Sub-Saharan Africa: The Majors’ Next Wave of Growth

If the next wave of big-ticket projects take FID in the next 12 to 18 months however, these pre-FID projects can add up to 1.2 million boe/d at peak. Shell and ExxonMobil account for over half of pre-FID peak production.

ExxonMobil is expected to sanction Rovuma LNG in Mozambique later this year, which would be its first operated LNG project in the region. Large gas developments in Tanzania add meaningful volumes for Shell and Equinor, however, compared to neighbouring Mozambique, the country has struggled with regulatory commitment – a key risk that could have a major bearing on first gas. While Equinor is the most exposed with Block 2, its only pre-FID development in the region, bp has the weakest hopper and the lowest pre-FID growth of the group.

Delivering the pipeline will take over US$70 billion in capex, with around 70% earmarked for deepwater developments. In Namibia, TotalEnergies’ Venus and Mopane projects will consume the bulk of its regional spend. Deepwater oil carries a cost premium in the region and, with a tight global supply chain, we expect the peer group to be laser-focused on costs, delivering project synergies and compressing project cycle times. In the last decade, only a select few of the peer group have developed and brought onstream deepwater projects in SSA. Eni is the standout for compressing development cycle times - however, it comes at a cost as peak field production lags other larger projects.

While discovery to FID is not always straightforward, the fast-track development approach could be key to unlocking recent discoveries like Calao, offshore Cote d’Ivoire, Algaita in Angola and Capricornus in Namibia. Beyond the existing hopper, exploration is replenishing the Majors’ hopper. Over the next 12 to 18 months, there are estimated to be 22 E&A wells being drilled by the peer group, with the bulk occurring in the Atlantic Margin. TotalEnergies holds the highest well count, with over half targeting the Orange Basin. The peer group has also picked up 395,000 km² of net acreage in the last 18 months, more than 80% of it through reconnaissance permits, pre-licence awards and other early-stage instruments with low capital requirements. Taken together, the Majors are ideally positioned to deliver sustained, long-term value across Sub-Saharan Africa.