Frost & Sullivan: West African Oil & Gas Market Upbeat as Exploration Initiatives Pick up Steam

March 3, 2011 - PRLog -- CAPE TOWN. – 1 March, 2011 – The demand upswing for oil products from West Africa is primarily due to the growing demand for petroleum products in the United States, China and emerging economies. This has triggered prolific production and exploration initiatives in West Africa. Although there are significant natural gas reserves within the region, production of natural gas is limited primarily to Nigeria with the majority of countries still flaring their natural gas.

Nigeria is responsible for 80 percent of West Africa’s natural gas exports, accounting for approximately 725 billion cubic feet in 2009. The only other significant exporter of natural gas from the region was Equatorial Guinea with total exports touching 180 billion cubic feet in 2009.

New analysis from Frost & Sullivan (http://www.energy.frost.com), The West African Oil and Gas Market, finds that the majority of exploration in West Africa is conducted in off-shore basins, such as Gulf of Guinea, Niger Delta, Rio-del-Ray and Duala. Due to recent discoveries, increased production is expected in Nigeria, Congo, Ghana and Equatorial Guinea over the next five years.

“Greater focus on natural gas production and refining in recent years has opened new export markets and generated additional revenues for the West African economies,” says Frost & Sullivan Energy and Power Industry Analyst Ross Bruton. “The development of liquefied natural gas (LNG) refining capacity within West African states, particularly Equatorial Guinea, Cameroon and Nigeria is indicative of the future development of the natural gas export market in the region.”

A significant challenge to downstream markets of the region is the low availability of refining capacity and adequate logistical infrastructure. Existing refining capacity operates at very low efficiencies. Therefore, despite being oil rich, most West African states are heavily dependant on imports of refined oil products.

Furthermore, once the product is imported, logistical infrastructure for the movement of product inland is significantly undeveloped. Existing road, rail and pipeline networks are not maintained, resulting in long delays in the delivery of product.

Owing to the lack of knowledge in best practices within the industrial sector of the region in engineering, construction, project development, finance, as well as product and skills sourcing and procurement, the West African region represents a significant opportunity for consultancy services. Consultancy services can provide accurate and up-to-date market intelligence and forecasts as well as specialised expertise in project development to help stimulate industrial growth through foreign direct investment and local business development.

“Intensified exploration initiatives are being undertaken in Ghana following the discovery of the Jubilee field in the deep water Tano Block as well as Gabon, as the government scouts for new ways to counter diminishing oil production,” concludes Bruton. “A firm understanding of license ownership rights and taxes and levies payable, as well as a strong relationship with government departments and decision makers is essential to ramp up the efficiency of upstream operations within the region.”

If you are interested in more information about this study, please send an e-mail with complete details to Christie Cronje, Corporate Communications, at christie.cronje@frost.com.

The West African Oil and Gas Market is part of the Energy & Power Growth Partnership Service program, which also includes research in the following markets: Overview of the Namibian Electricity Industry, Overview of the Zambian Electricity Industry, Annual Tracker of Renewable Energy Projects in Sub-Saharan Africa, Overview of the Nigerian Electricity Industry, and An Analysis of Energy Efficiency Initiatives in South Africa, among others. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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The West African Oil and Gas Market
M5D5

Contact:
Christie Cronje
Corporate Communications – Africa
P: +27 21 680 3566
E: christie.cronje@frost.com

http://www.frost.com

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Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's research and consulting services empower clients to generate, evaluate, and implement effective growth strategies.