Cape Town - The oil and gas outlook for Africa was generally positive for the next few decades, resulting in the "third scramble for Africa", but would have to be carefully nurtured, Duncan Clarke, the chairman of Global Pacific & Partners, said yesterday.
Opening the 2003 Africa Downstream conference, Clarke said many countries were undergoing major economic restructuring and could see considerably higher growth rates than in the past, while greater attention was being paid to issues such as local content and ownership.
Most oil and gas fields would continue to be concentrated in deep waters offshore and while sub-Saharan Africa would still be a far cry from a "new MidEast" for some time to come, its potential between 2004 and 2025 would be considerable, he said.
"The third scramble for Africa continues apace and involves a myriad of both domestic and outside interests," Clarke said.
Mpho Scott, a director of Caltex South Africa, outlined the importance of the black economic empowerment trend in the local oil industry.
Scott said that the adoption of an empowerment charter had seen many partnerships develop between oil majors and local entrepreneurs.
This, along with the charters being developed for other sectors of the economy, had been spurred on by the government because the market alone had not been able to move fast enough to deal with inherited economic disparities.
The reduction of these disparities were vital to ensure more robust competition in the market, faster growth and job creation, he said.
But, Scott warned, many difficulties lay ahead for both parties.
They needed more certainty in the regulatory environment in which they operated and better incentives for oil companies that adopted the charter, such as access to government tenders in a "fair and competitive environment".
Also important would be the "honest implementation of the charter by all major oil companies" and a willingness to adapt to the new economic environment.
David Sineke, an industry and research analyst at Engen Petroleum, said that among the challenges facing the African oil and gas industry were market liberalisation, weaker domestic currencies that pushed up prices.
He added that the need to comply to higher quality specifications such as the elimination of lead, and the need to identify "alternative profit opportunities", such as running franchised convenience stores alongside petrol stations.
Multinational oil companies were also expected to withdraw from some African countries that were seen to be harbouring terrorists, as had already happened in Sudan.