Africa Oil Week: Geopolitical Issues Omnipresent

Industry remains in rude health
Last month’s Africa Oil Week conference in Cape Town ably demonstrated that interest in the E&P sector across the continent remains strong. Against a backdrop of extensive geopolitical uncertainty, attractive geoscience opportunities remain plentiful. While much of the focus was on established provinces, most particularly Nigeria, we see exploration will provide the real buzz for the sector, with 2014 set to be a bumper year on this front.

Conference mirrors growing interest in region
Attending the recent Africa Oil Week conference in Cape Town afforded us the chance to gauge the appetite for investment in oil and gas opportunities across the world’s largest continent. While mining in Sub-Saharan Africa has endured a difficult 12 months, there was little evidence of this at the November oils event, with a significant step-up in scale from previous years as the conference moved to the much larger Cape Town International Convention Centre to accommodate the estimated 1,600 delegates.

Geopolitical issues omnipresent
Despite the clear investment appetite, ahead of the conference it could hardly be said that things have been plain sailing across Africa. In the programme notes, organiser Global Pacific & Partners pointed to a “Winter of discontent” highlighting the numerous examples of political turmoil across the likes of Libya, Algeria, Egypt and Tunisia in North Africa, and Chad, CAR, Sudan, Somalia and Eritrea further south, which have affected the development of both established and nascent oil and gas industries.

A further trend towards resource nationalism was also well documented and we certainly heard noises from numerous parties around town that this is a trend expected to continue. Kenya in particular was singled out for upping the ante with operators and effectively blocking extensions to exploration permits. While this could significantly affect a number of juniors struggling to finance activities, it does play into the hands of those ready and willing to commit to drilling, while also, one assumes, meaning acreage in what is one of the most exciting provinces on the planet at the moment could be rapidly recycled.

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