FID 2021: Sub-Saharan Africa


As with the rest of the world, 2020 proved to be a quiet year for final investment decisions (FIDs) on oil and gas projects in Sub-Saharan Africa.

According to IHS Markit “reserve additions from final investment decisions and project start-ups [were] at their lowest levels in three decades”. In fact, only two FIDs were taken in 2020, Senegal’s Sangomar Phase 1 early in the year, followed by the smaller Boatou Marine project in the Republic of Congo.

Will 2021 prove to be a fuller year of FIDs? Possibly, if no more curve balls are thrown in the way of operators. Here are some projects we have our eye on.

Angola

We may see two exciting FIDs from Angola this year; in offshore Blocks 32 and 15/06 respectively.
A decision on the “Northern Development Area Phase 1” in Total’s Block 32 was delayed as COVID-19 interrupted appraisal operations, with completion of the final well now due in the second half of 2021. Block 32 contains significant oil reserves of an estimated 658 million barrels, however the ultra-deep-water (up to 1950m) nature of the project, in addition to the complex web of six fields covering an area of 800 km2, present an interesting challenge for the French supermajor.

The second possible Angolan FID is Agogo Phase 2, situated offshore in Block 15/06. Operated by ENI Angola, the latest reports suggest that ENI are in contact with contractors regarding the full field development and that the planned 2021 FID is still likely to go ahead as planned.

Cameroon

A joint venture between partners Bowleven, NewAge, LUKOIL and SNH, the 461 km2 Etinde Permit lies in shallow water offshore Cameroon. Exploratory drilling in the area in 2018 resulted in oil, condensate and gas discoveries and left considerable scope for further exploration.

In March 2020, TechnipFMC were appointed carry out the front-end engineering and design for the project, however in the same year FID was delayed on two occasions and is now expected in mid-2021.
Due to these delays, the Etinde partners must now seek a license extension before progressing. The current license expires in January 2021.

Mozambique

Another casualty of the COVID-19 pandemic, delayed FID on ExxonMobil’s $30 billion Rovuma LNG project in Mozambique’s north is in theory expected in 2021, although some sources have reported that there now may be no final decision until 2022.

At the close of November 2020, the American supermajor entered talks with Mozambique LNG operator, Total. In a bid to cut costs, both parties are seeking to extract thicker gas from a field that straddles their two neighbouring developments. The success of these talks could prove crucial for ExxonMobil in securing investors for its Rovuma project and reaching that all-important FID.

Are you closely watching current funding trends across African oil and gas projects? Join the Finance Forum at AOW 2021 to hear the latest from financiers and operators. Learn more here.
 
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