In the first part of our analysis, we will give an overview at Hydrocarbons Reserves over the African continent with a closer look at gas reserves and production. African gas reserves have grown strongly over the past years to reach up to 450 Tcf in 2003. Further potential exist and we expect that gas reserves will further increase in the two major regions of sub-sahara and northern Africa.
Then, we shall focus on gas production and investigate why the total gas production is low compared to current proven reserves, specially in the sub-sahara region. If the lack of significant domestic consumption is a significant factor, others such as regional connection, distance from major markets, fiscal and legal framework and political context, must be taken into account.
In the third and final part of this paper we will give an overview on the actual development and utilisation of gas. We shall try to assess the place of Africa in the future Atlantic and Mediterranean market focusing on development of infrastructure between northern Africa and Europe and the future role of LNG. LNG trade is thriving on the emergence of several new suppliers and customers, with a rapid growth in the number of both liquefaction and LNG receiving facilities. Africa is already playing a major role in today's picture with the fastest developing LNG plant in Nigeria and new grassroots project around the Gulf of Guinea and in Northern Africa. We shall attempt to analyse the strength and weaknesses of these projects and investigate how to best utilize the current market evolutions to valorise the huge proven resources of the continent.
According to Total's estimate, African gas reserves have grown regularly over the past decade to reach a total of 450 Tcf. Five countries - Algeria, Angola, Egypt, Libya and Nigeria - account for 94 % of reserves. It should be noted, however, that among the countries holding the remaining 6%, nine have reserves of more than 1 Tcf.
Not surprisingly, the five major actors cited above also produce 94 % of the gas. What is more significant is that of the volume made available to the markets, about half is consumed locally and the other half is exported. This reflects two factors:
A favourable geographical location at the doorstep of Europe and North America.
An environment which can be improved to promote the growth of domestic consumption.
It is also worth noting that of the five major African producers, those with a long history of gas exporting have also developed a significant local market. So export activity and local consumption are complementary; we believe that developing export-oriented projects will in turn help boost gas consumption within Africa, and vice versa.
The areas that could be made more conducive to local domestic gas developments are:
A legal and fiscal framework that recognises the specific nature of gas projects;
In some cases, the development of domestic gas transmission systems.
Regional integration, which is sometimes dependent on the settlement of borders;
