Africa oil week: The transforming energy sector

By on November 3, 2014

The global energy industry is undergoing a seismic shift, in part driven by development of new, unconventional sources of energy, such as shale gas, tight oils, coal seam gas and oil sands. 

Jonathan Shortis, Vice President – Energy Sector EMEA (Europe, the Middle East and Africa): DHL Customer Solutions & Innovation, says that the need and desire to explore new geographies and develop new technologies to reach and extract unconventional gas reserves has become ever more apparent. “While growth in the conventional energy sector currently hovers around 1 to 2 percent per annum, the unconventional segment is booming.”

The BP Energy Outlook 2030 predicts that shale gas production will triple, and that tight oil production will increase more than six-fold by 2030. Unlike conventional oils though, unconventional extraction demands higher and continuous investment.

In terms of Africa’s energy sector, Shortis says that there has been significant growth in oil and gas exploration and production, on the continent in recent years. “There is no sign of Africa’s exploration activity slowing down, and the continent is expected to continue on its growth path as its attractiveness as an investment destination for the sector becomes ever more apparent due to its untapped resources and potential of new discoveries.”

He adds however that, as in many other parts of the world, the development of unconventional reserves in the region is still in its infancy. “While there is a view that reserves in areas such as North Africa (Morocco, Algeria, Libya) and South Africa are substantial, little development has taken place.”

Shortis explains that, from a supply chain perspective, both conventional and unconventional energy companies face an intriguing set of challenges. “Supply chains supporting conventional energy market, are still developing as companies have had to expand into ever more inaccessible and remote locations to support the growth in global demand. In such areas, conventional energy faces the same challenge as unconventional, and that is to establish and maintain a robust infrastructure to support production in undeveloped and/or remote geographies.”

He points to South Africa as an example. “There is interest in shale gas exploration in the Karoo, but also in off-shore developments in the Orange River Basin, Mossel Bay and the East Coast areas – accessing the largely unexplored coastline off which, many believe, large hydrocarbon fields may exist. It was also recently announced that the local Government intends to have 30 exploration wells drilled in the next 10 years. Considerable infrastructure investment will be required to allow these field exploration investments to become a production reality, together with a robust supply chain approach to help manage such a development.”

You must be logged in to post a comment Login

Leave a Reply