Southern Africa Oil & Gas Market 2015-2025

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Southern Africa Oil & Gas Market
2015-2025
Upstream Exploration & Development and Midstream Infrastructure Spending in
Angola, Namibia, South Africa, Mozambique, Tanzania & Madagascar

Contents
1. Report Overview
1.1 Southern Africa Oil & Gas Market Overview
1.2 Southern Africa Oil & Gas Market Structure
1.3 Why You Should Read This Report
1.4 How This Report Delivers
1.5 Key Questions Answered by This Analytical Report Include:
1.6 Who is This Report For?
1.7 Market Definition
1.8 Methodology
1.9 Frequently Asked Questions (FAQ)
1.10 Associated Visiongain Reports
1.11 About Visiongain
2. Introduction to Southern Africa’s Oil & Gas Market
2.1 Main Areas of Interest in Southern Africa’s Oil and Gas Market
2.1.1 Economic and Energy Sector Development
2.1.2 Pre-salt Exploration
2.2 Visiongain’s Description and Analysis of the Oil Price Collapse
2.2.1 Supply-Side Factors
2.2.2 Demand-Side Factors
2.2.3 Other Major Variables that Impact the Oil Price
2.2.4 Visiongain’s Oil Price Assumptions and Forecast
3. The Southern African Oil & Gas Market
3.1 Southern African Oil & Gas Market Forecast 2015-2025
3.2 Southern African Oil & Gas National Market Breakdown and Shares 2015-2025
3.3 Southern African Oil & Gas Submarket Forecasts
3.3.1 Southern African Upstream Exploration and Development (E&D) Market Forecast
2015-2025
3.3.2 Southern African Midstream Market Forecast 2015-2025
4. The Angolan Oil & Gas Market
4.1 The Angolan Oil & Gas Market Forecast 2015-2025
4.2 Economy and Energy Sector Development
4.2.1 State Owned Enterprise (SOE)
4.3 Political Risk Assessment
4.3.1 Strengths
4.3.2 Weaknesses

Contents
4.3.3 Opportunities
4.3.4 Threats
4.3.5 Verdict
4.4 Angolan Production, Consumption and Reserves
4.5 Oil & Gas Sector Organisation
4.6 Angola’s Licence Blocks and Current Activity
4.6.1 Chevron
4.6.2 Sonangol
4.6.3 Total
4.6.4 BP
4.6.5 Somoil
4.6.6 Petrobras
4.6.7 Maersk
4.6.8 Statoil
4.6.9 Cobalt International Energy
4.6.10 Puma Energy
4.6.11 VAALCO
4.6.12 Pluspetrol Angola
4.6.13 ENI
4.6.14 ESSO
4.6.15 Repsol
4.6.16 Conoco Phillips
4.7 Angolan Oil & Gas Market Summary
5. The Namibian Oil & Gas Market
5.1 The Namibian Oil & Gas Market Forecast 2015-2025
5.2.1 Vision 2030
5.2.2 Equitable Economic Empowerment Framework
5.3.1 Strengths
5.3.2 Weaknesses
5.3.3 Opportunities
5.3.4 Threats
5.3.5 Verdict
5.5 Namibia’s Licence Blocks and Current Activity
5.5.1 Gazania
5.5.2 Impact Oil and Gas

Contents
5.5.3 Petro Viking
5.5.4 Repsol
5.5.5 Chariot Oil and Gas
5.5.6 PetroRio
5.5.7 Oranto Petroleum Ltd
5.5.8 Eco Oil & Gas Ltd
5.5.9 Jupiter
5.5.10 Westbridge
5.5.11 Tullow
5.5.12 Nabirm
5.5.13 Pan African Oil
5.5.14 Maurel et Prom
5.5.15 Sungu Sungu Petroleum
5.5.16 UNIMAG
5.5.17 Serica Energy
5.5.18 Lekoil
5.5.19 Murphy Oil Corporation
5.5.20 Shell
5.5.21Bulk Storage Facility
5.6 Namibian Oil & Gas Market Summary
6. The South African Oil & Gas Market
6.1 The South African Oil & Gas Market Forecast 2015-2025
6.3.1 Strengths
6.3.2 Weaknesses
6.3.3 Opportunities
6.3.4 Threats
6.3.5 Verdict
6.4 South African Production, Consumption and Reserves
6.6 South Africa’s Licence Blocks and Current Activity
6.6.1 Cairn India
6.6.2 Sunbird Energy
6.6.3 Thombo Petroleum
6.6.4 Anadarko
6.6.5 Sasol
6.6.6 BHP Billiton Petroleum

