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Why Africa?

Vast, untapped potential in Africa

In 2008, 12% of the world’s oil produced came from Africa*. Afren holds a unique position within this continent and the roots of our business grow deeper here every year.

Potential of Africa

Over the last two decades, proven oil reserves in Africa have increased by 112% – while in West Africa, the increase has been 187%. There is no other region in the world that has matched this expansion. In fact, many established producing areas’ resource base has contracted over the same period.

However, it is not just the vast, largely untapped, natural resources that give Africa such strong potential – it also has a supportive political climate. The governments of the countries in which we operate understand the value of their resources – and recognise that a stable structure is vital to allow local and international stakeholders to work together, responsibly.

Nigeria also offers a stable fiscal environment. It yields high-margin barrels and has several established oil industries that are at an earlier stage of maturity than other hydrocarbon provinces. As a region, it also offers longer- term gas commercialisation opportunities
of significant scale.

Africa’s importance in terms of global oil supply – and that of West Africa especially – is predicted to expand substantially over the near to medium term. West Africa already supplies the US with 15% of its oil and gas and this is expected to increase to 30% over the next decade.

West Africa in particular is set to substantially expand its market share over the next few years – and Afren is well placed to capitalise on this growth.

Future focus

Afren is particularly interested in the large number of discovered yet undeveloped oil and gas fields, especially in Nigeria. The majority of these fields reside as ‘fallow’ assets within the Major oil and gas producers’ portfolios – they typically fall below the materiality and economic thresholds at which these companies would actively progress development. Yet to a smaller, more agile producer, such as Afren, they represent significant opportunities of scale.

There are positive signs that a secondary market is opening up in Africa. Governments are focusing more on the potential of their natural resources and seeking to stimulate greater
local involvement. Acreage is increasingly being awarded to indigenous companies who seek to work with independents, that bring both technical expertise and financial resources.

Afren is in a unique position to capitalise on this situation – having proved our technical, operational and financial capabilities and having strong roots in Africa.