African continent is endowed with vast natural resources including oil and gas deposits, which are expected to increase upstream investment. Based on this, the mature and emerging hydrocarbons hubs will continue to embark on strategies such as licensing rounds to accelerate exploration and development of petroleum blocks so as to jumpstart socioeconomic growth and sustainable development on the continent.
South Sudan, Kenya and Democratic Republic of Congo are some of African countries that have planned their oil and gas licensing rounds. In 2021, South Sudan’s Ministry of Petroleum launched first-ever licensing round for oil and gas exploration blocks. This came after Ministry of Petroleum (MoP) identified new exploration blocks with potential hydrocarbons and has compiled data to provide to interested investors & operators. The area of blocks ranges from 4,000 to 25,000 sq km. According to analysis commissioned by MoP, some 90% of South Sudan’s oil and gas reserves remain unexplored. Three consortiums currently operate producing petroleum blocks in the Republic of South Sudan. Moreover, four oil exploration companies have also acquired Production Sharing Contracts (PSCs).
In the first part of South Sudan’s Oil and Gas Licensing Round held in 2021, five blocks (A2, A5, B1, B4 & D2) were ready for licensing and additional nine blocks were being prepared for other licensing rounds. The second part of licensing round consists of Blocks (A1, A6, C2, D1 & E2). South Sudan announced licensing round for its 14 onshore blocks and opening is expected to kick off this year and end in 2023. In addition to provision of licenses, the country has established geological data centre, and acquired geophysical planes to generate geophysical aerial data and conduct surveys of oil and mineral deposits in the country. The geological and seismic investigation aircraft will be used to acquire new data over large areas without harming the environment through aerial surveys and mapping thus, advancing exploration, development and production of hydrocarbons resources in the country.
Kenya discovered its first oil in 2012 via Ngamia-1 well which was drilled by Tullow. The proven oil reserves are estimated to be 750 mmb based on number of wells that were drilled in the basin. Moreover, the country has gradually been moving closer to full production of crude oil from the fields in Lokichar Basin. In addition to this, the country has 63 blocks of which 26 blocks are held by international companies, and 35 blocks are open for bidding. The Kenyan government is yet to announce plans to conduct its official licensing round for 35 blocks but it is expected that licensing round may kick off in 2023.
In May 2022, Democratic Republic of Congo (DRC) launched its Petroleum Licensing Round for exploration in 16 Oil Blocks. Crude oil reserves & natural gas reserves of DRC are estimated to be five billion barrels & 30 billion cubic meters respectively. In addition to this, the country has over 180 million barrels of proven oil reserves. The country planned to hold an auction for its 16 exploration blocks (3 offshore blocks &13 onshore blocks) in the third quarter of 2022.
In 2020, Uganda’s Ministry of Energy and Mineral Resources launched the country’s second bid licensing round with five blocks on offer. The winners are yet to be announced and four firms were shortlisted in 2021 such as TotalEnergies E&P, DGR Global, PetrolAfrik Energy Resources, Uganda National Oil Company Limited (UNOC). According to H.E Ruth Nankabirwa, Uganda’s Minister of Energy and Mineral Development, Uganda will launch its third petroleum licensing round in 2023 as part of its effort to accelerate exploration and production. Uganda has approximately 6.5 billion barrels of proven oil reserves, of which 2.2 billion is recoverable, and 500 billion standard cubic feet of gas reserves hence the East African country will be one of emerging hydrocarbon and energy hubs in Africa. The announcement of Uganda’s third licensing round follows a final investment decision that was made in February 2022, on Lake Albert Development which comprises East African Crude Oil Pipeline, Tilenga and Kingfisher upstream oil projects.
Somalia is one of African countries with blocks that are open for bidding. For instance, Somalia Petroleum Authority launched first-ever licensing round for offshore blocks with seven blocks on offer in May 2020. The initial deadline was set for March 2021 but extension was announced with final deadline to be confirmed. Finally, in April 2022, the Petroleum Institute of Mozambique announced pre-qualifying results of the country’s sixth licensing round launched in November 2021. With sixteen offshore blocks that are open for bidding, twelve international companies have been selected to bid.