By Andrew Hobbs
EAST Africa is the most significant emerging gas province in the world today, Woodside Energy’s executive vice president of global exploration Phil Loader told an audience in Perth in September.
Speaking at the East Africa Oil, Gas and Energy conference in Perth, Mr Loader said over 150 trillion cubic feet of gas had been discovered in East Africa in the past five to six years, after decades of being overlooked by explorers.
Mr Loader said the problem there was a lack of a foreseeable market, with the hunt for oil being historically far more common and lucrative.
“With higher prices and a decline in opportunities in the proven provinces, potential was focused towards some of the more frontier or emerging petroleum provinces,” he said.
“As a consequence of the continued growth in LNG capability, much of which has been driven and delivered out of Western Australia, the industry was able to consider gas as a success space and value realisation became a reality.”
Woodside has experience with operating in Africa, as does Mr Loader, who said he had spent much of his 35 year career as a geoscientist working in different parts of the continent.
Woodside withdrew from the Lake Tanganyika South production sharing agreement it held with Australia’s Beach Energy earlier this year, giving its partner a 100 per cent holding in the block.
Mr Loader said the company had shared its views and observations with Tanzanian government stakeholders, saying the feedback was well received and left a constructive legacy for the company’s investment in the nation.
“The decision to exit the Lake Tanganyika South opportunity and in keeping with our stated disciplined approach to exploration and the need to maintain a strong alignment between our strategy our ability to leverage our core strength and deliver materiality to our shareholders,” he said.
That said, the company continued to see a wide range of opportunities throughout East Africa which it said fit with its growth and execution strategies.
“Future exploration and development will call for a different and deeper set of competences and capabilities to both explore and exploit,” Mr Loader said.
“This is one region were Woodside is particularly well positioned and many regard the key ingredient behind our strategic intent as we seek to build a global portfolio of both scale and impact.”
The Australian company had been working to rebuild and rebalance its global exploration portfolio, designating SubSaharan Africa as a core focus region for the company.
Currently, the group has stakes in projects offshore Morocco, the Canary Islands, Gabon and Cameroon – the latter two being minority stakes held in partnership with Noble Energy.
Noble had a bit of bad news in September when its Cheetah exploration well in the Tilapia license offshore Cameroon, in which it holds an operating 47 per cent stake to Woodside’s 30%, was plugged and abandoned after hitting non-commercial oil and gas reserves.
Mr Loader said Woodside expected to see busy times ahead for the region.
“We expect to see constantly changing strategies and appetites for all the African players as they seek to find the right fit between budget and exploration rigs,” he said.
“The companies likely to succeed in East Africa will bring the right blend of technical expertise plus the commitment to sustainability and maintain the social licence to operate. Woodside have exceptionally strong credentials in this regard.”
“There will continue to be a diverse range of opportunities for companies to invest in various emerging provinces throughout the region and in the next few years the Kenya, Madagascar and Uganda already working towards new phases of licencing,” he said.
“Woodside will continue to evaluate these opportunities in line with our global strategy.”