Opportune time for Africa's oil, gas industry to consider change

The African continent has long been a focal point for the oil and gas industry, with many countries depending heavily on oil revenues. However, the decline in global oil prices has presented challenges for Africa, impacting countries that traditionally relied on oil as a major source of income. Despite these difficulties, there are still significant opportunities to be found in the sector, according to Chris Bredenhann, Africa Oil and Gas Advisory Leader at PwC. In a recent interview with CNBC Africa, Bredenhann highlighted the key findings of PwC's report on the state of the oil and gas industry in Africa. The report emphasized the importance of government and local governance in attracting investment to the sector. Bredenhann stressed the need for regulatory certainty, clarity on tax and royalties, and a supportive investment environment to maintain momentum in the industry. One of the major challenges facing the industry is the need for cost reduction initiatives. The report noted that significant efforts have been made to cut costs and reduce capital expenditures in response to lower oil prices. However, Bredenhann pointed out that to stimulate growth, the industry must also focus on technological innovation. While Africa may lag in research and development investment compared to other regions, the introduction of digital technologies could play a critical role in driving efficiency and competitiveness. Currency volatility has further compounded the challenges facing the sector, with currencies across the continent experiencing fluctuations. The impact of currency depreciation is particularly pronounced in light of the lower oil prices, putting pressure on host countries to balance their budgets and generate income for essential infrastructure and social spending. In response, some countries have ramped up production to boost revenue, while also prioritizing local content development to ensure that local industries benefit from the sector's growth. Despite the current challenges facing Africa's oil and gas industry, Bredenhann remains optimistic about the opportunities that lie ahead. By addressing regulatory uncertainties, embracing digital technologies, and navigating currency volatility, the continent can position itself for sustainable growth in the sector.