Oil and Gas businesses in Africa need to intensify exploration efforts to guarantee reserve replacement and enhanced capacity to meet growing demand and global competition, the Managing Director, Asharami Energy (A Sahara Group Upstream Company), Olajumoke Ajayi, told participants at the Oil and Gas Council’s Africa Assembly in Paris.
According to a statement, Ajayi noted that Africa’s large volumes of undiscovered oil and gas make the continent a veritable frontier for investment, adding that operators need to adopt new technology, explore alternative cost saving measures, ensure sustainable community relations, and build diverse multidisciplinary teams to ensure successful exploration projects.
In her presentation, “Renewing Players Commitment to Exploration and the Importance of Community Engagement in Capital Intensive Projects”, she cited the downturn in global oil prices and the corresponding negative effect on investor funds and returns as factors that had made a good number of Exploration and Production (E&P) companies in Africa cut down on investments, delay Final Investment Decision (FID) or totally stop embarking on new capital projects.
“Consequently, producing companies continue to pump oil from operated mature fields thereby depleting existing reserves with non-corresponding efforts for reserve replacement via new exploration discoveries. The big question remains whether or not E&P players should commit to exploration and how players can justify this commitment in the face of lower oil prices,” she stated.
According to Ajayi, the compelling case for the relevance of hydrocarbons in the future, in addition to huge investments on new technology, responsible and intentional community engagement will play a significant role in creating a stable and conducive environment for exploration and production. “Sahara Group’s exploration success story is being driven by a combination of technology, innovation and community management expertise. At Sahara, we are intentionally committed to creating a sustainable balance between our projects and host communities to ensure the creation of shared value for all stakeholders.”