The Managing Director, Seplat Petroleum Development Company, Mr. Austin Avuru, has described West Africa as a prime petroleum province in the world.
He made the submission in London in a paper he presented at the just concluded International Petroleum Week 2013 organised by the Energy Institute.
To buttress his point, Avuru pointed to the fact that "Africa's contribution to world reserves has increased from 7.0 per cent in 1995 to 8 per cent in 2011 with estimated 2.8 percent of world oil (68 bn barrels) in Sub-Saharan Africa and 44 bn barrels of those in the Gulf of Guinea."
He also highlighted growing reserves in Libya, Nigeria and Angola while noting that it is a "trend likely to continue with new discoveries announced in Ghana, Egypt, Algeria, Libya, Tunisia, Mozambique, and Uganda in 2011."
Highlighting the strategic position of West Africa in the global petroleum game, Avuru noted that West African countries such as Nigeria, Ghana, Cote d'Ivoire, Cameroon, Equatorial Guinea, Gabon and Chad have cumulative oil reserves of over 60bbls of oil and over 208 tcf of gas, making them a key resource base for oil and gas exploration with potential for significant spikes in reserves.
Taking a broad view, Avuru noted that oil and gas activity on the continent extends from Mauritania to Angola with Nigeria and Angola accounting for the lion share, an impressive 80 percent of the total sub-region's reserves as at January 2012. New producing countries have also joined the big players following the discovery of oil in commercial quantities in Chad, Ghana, Cote d'Ivoire, Liberia, Mauritania.
As if to dispel the cynicism of naysayers, Avuru noted that the potential for growth remains high while explaining that latest findings indicate that future growth will come from West Africa because since 2007, West Africa has seen more success in exploration than other regions of the world - making it attractive for investment with the transformation of margin, deep water West Africa, and offshore East Africa as the core areas currently attracting most exploration interest.
Avuru informed the gathering that since the Jubilee discovery in 2007, companies are exploring other parts of region (Ghana to Mauritania), looking for analogous Cretaceous turbidite prospects with Offshore explorations in Sierra Leone and Cote d'Ivoire look promising, making them high potential investment destinations beyond Nigeria and Angola.
Concluding his argument in favour of West Africa as new prime destination, Avuru informed his audience that an estimated 40bn plus barrels of oil exists in technical reserves - most of it in the Niger Delta Basin of Sub-Saharan Africa with another estimated 55bn barrels in yet-to-find resources making the sub region the second biggest region in the world after Latin America.
Avuru ended his presentation by pointing out the investment upsides for investors. He told the gathering that opportunities exist for mid-sized companies to enter the market at the beginning of its growth and therefore maximise returns while companies with positions in frontier regions stand to gain as plays mature.
He also highlighted the opportunities for divestment over the coming years as larger companies give way to smaller independents and indigenous companies due to local content policies and asset rationalisation goals.
Finally, he forecast more mergers and acquisitions in future driven by majors because according to him as opportunities are further squeezed, consolidation will accelerate across the sector while competition continues to intensify.