Exploration Nilepet Total Block B Exploration Nilepet Star Petroleum Block E Exploration Nilepet Source: Visiongain 2014
  8. 8. East African Oil & Gas Market 2014-2024: Upstream & Midstream Spending in Tanzania, Mozambique, Kenya, Uganda, Ethiopia, South Sudan & Somalia 4. 9 The Somali (Including Somaliland and Puntland) Oil & Gas Market Forecast 2014-2024 Table 4.38, Figures 4.30 and 4.31 show visiongain’s forecast for the Somali oil & gas market over the next ten years. Table 4.38 Somali Oil & Gas Market Forecast 2014-2024: Upstream E&D and Midstream Capex ($m, AGR%, CAGR%, Cumulative) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-24 Upstream E&D 5 5 20 25 33 45 55 75 100 105 113 123 698 AGR (%) 0.0 300.0 25.0 30.0 38.5 22.2 36.4 33.3 5.0 7.1 8.9 Midstream 0 0 0 0 0 0 0 0 0 0 0 0 0 AGR (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 5 5 20 25 33 45 55 75 100 105 113 123 698 AGR (%) 0.0 300.0 25.0 30.0 38.5 22.2 36.4 33.3 5.0 7.1 8.9 Page 133 140 120 100 80 60 40 20 www.visiongain.com 2019-24 17.4 37.7 CAGR (%) 2014-19 61.5 CAGR (%) 2014-24 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $m Upstream E&D Midstream Source: Visiongain 2014 Figure 4.30 Somali Oil & Gas Market Forecast 2014-2024: Upstream E&D and Midstream Capex ($m) Source: Visiongain 2014
  9. 9. East African Oil & Gas Market 2014-2024: Upstream & Midstream Spending in Tanzania, Mozambique, Kenya, Uganda, Ethiopia, South Sudan & Somalia 6 . Expert Opinion 6.1 Premier Oil Andrew Lodge is Exploration Director at Premier Oil, a UK-based independent E&P company with operations in the North Sea, Asia, Africa and the Middle East. Visiongain interviewed Mr Lodge in August 2014 and would like to thank him for his valuable insight. 6.1.1 Premier Oil’s Involvement in the East African Oil & Gas Market Visiongain: Can you tell me a little bit about Premier Oil and your role in the East African oil & gas market? Andrew Lodge: Premier Oil is an E&P company; a FTSE 250 company. Our historic exploration successes have occurred in geological provinces called rift basins. East Africa is essentially a rift margin and is thus something that has attracted our attention over a number of years and we have invested in a number of opportunities. At present we are only in one location, which is Block 2B in Kenya. We are hoping to build our position in East Africa, exploration-led. 6.1.2 Premier Oil’s Plans in Kenya Visiongain: It suggests on you website that you have now acquired 2D seismic in Block 2B in Kenya and are planning an exploration well for late 2014 / early 2015. Are you still on course to meet this goal? Andrew Lodge: Our operator [Taipan Resources] has acquired those and done that, and subject to rig availability we are on course. We expect to spud the well sometime between November 2014 and February 2015. Visiongain: Premier withdrew from its share in Blocks L-10A and L-10B, which are operated by BG Group, a few months before the Sunbird-1 well was drilled, discovering an oil column offshore Kenya. Why did you decide to withdraw from these Blocks? Andrew Lodge: We decided that for the cost of the well and the size of the prize, when we put together our own internal metrics for investment, it didn’t cut it. Part of our business model is capital discipline, so if it doesn’t meet our metrics then we don’t do it. Obviously other companies have different metrics. Page 143 www.visiongain.com
  10. 10. East African Oil & Gas Market 2014-2024: Upstream & Midstream Spending in Tanzania, Mozambique, Kenya, Uganda, Ethiopia, South Sudan & Somalia Table 7.1 Afren’s East African Licence Blocks (Country, Operator, Block, Onshore / Offshore, Other Companies, Status) Page 148 Country Operator Block Onshore / Source: Visiongain 2014 www.visiongain.com Offshore km2 Other Companies Status Kenya Afren 1 Onshore 31,781 Taipan Resources Further 2D seismic being acquired in preparation for first well Kenya Afren L-17 Offshore - Seismic work being undertaking in preparation for first well in 2015 Kenya Afren L-18 Offshore - Seismic work being undertaking in preparation for first well in 2015 Tanzania Afren Tanga Offshore 8,000 Petrodel Chungwa-1 and Mkonge-1 wells drilled in 2014 Ethiopia New Age 7, 8 23,162 Afren, Africa Oil Exploration drilling in 2013, result showing oil & gas 7.2 Africa Oil Africa Oil is the operator of two blocks in Ethiopia and one in Kenya, while also having a minority share in a further six blocks across the two countries. The company also has a 44.7% stake in Horn Petroleum, which operates in Puntland. Kenya In Kenya, Africa Oil has a minority share in Tullow’s Blocks 10BA, 10BB, 12 A and 13T (for more information on these see section 7.10 below). In Block 9, which Africa Oil operates, the company recently drilled the Sala-1 well to a depth of 3,030 metres, with gas being found. The drilling of the well fulfilled the requirements of the PSC, which expires in December 2015. Ethiopia In March 2014 Africa Oil farmed down its share in two Ethiopian blocks, with Marathon Oil acquiring a 50% stake in the Rift Basin Area, while New Age acquired an additional 40% working

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