Forecast: Who Will Be Africa’s Biggest Spenders On Oil Drilling

Forecast: Who Will Be Africa’s Biggest Spenders On Oil Drilling

Driven by new offshore oil discoveries, Angola, Nigeria and Egypt are expected to be Africa’s biggest spenders on offshore oil drilling through 2016, according to a report in BusinessDay.

Offshore drilling is expected to cost Nigeria, Africa’s leading oil producer, $2.26 billion in 2016, according to the latest report from GBI Research, a business intelligence firm. The report forecasts offshore drilling expenditure in the Middle-East and Africa up to 2016.

Angola, Africa’s second largest oil producer is expected to remain the biggest spender in the region over the next few years at least. GBI Research expects drilling expenditure in the Southern African country to continue climbing, hitting $6.67 billion in 2016.

Egypt is expected to spend $1.52 billion on oil drilling by 2016.

An increase in offshore discoveries is prompting a surge in exploration activity across the Middle-East and Africa and driving up the amount spent on drilling, GBI reports.

The latest oil and gas report forecasts offshore drilling expenditure across the region to climb steadily from $13.56 billion in 2012 to $17.03 billion in 2016. The total expected for the five-year period through 2016 is $77.3 billion – an increase of about 22 percent over the 2007-2011 total of $63.5 billion.

Drilling expenditure is expected to grow for all major producers in the region, with West Africa leading in terms of exploration. Countries relatively new to the offshore drilling industry, such as Sierra Leone and Liberia, may prove to be future competition for the more established West African producers, the report said.

Ghana is expected to emerge as one of the most prominent countries in West Africa for the exploration of oil and gas, with 16 offshore discoveries between 2008 and 2012 – second only to Angola, with 22 discoveries in the same period.

Tanzania, Mozambique and Uganda have seen significant new discoveries with prospected fields in Sierra Leone, Mali and Kenya.

In Nigeria, no significant investment has been recorded in oil exploration in the last six years and the number of wells drilled has been on the decline since 2006, according to a 2012 CBO Capital report.

Nigeria’s delay in passing the Petroleum Industry Bill has been linked to these declines, as oil companies put exploration and development activities on hold, the report said.