Contents
6.6.7 OK Energy
6.6.8 Rhino
6.6.9 Shell
6.6.10 ExxonMobil
6.6.11 Total
6.6.12 Shale Gas Potential
6.7 South African Oil & Gas Market Summary
7. The Madagascan Oil & Gas Market
7.1 The Madagascan Oil & Gas Market Forecast 2015-2025
7.3 Madagascar: Political risk summary
7.3.1 Strengths
7.3.2 Weaknesses
7.3.3 Opportunities
7.3.4 Threats
7.3.5 Verdict
7.4 Madagascan Production, Consumption and Reserves
7.6 Madagascar’s Licence Blocks and Current Activity
7.6.1 ExxonMobil
7.6.2 Sterling Energy
7.6.3 EAX
7.6.4 Yanchang Petroleum International Ltd
7.6.5 Total
7.6.6 Madagascar Oil
7.6.7 Essar Energy
7.6.8 Crown Energy
7.6.9 Tullow Oil
7.6.10 Madagascar Southern Petroleum Company
7.6.11 OMV
7.6.12 South Atlantic Petroleum (SAPETRO)
7.7 Madagascan Oil & Gas Market Summary
8. The Mozambican Oil & Gas Market
8.1 The Mozambican Oil & Gas Market Forecast 2015-2025
8.2.1 Infrastructure
8.2.2 Labour Force

Contents
8.2.3 Bi-lateral Trade Partnerships
8.2.4 Unqualified Government and Public Sector
8.2.5 Demographics
8.2.6 New Petroleum Law 2014
8.3.1 Strengths
8.3.2Weaknesses
8.3.3 Opportunities
8.3.4 Threats
8.3.5 Verdict
8.4 Mozambican Production, Consumption and Reserves
8.6 Mozambique’s Licence Blocks and Current Activity
8.6.1 ENI and Anadarko Try to Establish LNG Exports
8.6.2 Sasol
8.6.3 Statoil Withdraws from Mozambique
8.6.4 ENRG Buys into the Buzi Block
8.6.5 Refinery Projects Unlikely to Come to Fruition
8.6.6 Pipeline Plans in Mozambique
8.6.7 Sasol and Shell Both Announce Plans for GTL Projects
8.7 Mozambican Oil & Gas Market Summary
9. The Tanzanian Oil & Gas Market
9.1 Tanzanian Oil & Gas Market Forecast 2015-2025
9.2.1 Infrastructure
9.2.2 Energy Supply
9.2.3 Labour Force
9.2.4 Changes to Legislation
9.3.1 Strengths
9.3.2 Weaknesses
9.3.3 Opportunities
9.3.4 Threats
9.3.5 Verdict
9.4 Tanzanian Production, Consumption and Reserves
9.6 Tanzania’s Licence Blocks and Current Activity
9.6.1 BG Group and Ophir Energy

Contents
9.6.2 Statoil and ExxonMobil
9.6.3 Shell’s Acquisition of BG Group in 2015
9.6.4 Plans for a LNG Terminal
9.6.5 Mnazi Bay – Dar es Salaam Gas Pipeline Completed in 2015
9.7 Tanzanian Oil & Gas Market Summary
10. Rest of Southern Africa Oil & Gas Market
10.1 Rest of Southern Africa Oil & Gas Market Forecast 2015-2025
10.2 Botswana
10.2.1 SacOil (Transfer Holdings)
10.2.2 Magnum Gas & Power
10.2.3 Pelkbuck (Pty) Ltd
10.2.4 Equatorial Oil & Gas
10.2.5 Meliot
10.2.6 Tlou Energy
10.3 Zimbabwe
10.3.1 Chinese companies hiding potential discoveries 28/02/14
10.3.2 Competition for capital
10.3.3 Weak Economic Outlook
10.4 Zambia
10.4.1 ZCCM Investment Holdings
10.4.2 Frontier Resources
10.4.3 Bowleven Oil and Gas
10.4.4 Tower Resources/Rift Petroleum
10.4.5 Swala Energy
10.5 Swaziland
10.6 Lesotho
11. PEST Analysis of Southern Africa’s Oil & Gas Market
11.1 Political
11.2 Economic
11.3 Social
11.4 Technological
12. Expert Opinion
12.1 Heritage Oil
12.1.1 Heritage Oil’s Involvement in the Southern Africa’s Oil & Gas Market
12.1.2 Heritage Oil’s Plans in Rukwa Basin
12.1.3 Heritage Oil’s Plans in the Kyela Concession

