African Oil and GasSupply Potential

Lauren MayneEnergy Information Administration

April 17, 2009

Washington, DC

Oil and Gas Roundtable ABA Spring Conference

2

World Marketed Energy Use by Fuel Type

0

50

100

150

200

250

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Qua

drill

ion

Btu

Liquids

Natural Gas

Coal

Renewables

Nuclear

History Projections

Source: EIA, IEO2008

36%

23%

6%

8%

29%

33%

24%

8%

6%

27%

3

Africa’s Share of the World Liquids Market

Source: EIA, Oil & Gas Journal

Proved Reserves of Crude Oil, 2009

Production of Conventional Liquids, 2007

4

Country Share of Africa

Source: EIA, Oil & Gas Journal

Proved Reserves of Crude Oil, 2009

Production of Conventional Liquids, 2007

5

Conventional Liquids Production in Three Cases: Nigeria

Source: EIA

6

Events and Potential: Nigeria

• Recent Events– Attacks in deepwater

• Downside Risks– Violence in the Delta could continue and expand into deepwater

locations– Financial management at NNPC could deteriorate further

• Upside Potential– Nigerian government might implement policies that reduce

violence in the Delta

7

Conventional Liquids Production in Three Cases: Algeria

Source: EIA

8

Events and Potential: Algeria

• Recent Events– Gas discoveries and downstream projects

• Downside Risks– Government could further discourage foreign investment, as it

did with the 2006 Hydrocarbon Law– Sonatrach’s ability to invest in production maintenance and

expansion could be hindered due to competing government expenditure needs

• Upside Potential– Government could reverse nationalization tendencies expressed

in the 2006 Hydrocarbon Law

9

Conventional Liquids Production in Three Cases: Angola

Source: EIA

10

Events and Potential: Angola

• Recent Events– More discoveries of oil resources in the deepwater

• Downside Risks– Increased pressure to adhere to OPEC quotas and cuts

• Upside Potential– Possibility of sub-salt oil resources– Continued loose abidance to OPEC quotas

11

Conventional Liquids Production in Three Cases: Libya

Source: EIA

12

Events and Potential: Libya

• Recent Events– Discoveries in Area 47– Push for use of domestic workforce

• Downside Risks– New requirements to use domestic engineers could exceed

IOC’s abilities to train them and lead to progressively worst reservoir management

• Upside Potential– Transfer of skills and technologies to Libya could advance

NOC’s capabilities and encourage continued IOC & NOC partnerships

13

Conclusions

• African production is concentrated in a few key countries

• Africa has the oil resources to support future production growth

• Future production will depend largely on above ground factors, such as fiscal regimes and legislation

14

Additional Slides

• Country Sheets

15

Algeria

Downside Risks & Upside Potential• Government could further discourage foreign

investment, as it did with the 2006 Hydrocarbon Law• Sonatrach’s ability to invest in production maintenance

and expansion could be hindered due to competing government expenditure needs

• Government could reverse nationalization tendencies expressed in the 2006 Hydrocarbon Law

Index of Total Wells Drilled Annually

0

50

100

150

200

250

300

350

400

450

1996 1998 2000 2002 2004 2006

Dri

llin

g In

dex

to

199

5

$-

$10

$20

$30

$40

$50

$60

$70

$80

Do

llars

per

Bar

rel

Onshore Drilling Total Drilling WTI Price

Source: I.H.S. Energy, 2007

Expected Production

0

1

2

3

4

5

6

7

8

9

10

11

12

13

2006 2015 2030

Mill

ion

Bar

rels

per

Day

Source: EIA, AEO2009

2008 Oil Production by Company

0100200

300400500600

700800900

Th

ou

san

d B

arre

ls p

er d

ay

Source: Wood Mackenzie, Pathf inder 2009

Domestic NOC

IOC

Foreign NOC

16

Nigeria

Downside Risks & Upside Potential• Violence in the Delta could continue and expand into

deepwater locations• Financial management at NNPC could deteriorate

further

• Nigerian government might implement policies that reduce violence in the Delta

Index of Total Wells Drilled Annually

0

50

100

150

200

250

300

350

1996 1998 2000 2002 2004 2006

Dri

llin

g In

dex

to

199

5

$-

$10

$20

$30

$40

$50

$60

$70

$80

Do

llars

per

Bar

rel

Onshore Drilling Offshore DrillingTotal Drilling WTI Price

Source: I.H.S. Energy, 2007

Expected Production

0

1

2

3

4

5

6

7

8

9

10

11

12

13

2006 2015 2030

Mill

ion

Bar

rels

per

Day

Source: EIA, AEO2009

2008 Oil Production by Company

0100200300400500600700800900

1000

Th

ou

san

d B

arre

ls p

er d

ay

Source: Wood Mackenzie, Pathf inder 2009

Domestic NOC

IOCForeign NOC