adminAfrica’S energy industry could soar in the coming years, with Mozambique and Tanzania set to emerge as new frontiers, if they can attract enough badly needed investment, a study by PriceWaterhouseCoopers says.
Fin24 report that it found six of the top 10 global discoveries in 2013 were made in Africa, with more than 500 companies now exploring across to the continent.
The report’s advisory leader, Chris Bredenhann, said large gas finds in Mozambique and Tanzania would make the world ‘‘take note of East Africa as an emerging player in the global industry’’, but he cautioned that the continent faces fierce competition for vital investment from other parts of the world.
The study said a ‘‘huge obstacle to growth in Tanzania and Mozambique is the cost of the infrastructure required, which neither country can afford without help from foreign investors.’’
But a positive note was that demand for oil in Africa was also expected to ‘‘rise significantly’’ over the next 20 years, driven by population growth, urbanisation and the emergence of a middle class.
Western Australian Premier Colin Barnett has urged African leaders not to be intimidated by global mining companies, and ensure that their citizens received a fair return for their resource exploitation.
Mining Weekly reports that speaking at a global mining conference, he said that while capital required a safe environment for investment, resource companies would always pursue resource deposits.
He also warned African leaders against subsidising the minerals industry, warning that it could be detrimental to the countries’ economies.
He said ‘‘often international companies will put pressure on small countries to provide concessions and subsidise arrangements, and those countries are not in a position to do that.’’ Instead, Barnett recommended that host countries should implement stable and predictable taxation structures to ensure resource companies were attracted to the region, while the host country could retain a fair return for its resources.
Former Kenyan prime minister Raila Odinga has called for the African continent to start deliberating an energy policy that focused on security and sustainability.
According to an Engineering News report, he said: ‘‘Although we have joined the league of oil and gas producers and we are building ever bigger power (infrastructure), energy security remains a big challenge for Africa.”
He said that domestic markets remained underdeveloped with only one out of every six energy consumers in Africa connected to the national grid.
‘‘Therefore, while there was a lot of optimism being expressed about Africa’s future in the form of the ‘Africa rising’ narrative, a lot of work still had to be done for the continent to achieve its objectives,’’ Odinga stated.
He urged countries on the continent to prioritise strategies for energy security, focusing on the physical as well as the price challenges.
Oil and gas major Woodside has called on emerging African resource nations to carefully consider implementing any policy changes that could scare away foreign investment.
Woodside CEO Peter Coleman said in an Engineering News report there were several global examples of governments changing policy in haste, resulting in resource project being delayed.
Coleman noted that resource investors were often hesitant to invest in nations where solid policies were not abundant, resulting in initial discoveries lying dormant for several years. Coleman also called on the industry participants moving into Africa to offer transparency to the countries in which they could potentially operate, and not to over promise and under deliver. — Fin24.
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