Scottish North Sea oil experts urged to seek a future in Africa where production is cheaper
'Within the next couple of years, they think the market will once again swing from glut to shortage'
Scottish oil companies that are struggling in the North Sea are being urged to look to Africa to secure their future, The Times in London, reports today
The suggestion comes as the first Scotland Africa Oil & Gas Forum brings senior government officials from the continent to Aberdeen today. Komi Sélom Klassou, prime minister of Togo, is being joined by energy ministers from Senegal, Ivory Coast and Congo (Brazzaville). Paul Wheelhouse, Scotland’s minister for business, innovation and energy, will attend the event.
While African oil and gas typically has been focused on the likes of Egypt, Algeria, Angola and Nigeria, new frontiers are opening up. Last year Africa was home to eight of the top 20 oil and gas discoveries and it is on course for a similar performance this year.Scotland, which is part of the UK, faces a difficult economic time as low oil prices have made its North Sea Oil too expensive but while its future is uncertain, The Economist saw positives for some parts of the world, including Africa.In an article published today, titled 'When oil is no longer in demand - a glimpse of a post oil era', it argues that high-cost oil regions like Scotland’s North Sea, Canada’s oil sands and the Russian Arctic may be in trouble."But expect at least one more oil boom, born from the ashes of today’s bust, because there has been so little investment in the past two years to open up new sources of supply. Within the next couple of years, they think the market will once again swing from glut to shortage. "The biggest beneficiaries will be producers in places with low-cost, abundant oil such as the Middle East, America’s Permian basin, Brazil’s pre-salt fields and parts of west Africa. But although those regions may see a boom in investment."Urging Scotland to turn to Africa is backed by the UK's government the UK a global competence in all aspects of exploration and production. British High Commissioner, Nic Hailey, speaking at the 4th East Africa oil and gas summit said: "The Oil and Gas industry supports over 375,000 jobs in the UK. The top 2 UK firms listed by market capitalisation are in the extractives industry (Royal Dutch Shell and BP), and there is a wealth of UK companies leading the way in designing, financing and implementing oil and gas construction projects across the world."The marine and subsea market alone is worth roughly $25 billion worldwide, with the UK accounting for almost half of that. British companies are also leading on wider oil-related infrastructure. 70 per cent of current subsea infrastructure design is engineered in Scotland.
Hailey said: :British companies are working in this region to bring the investment, skills and knowledge which will help to drive the sector’s growth. Tullow Oil of course is a major player here in Kenya, and also very active in Uganda where they are one of 3 main operators.
"Other companies such as BG Group and Ophir Energy are leaders in offshore gas exploration and have a presence in the region. These companies are committed to adding value into the East African economy, building local expertise and creating jobs."
On a government level, the UK – with support from Germany – has designed the Skills for Oil and Gas Africa programme to maximise local employment in the regional oil and gas sector. The programme focuses on Kenya, Uganda, Tanzania and Mozambique, working closely with the private sector and government to equip local populations with the skills needed to seize job opportunities in the sector. The Five-year project is expected to help around 32,000 local people find sustainable jobs, with a contribution of £25m from UK Aid.