Oil and gas industry offers major opportunities

SOUTH Africa is ideally positioned, not only from a geographical but also cost perspective, to capitalise on the tremendous opportunities that exist in the mainstream supply chain of goods and services to Africa’s oil and gas industry, says Mervyn Cookson, Safcor Panalpina’s Western Cape regional director for operations. What is more, South Africa is able to offer competitive and quality products to the continent’s oil producing nations. Pointing to the significant opportunities for growth that exist, Cookson says: “The involvement of the company’s oil and gas division has transcended oil and gas upstream producers to infrastructural development and retail support, particularly in West African countries.” Africa’s growing importance as a source of oil for Western economies was underscored in Cape Town last year by Senator Rodney Ellis, a commissioner on the US Commission on Energy Policy (NCEP), who said the USA would ensure that direct foreign investment into Africa would continue and translate into revenue. “The vast influx of wealth and investment into these countries could potentially transform into economic growth and political capital for the region as a whole – providing sustained growth and strength not only for these nations’ economies but in the opportunities and possibilities for the people of this region for generations to come.” Ellis, alluding to the anticipated increased world demand for oil – up 50% from 78 million barrels a day to 120 MBD by 2025 – said spare capacity was both extremely limited and concentrated in the Middle East, leaving world markets extremely vulnerable to shortterm disruptions, driving prices upwards and increasing general volatility. The US plans to replace more than 75% of its oil imports from the Middle East by 2025, investing more than US$10 billion a year in oil activities in Africa and could up its imports from central Africa from 16% to 25%, by 2015. Current oil production by African countries, with total oil reserves estimated at 80 billion barrels, or 8% of world crude reserves, is as follows: ● Nigeria – 11th largest producer in the world – 2.5 MBD and oil reserves of 32.5 billion barrels. ● Angola – 2nd largest producer in Africa. Oil production is projected to reach 2 MBDs by 2008. ● Sudan – produced 500 000 barrels per day in 2005, with reserves of 563 million barrels. ● Equatorial Guinea – has proven oil reserves of 1.28 billion barrels and produced 371 700 barrels per day in 2004. ● Gabon – has proven reserves of 2.5 billion barrels and produces about 230 000 barrels a day.