The Geological Society
Huge amounts of gas have been discovered offshore East Africa, mainly in Mozambique, then Tanzania and last month in Kenya.
We will wait to see if and when this gas can be moved economically to market, given the plentiful amounts of gas being found globally and the potential for shale gas to be exported as LNG from the USA.
Imminent high value is more likely to result from the discovery of commercial volumes of oil offshore – but where?
Oil has been discovered onshore in the Albertine Graben of Uganda (and very recently in Kenya).
Large amounts of gas have been discovered offshore – in both Mozambique and Tanzania – but no oil as yet.
The gas volumes discovered in both Mozambique and Tanzania are significant and as a distant observer, one’s immediate response is to think that they are both candidates for LNG schemes. However, this perspective ignores the focus both host governments will have on domestic issues such as creating a local market and providing employment in the relatively short term.
A combination of successes – for example shale gas onshore in the USA, conventional gas in the Eastern Mediterranean and on the NW Shelf of Australia – have led to there being a large number of global LNG opportunities, for gas to move to either Europe or SE Asia, which may mean that somewhat more costly East African LNG will have to wait its turn in the queue. Whilst the Majors may be content to ‘bank’ gas for the longer term, ready for the day the price rises and it is needed, as pointed out above this may not at all be in line with the hopes and expectations of the governments of Tanzania and Mozambique.
The attraction of offshore oil would be that the global price is probably going to remain high and that a discovery of a few hundred million barrels can be developed fairly rapidly with an FPSO and shuttle tankerage (indeed many tankers pass this way as they go around the Cape of Good Hope!).
So where might there be oil offshore?
Source(s): The Geological Society, Finding Petroleum