Africa: Strong Scope for Offshore Licensing in 2020
Throughout 2019 Africa has led licensing round activity; looking forward to 2020 this is set to continue, however results of the recent rounds have had limited success in a global context.
Eight licensing rounds are open or have closed in Africa during the quarter and going forward 13 countries may offer acreage in 2020, said a report by GlobalData.
Toya Latham Upstream Oil & Gas Analyst at GlobalData said: “The year has held mixed fortunes for those hosting licensing rounds in Africa. Some rounds, for example Ghana’s First Licensing Round, have seen limited success, whilst others have suffered delays or suspension. Gabon’s 12th Licensing Round and Somalia’s First Offshore Licensing Round have been extended into 2020 (this is in part due to delays in enacting pivotal legislation), whilst Madagascar’s long-overdue licensing round has been suspended.”
Heading into 2020, Africa is likely to continue opening many of the upcoming opportunities. Angola will launch its 2020 Bidding Round following its 2019 round, which closed earlier this quarter. The 2019 round offered offshore frontier acreage and received bids from ENI Angola, Total Angola, and Sonangol. Several other countries, including Algeria and South Africa are also planning to launch licensing rounds once new legislation is introduced.
Latham continued: “Enacting new legislation prior to the launch of a licensing round introduces a timing-risk, which could potentially lead to delays in opening the round. Additionally, in light of recent licensing round results globally, it is likely that the terms introduced could have a significant impact on the amount of investment that is attracted.”
Meanwhile in other regions, notable activity includes the revision of India’s licensing policy for the OALP Bid Round-IV onwards; rounds IV and V are scheduled to close this quarter.
In the Americas, 11 licensing rounds are also scheduled to close this quarter, which included Brazil’s 6th Production Sharing-Pre-Salt Round. The 6th Production Sharing-Pre-Salt Round was Brazil’s final bid round of the year; the results were disappointing, awarding only one block to Petrobras.