Business
More for governments and less for companies with new oil licensing agreements in Africa
Sudan is due to allocate three offshore and two onshore oil blocks by the end of 2014, and South Sudanese officials have talked about some new licenses, though heightened political uncertainty there is likely to deter the fainthearted. In Kenya, a licensing round was delayed in 2013 and no new date has been set.
Oil companies have resigned themselves to a new petroleum act imposing tougher terms and a higher free state carry. Tanzania launched a licensing round in late 2013, again with tougher terms, and with a state stake of up to 75 percent. Van Gessel said she expected liquid natural gas production in Tanzania by 2018.
In Uganda, she said the development of the oil and gas industry had “come to a standstill” due to increasingly tougher requirements from the state, which had resulted in the apparently indefinite delay of a proposed 2013 licensing round. Mozambique, by contrast, is expected to offer new contracts this year, which should attract significant investor interest.
Overall, the trend is towards tougher fiscal terms for international oil and gas investors, higher free state carries and more local content. To those who share her analysis but not her concern , arguing that these are welcome trends indicating that African governments are finally beginning to secure sufficient returns for their irreplaceable natural endowments, Van Gessel replied that Africa was becoming less and less competitive internationally. She concluded, “Africa’s share of international oil and gas exploration is already too low. Who does it help it if drops lower?”