Contents
12.1.4 Commercial Export Infrastructure
12.1.5 Security Concerns in Southern Africa
12.1.6 Opportunities, but Uncertainty in Southern Africa
12.2 Swala Energy
12.2.1 Swala Energy’s Involvement in the Southern African Oil & Gas Market
12.2.3 Opportunities, but Uncertainty in Southern Africa
13. Leading Companies in the Southern African Oil & Gas Market
13.1 Total
13.2 Shell
13.3 ENI
13.4 BP
13.5 Tullow Oil
13.6 Other Companies in the East African Oil & Gas Market
14. Conclusions and Recommendations
14.1 Southern Africa Oil & Gas Market Outlook
14.2 Key Findings in the Southern African Oil & Gas Market
14.3 Recommendations for the Southern African Oil & Gas Market

www.visiongain.com Page 98
The Southern African Oil & Gas Market 2015-2025: Upstream
Exploration & Development and Midstream Infrastructure Spending
in Angola, Namibia, South Africa, Mozambique, Tanzania &
Madagascar
5. The Namibian Oil & Gas Market
5.1 The Namibian Oil & Gas Market Forecast 2015-2025
Table 5.1 and Figures 5.1, 5.2, 5.3 and 5.4, show visiongain’s forecast for the Namibian oil & gas
market over the next ten years.
CAPEX ($m) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Upstream 66 100 217 441 420 463 500 512 530 480 392 360
Midstream 0 0 900 900 900 300 0 200 500 500 500 300
Total 66 100 1,117 1,341 1,320 763 500 712 1,030 980 892 660
AGR (%) 50.8 1022.6 20.1 -1.6 -42.2 -34.5 42.4 44.7 -4.9 -9.0 -26.0
2020-2025 5.7
20.8
CAGR (%) 2015-2020 38.1
CAGR (%) 2015-2025
The Namibian oil and gas market will see capex of $100m in 2015. The Namibian market grows
quickly from 2016 onwards, as multiple midstream projects come online. This process is then likely
to be repeated in the latter half of the forecast as a second wave of projects comes online.
0
200
400
600
800
1,000
1,200
1,400
1,600
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
CAPEX($m)
Upstream E&D Midstream
Source: Visiongain 2014
Table 5.1 Namibian Oil & Gas Market Forecast 2015-2025: Upstream E&D and
Midstream Capex ($m, AGR%, CAGR%, Cumulative)
Figure 5.1 Namibian Oil & Gas Market Forecast 2015-2025: Upstream E&D and
Midstream Capex ($m)

Madagascar
South Africa has the second largest
economy in Africa after Nigeria, and
consistently performs amongst the best in
all economic and social development
indicators. This is as a result of the
relatively stable democracy that has
lasted since the election of the African
National Congress (ANC) in 1994, and is
currently led by Jacob Zuma. What’s
more, South Africa’s economy is far more
diverse than the other countries in the region, making it less susceptible to exogenous impacts
such as the oil price shock.
Population (Million, 2014) 53.675
Population Growth (%, 2014) 1.33
GDP ppp ($bn, 2014) 704.5
GDP per Capita ($, 2014) 13,000
GDP Growth (%, 2014) 1.5
Inflation (%, 2014) 6.1
Labour Force (Million, 2013) 20.23
Unemployment Rate (%) 25.1
South Africa’s more recent indicators show that economic conditions are improving within the
country after the economy was heavily impacted by the 2008 recession. The economy grew by
1.5% in 2014 and inflation, dropping to 6.1%, is close to returning back within South Africa’s 3% to
6% target band. Nevertheless, South Africa is still suffering a longer time decline in its trend
growth, with the South African Reserve Bank stating that trend growth is probably at 2.5% for the
coming years, down from 4% pre-2008. Being more exposed to Western export markets has
meant that South Africa has been slower to recover than some its less developed neighbours.
Source: CIA World Factbook
Table 6.4 South African Economic Indicators

Madagascar
7.6 Madagascar’s Licence Blocks and Current Activity
Operator Block
Other
Companies Status
Sterling
Energy
(50%)
1002 -
Ambilobe
Pura Vida
Mauritius
(50%)
Pura Vida has agreed to pay all costs associated
with a 1,250km2 seismic surveys that was
completed in 2015 Q2. This was anticipated to
cost a maximum of $15m.
Relinquished Ampasindava
The PSC was set to expire in July 2016, with a
minimum work commitment of one exploration
well. However, on 18
th
May 2015, ExxonMobil
(70%) and Sterling (30%) relinquished the block,
citing further exploration to be too risky in the
current low oil price environment.
ExxonMobil
(100%)
Cap Saint
Andre
In 2008, ExxonMobil oversaw the acquisition of
2800km of 2D seismic. The exploration activities
in this block are still at an early stage, consisting
mainly of data compilation and G&G.
EAX (90%)
1101 -
Antsiranana
Oyster Oil
and Gas
(10%)
EAX (East African Exploration) started a shallow
drilling campaign on 25/08/14. This will includes
the drilling and coring of 12 shallow wells for 2014
and 2015. 5 wells were completed in 2014, with 7
left to be drilled throughout 2015.
Madagascar
Northern
Petroleum
Company
2101 -
Antsohihy
MNPC has not released any update on Block
activity since its acquisition.
Yanchang
Petroleum
(100%)
2104 -
Bekodoka YAPEC
Five wells have been drilled in Block 2104 in the
past, with three out of these five wells yielding
positive results. In 2014, Yanchang acquired
197.4km of 2D seismic data which identified nine
separate oil reservoirs of varying size. These
positive results have encouraged Yanchang to
continue with their exploration programme, in
order to identify the best possible targets for
drilling.
Da Qing
Group (51%)
3101 -
Tambohorano No information is available for this block.
Total (60%)
3102 -
Bemolanga
Madagascar
Oil (40%)
This block contains the Bemolanga Field Bitumen
discovery and has over 560 wells drilled to date.
75% of the bitumen is recoverable using hot
water extraction process, but the JV is unsure of
the commercial viability of producing the heavy
oil. A two year extension has been granted to the
end of 2016 to ascertain whether or not higher
quality oil exists deeper underground.
Essar
Energy
(100%)
3103 -
Melaky Early stages of exploration.
Table 7.10 Madagascan Licence Blocks (Operator, Block, Exploration/Production,
Other Companies, Status)

