Sub-Saharan countries are playing an increasingly prominent role in African oil production this year.

OPEC members Nigeria and Angola remain among the continent’s top producers. In fact, they, along with Libya, Algeria, and Egypt, will account for 80% of African oil output in 2023.

But, as noted in the African Energy Chamber’s (AEC’s) newly released outlook report, “The State of African Energy Q1 2023,” much of the remaining oil this year will come from sub-Saharan countries like Gabon, Chad, Congo, Ghana, and Equatorial Guinea. Let’s examine recent oil industry developments in each of these countries in greater detail.

Gabon

Since the 1950s, oil exports from Gabon have accounted for a majority of the nation’s GDP. After seeing a peak in 1996, a price crash in 2014, and a natural decline in production that collided with the widespread havoc that COVID-19 wreaked on the global oil sector, recent developments in the Gabonese oil market could potentially bring about the return of more prosperous times for the country’s oil producers.

The unexpected oil market disruptions induced by Russia’s invasion of Ukraine and other economic shifts have inadvertently created new opportunities for Gabon, and a series of regulatory changes have revitalized foreign interest in the country’s fossil fuel resources.

President Ali Bongo Ondimba’s administration aligns with the AEC’s position that Africa can simultaneously work to lessen the effects of climate change and transition to renewable energy sources while promoting economic growth through continued oil and gas development.

Gabon’s efforts to protect its rainforests from deforestation and degradation were recognized when Gabon became the first African nation to receive payment from the UN’s Central African Forest Initiative (CAFI). At the same time, Gabon sought to maintain its rank as the fifth largest sub-Saharan oil producer by opening new licensing rounds for shallow and deepwater drilling and reorganizing the Gabon Special Economic Zone (GSEZ), easing customs compliance and offering tax advantages to foreign investors. A new hydrocarbons code also offers international oil companies better returns on exploration and production (E&P) investments made in Gabon.

Although Gabon’s oil production failed to achieve its target rate of 220,000 barrels per day (bpd) by 2023, it did reach 200,000 bpd in April, a marked improvement over the 180,000 bpd rate noted in 2020.

While much of the work underway to raise this production rate comes in the form of mature or marginal oil field redevelopment led by Perenco and BW Energy, the region saw a total of 18 new appraisal and exploratory wells drilled between 2022 and 2023.

If the Gabonese government continues its push to attract foreign investment and further offshore deepwater exploration, the country will remain on a promising path toward game-changing discovery and profitable development.

Chad

With 2022 oil production averaging 69,000 bpd into May, Chad saw an increase to an average of 92,000 bpd for the second half of that year, accompanied by PetroChad Mangara’s (PCM) export of its first barrel of oil to the Chad-Cameroon pipeline in July.

These developments came after Perenco’s acquisition of PCM and with support from the Société des Hydrocarbures du Tchad (SHT) and Chad’s newly appointed Minister of Petroleum and Energy, H.E. Djerassem le Bemadjiel.

Under the new minister’s guidance, considering his background as a trained geologist, his experience working for the oilfield services company Schlumberger Limited, the Djarmaya refinery, and as an adviser on oil inspection for President Idriss Deby, Chad’s oil and gas sector stands ready to grow into a prosperous future in support of the national economy.

Landlocked Chad holds approximately 1.5 billion barrels of crude oil reserves and relies on pipelines for export. Chad recently signed on to a project to erect a network of three multinational pipeline systems linking 11 different countries to multiple refineries, storage depots, liquefied natural gas terminals, and gas-fired power plants. The project has an expected completion date in 2030 and should prove to reduce Chad’s dependence on imports of refined petroleum products.

Going forward, the AEC recommends that Chad continues to seek foreign investment and public-private partnerships to develop its sizeable hydrocarbon and renewable resources with an aim toward reducing energy poverty and fostering economic growth.

Congo

As sub-Saharan Africa’s third largest oil producer holding 2.9 billion barrels of proven reserves engaged in an offshore extraction rate of 336,000 bpd, The Republic of the Congo, or Congo Brazzaville, is always looking to scale up its output.

After improving the fiscal terms for operators and opening a total of 28 blocks in licensing rounds between 2015 and 2019, Congo has attracted numerous global energy majors, including TotalEnergies, Perenco, Chevron, Eni, and Lukoil.

As of April 2023, the Congo is nearing closure on a new production-sharing deal with Chevron and Angola’s Sonangol EP concerning an offshore oil block shared by both countries.

Ghana

Ghana has become one of the most attractive prospects in the sub-Saharan region, having taken a highly engaged approach to securing financial backing for its numerous energy project proposals.

The Petroleum Commission of Ghana intends to increase E&P within the country’s borders as it considers allocating new offshore blocks and conducts a review of operator fiscal terms to ensure they encourage the development of new global partnerships. By potentially offering a sliding taxation scale, on which ultra-deep wells would see the lowest tax rate, Ghana stands to position itself as a lucrative prospect for international oil companies looking to invest.

In addition to introducing plans for a $150 million logistics hub in Ghana, the Ghana National Petroleum Corporation (GNPC) also intends to begin drilling operations in the Voltaian Onshore Basin by early 2024.

Furthermore, AFC Equity Investment’s recent takeover of Aker Energy’s stake in the Deepwater Tano Cape Three Points (DWT/CTP) Block off Ghana’s coast marks the start of redevelopment efforts for the ultra-deepwater Pecan oil field and its estimated reserves of 450 million barrels of oil equivalent (MMboe) to 550 MMboe, which have been on hold since the COVID-19 outbreak in 2020.

Ghana will showcase these various proposals at African Energy Week (AEW) 2023 in Cape Town from October 16-20, 2023, taking advantage of the industry’s premiere conference for networking and investment opportunities.

Equatorial Guinea

In February 2023, the Ministry of Mines and Hydrocarbons of Equatorial Guinea signed three production-sharing contracts with Panoro Energy and the Africa Oil Corporation, starting a new chapter of exploration and production for the West African nation.

Block EG-01 went to Panoro Energy, fortifying its partnerships with six other oil and gas wells in the neighboring Ceiba Field and Okume Complex. The block borders Block G, which holds more than one billion barrels of oil reserves.

The Africa Oil Corporation secured an 80% share in blocks EG-18 and EG-31, with GEPetrol holding the remaining 20% interest.

The following month, the Ministry of Mines and Hydrocarbons also approved a Plan of Development (POD) for the Venus discovery in Block P off Equatorial Guinea’s coast. Along with partners VAALCO and GEPetrol, Atlas Petroleum International Limited will begin drilling the first of two wells on the site in 2024, with an expectation of first oil in 2026. Upon completion of the $310 million project, the developers anticipate that the Venus discovery will produce roughly 15,000 gross b/d of oil over a 25-year production lifespan.

These production-sharing contracts reflect Equatorial Guinea’s positive movement toward advancing the country’s oil and gas industry and adding a welcome boost to its economy.

While the whole of Africa deserves to benefit from its oil reserves to a much greater degree, progress is underway. Massive foreign investment and substantial infrastructure developments are necessary to realize Africa’s full potential in the global oil economy. At the same time, we must recognize the contributions of these smaller, sub-Saharan producers who are doing their part to keep pace with the effort to achieve that greater goal.

For more information about our upcoming report, visit https://EnergyChamber.org.