PwC director Chris Bredenhann said the easy oil discoveries had been made. As opportunities became scarcer, Africa was becoming a more attractive destination, but more gas than oil was being discovered. In 2016, five of the world’s 10 biggest new discoveries were in Angola and Senegal.
PwC senior manager Derek Boulware said several international oil companies had small offices in SA, but they were not actively investing here because of regulatory uncertainty.
Most respondents in the survey expected oil prices would remain within the $50-$60 a barrel range over the next year and were adapting their activities to prosper in this environment. Estimates for the number of job cuts globally in the oil and gas industry over the past three years were 250,000-440,000, which may cause shortages
of essential skills in the future, Bredenhann said.
Respondents said their two top strategic priorities in the next three years would be to improve efficiencies, followed by restructuring and implementing new organisational design.
Capital spending was also rising in importance. In Africa, one of the biggest recent capex decisions was Eni and Galp’s $7bn Mozambique investment.
In the past year, a third of the companies surveyed were takeover targets and 54% were approached for potential partnerships by other oil majors.
Local partnerships, to meet African governments’ requirements for more local content and industrial development, were becoming more frequent.
Bredenhann said respondents generally acknowledged the need for more local content, but a quarter said it had resulted in projects being delayed or postponed. The main challenges were that local educational systems were unable to produce the necessary skills and regulatory frameworks were too restrictive, unclear or inconsistently applied. Almost a third of respondents said the main qualification for local partners was to have adequate technical skills.
Bredenhann said oil and gas companies were increasingly turning to technological innovation to gain competitive advantage, but this carried cyber security risks.
Africa is back in oil firms’ sights – Business Day