Consultancy Fitch Solutions estimates that oil production in sub-Saharan Africa will fall 3.7% this year, dragged by the fall in Nigeria, but foresees a “brighter future” for the region’s gas.
“We anticipate that production of crude, natural gas and other liquids will fall by 3.7% this year, impacted by the persistent decline in Nigeria, the region’s largest oil producer, which has been significantly affected by reduced investment in current wells and by a lack of maintenance in recent years,” the analysts write.
In an analysis of oil and gas production in the region, sent to investors and cited by Lusa, Fitch Solutions, owned by the same owners of the financial rating agency Fitch Ratings, writes that, despite the current difficulties, “the beginning of the production in several new markets will help maintain positive growth in the medium term, but still struggling to return to pre-pandemic levels.”
The outlook for the evolution of gas production shows, they say, “a brighter future, with production increasing strongly during this decade, supported by the development of large gas resources discovered in West and East Africa”.
Fitch Solutions estimates that sub-Saharan Africa’s GDP will grow 3.2% this year, boosted “by high oil prices, which support exporters in the region, and by the recovery of economic activity”.
While Nigeria is expected to experience a 9.1% drop in oil production this year, “positive growth in Angola should help accommodate the general drop in regional production, as exploration activities that are starting by several companies international markets will boost production by 3.5% in this Portuguese-speaking country”.
Angola thus recovers from the strong decline of 9.2% in 2021, says the consultant, also noting that prices and the removal of production limits by the Organization of Petroleum Exporting Countries and allies (OPEC+) will further help Angola to increase production.
In terms of gas production, it is expected to increase from 85.9 billion cubic meters to 150.6 billion cubic meters in 2031, with Mozambique, Nigeria, Mauritania and Senegal leading the increase in production.
“The biggest sector of investment in sub-Saharan Africa over the next few years will be the expansion of liquid natural gas export capacity,” says Fitch Solutions.
While Eni should start producing later this year on the Coral FLNG project, TotalEnergies will only be able to launch production in 2026 and ExxonMobil should only make the final investment decision in 2023, with production starting scheduled for 2027, concludes the consultant.
