Sub-Saharan Africa’s oil production aspirations could be scuppered by a lack of investment and low number of new projects coming online, according to GlobalData.

Sub-Saharan African nations are keen to rebound and ramp up investment in the oil & gas sector after a difficult 2020. However, the largest producers in the region – Nigeria and Angola - are forecast to see declining crude oil and condensate production from 2021, and have a relatively small number of projects coming online within the next five years, said analytics firm GlobalData.

“Sub-Saharan Africa has so much potential. It could easily overtake Europe in regional oil & gas production if utilised properly,” remarked Conor Ward, Oil and Gas Analyst at GlobalData. “However, companies have been more cautious than ever over their investments. Some of the huge discoveries made over the past decade have seen significant delays with no final investment decision (FID) in sight: as is the case with Shell’s Bonga Southwest/Aparo, which was discovered over 20 years ago.”

Gas will start to outweigh crude oil and condensate 

European majors are gravitating towards an increasingly gas-heavy portfolio to reduce their carbon emissions. This is forcing them to reallocate capital away from oil-heavy developments to lower carbon projects. Sub-Saharan Africa’s total output (boed) is forecast to grow to 2025, as the production of natural gas will begin to outweigh crude oil and condensate. Gas currently makes up 22 per cent of the regions’ production and is forecast to grow to approximately 30 per cent by 2025. However, this forecast hinges upon multiple developments that have not yet received FID.

“Sub-Saharan Africa is seeing a shift of investment away from the more developed countries in the region – most notably Nigeria – and more towards frontier countries such as Mauritania, Senegal, Mozambique and Uganda, as the fiscal terms offered by the host countries are far more appealing and have a large untapped resource base,” continued Mr Ward. “If Nigeria wishes to continue to attract investment and achieve a plateau in production, it will need to tackle the above ground risks which companies face.”