Tanzania and Mozambique: Top Players in Oil and Gas Market

Africa’s energy industry will see a boom in the coming years with Mozambique and Tanzania set to emerge as new gas frontiers if they get the required investment, according to PriceWaterhouseCoopers (PwC) study.

 Mozambique has the potential to be the world’s third largest producer of LNG, after Qatar and Australia, but needs to secure between US$20bn and US$25bn dollars in foreign investment, the consultancy said.

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 added.

Coordinator of PwC study Chris Bredenhann said, “Large gas finds in both African nations would make the world take note of east Africa as an emerging player in the global industry.”

PwC revealed that transactions worth around US$1bn occurred every 17 days in Africa’s oil and gas sector in 2013. However, the continent faces fierce competition for vital investment from other parts of the world, the report warned.

“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,” Bredenhann added.

Nearly nine million barrels of crude were produced every day in 2013, with more than 80 per cent coming from established players such as Nigeria, Libya, Algeria, Egypt and Angola. In gas, that was even more concentrated with nine-tenths of annual natural gas production of 1.8 trillion cubic meters coming from Nigeria, Libya, Algeria and Egypt.

Mozambique could become a major player in the Asian market on a par with Australia, USA and Papua New Guinea when it starts exporting gas expected in 2020, the PwC report noted.

Demand for oil in Africa was also expected to ‘rise significantly’ over the next 20 years, driven by population growth, urbanization and the emergence of the middle class.