Madagascar
12.2 Swala Energy
Dr. David Mestres Ridge is CEO and managing director of
Swala Energy Limited, an Australian independent oil and gas
exploration company actively exploring the East African Rift
System. Dr. Mestres Ridge has significant academic and
professional experience in the oil and gas industry. Working
first for Total Oil Marine (1998-2000) he then became an
independent M&A and business development advisor to oil
companies active in the North Sea and North Africa (2000-
2006). From 2006-2008 he was a Vice-President at the
Royal Bank of Canada, first in the Global Investment
Banking Oil and Gas team and then in the Equity Research team. In 2008-2009 Dr. Mestres Ridge
briefly managed Petrodel Resources, a company active in Tanzania. In 2009-2010 he worked with
Black Marlin Energy during its IPO on the Toronto Stock Exchange. Dr. Mestres Ridge has a BSc
in Applied Geology, an MSc in Mining Geology, a PhD in Chemical Engineering and an LLM in
Law.
12.2.1 Swala Energy’s Involvement in the Southern African Oil & Gas
Market
Visiongain: Can you tell me a little bit about Swala Energy’s role in the Southern African oil & gas
market?
Dr. Mestres Ridge: Swala Energy currently holds substantial equity in assets in Tanzania and
Zambia and has an active business development program in Sub-Saharan Africa.
Visiongain: What are your plans for the three assets currently under your management in
Southern Africa - The Kilosa-Kilombero and Pangani licenses in Tanzania?
Dr. Mestres Ridge: Our plans for these assets are to complete the processing and interpretation
of the data by the end of July 2015; to identify drilling targets; and to prepare for a three-well
campaign in 2016.
Visiongain: What are your thoughts on the future for the Southern African Oil and Gas business,
with regards to security threats?

Madagascar
Operator Country Block
Other
Companies Status
Chevron
(39.2%) Angola Block-0
Sonangol (41%),
Total (10%), ENI
(9.8%)
Major producing block.
Seeing 3 major
projects since 2014
and over next few
years to maintain high
levels of production
from declining wells.
Wells, platforms,
SURF and pipeline.
Mafumeira Sul cost
$5.6bn, Nemba
Project cost $2bn
Total (50%) Angola Block 3/91
Sonangol
(6.25%), ENI
(15%), Ajoco
(12.5%),
Svenska
(6.25%), INA-
Nafta (5%),
Naftagas (5%)
First started producing
oil in 1985, peaking in
1998. The single field
in the concession is
now in decline, and
sees very little activity.
Total (40%) Angola Block 17
Esso (20%), BP
(16.67%), Statoil
(23.33%)
May 2015 - total of
2bn barrels of oil had
been produced. CLOV
project began
producing in June
2014 - 34 subsea
wells and FPSO
vessel. July 2015 -
Dalia Phase 1A began
producing 30,000bpd,
via the Dalia FPSO
which produced
200,000bpd. Four
FPSOs operate in this
block.
Chevron (31%) Angola Block 14
ENI (20%),
Angola Block 14
(Total 10.1%,
Inpex 9.9%),
Sonangol (20%),
Galp Energia
(9%)
Oil producing field -
25,000bpd in 2014.
Intent to develop two
other fields in the
block - Lucapa and
Malange. Chevron
extended its contract
on the Maersk
Deliverer semi-sub, at
a cost of $387m from
June 2015 - June
2017.
Table 13.1 Total’s Southern African Licence Blocks (Country, Operator, Block,
Onshore / Offshore, Other Companies, Status)

Southern Africa Oil & Gas Market 2015-2025

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Southern Africa Oil & Gas Market 2015-2025