Top issues facing Africa's oil & gas industry

The oil and gas industry in Africa continues to face market challenges from the low oil price, competition for revenue growth and increasing expectations from investors and regulators. The annual report released by PwC Africa Oil and Gas Advisory Leader, Chris Bredenhann, sheds light on the developments in the sector over the past 12 months. The report highlights the impact of the low oil price, which has persisted since 2014, leading to cost reduction initiatives by oil companies in response. However, this new normal has also resulted in fewer new exploration finds, causing Africa's relative share of reserves in the oil and gas sector to decline slightly compared to the rest of the world. Despite this, there has been some growth in the gas space, with significant finds in countries like Senegal and Angola. The shift towards gas finds is noticeable, indicating a changing landscape in the industry. One of the key areas of interest discussed in the report is Mozambique, which has become an attractive market for gas. Companies like E&I and ExxonMobil are making substantial investments in the country, signaling positive momentum in the sector. The report also emphasizes the importance of regulatory frameworks in driving investment and growth in the oil and gas industry. Uncertain regulatory environments have consistently been highlighted as a top issue hindering the industry's development. Examples from South Africa, Nigeria, and Angola demonstrate how regulatory changes can either encourage or stifle investments in the sector. The competition landscape in Africa's oil and gas sector is evolving, with emerging players like South Sudan and Equatorial Guinea ramping up production. However, the industry is facing challenges related to infrastructure development in these frontier destinations. Building necessary infrastructure like roads, airports, and ports is crucial for monetizing resources and getting products to market. The report underscores the need for addressing infrastructure challenges to unlock the full potential of emerging oil and gas provinces in Africa. Despite the obstacles, there are opportunities for growth and development in the sector, particularly in frontier destinations where new discoveries are being made. Overall, the report provides valuable insights into the key issues facing Africa's oil and gas industry, highlighting the importance of navigating challenges and capitalizing on opportunities for sustainable growth. With a strategic approach to addressing regulatory, infrastructure, and market challenges, Africa's oil and gas sector can continue to thrive in a competitive global landscape.