North Africa is the key region in Africa’s overall oil and gas sector. Indeed, North Africa has played a major role in the development of the global oil industry as it stands today. North Africa possesses massive oil and gas reserves, viewed as strategically vital because of their proximity to European consumers across the Mediterranean Sea. North Africa continues to be a leader in oil and gas production and exports. The local crudes and condensates also are desirable to refiners because they tend to be lighter and lower in sulfur than their Middle Eastern counterparts. Algeria and Egypt (and to a lesser extent Libya) are significant exporters of LNG, chiefly to European consumers, but also shipping cargoes to the Americas and to a variety of Asian customers. The continued strength in oil and gas prices have given a boost to exploration and development activities in Northern Africa, though the current economic downturn and decline in global oil demand has pushed back some plans.
Resources and production
Libyan oil reserves account for nearly three quarters of North Africa’s total, at approximately 43.7 billion bbls. Algerian reserves also are considerable at 12.2 billion bbls. For the five countries, total oil reserves are nearly 60 billion bbls, slightly more than half of total African oil reserves.
In terms of natural gas reserves, Algeria, Libya and Egypt once again contain the majority of the regional resource, except that Algeria is the main site of the reserves. Algeria is the eighth largest country worldwide in terms of proven gas reserves. Proved gas reserves have grown significantly over the past decade, with the most significant new finds in Egypt. Egypt joined the ranks of LNG exporters in 2005. In 1980, North African natural gas reserves were estimated at 4.49 trillion m3, 83% of which was located in Algeria.
By 2008, total gas reserves had climbed to 8.21 trillion m3, but Algeria’s share had fallen to 55%, and Egyptian reserves had surpassed Libyan reserves. Algeria still possesses the majority of the gas resource at around 159 trillion ft3, followed by Egypt with 58.5 trillion ft3 and Libya at 54.38 trillion ft3. Libya’s reserves have grown following the lifting of US sanctions in 2004 and the high global energy prices in recent years. The Libyan National Oil and Gas Company (NOC) believes that the country will be able to double its natural gas reserves to around 100 trillion ft3. As was the case with oil reserves, Tunisian and Moroccan reserves are minuscule in the context of their North African neighbours.
Facing the future
The upstream sector receives the bulk of the attention, with numerous oil and gas development projects underway and/or planned. The region’s refining industry also has evolved under interesting historical circumstances, and progress continues to be made. All five North African countries operate refineries, but most of them are technologically unsophisticated. There is a growing emphasis on updating antiquated refinery equipment and investing in technology that will allow the refining companies to improve fuel quality and yields, both for domestic and export markets. Although the economic climate is difficult and many refinery projects around the world have been scaled back, postponed, or cancelled entirely, a number of North African projects are underway or firmly planned. As the global economy continues to recover, it would not be surprising to see additional plans announced in North Africa.
Nancy Yamaguchi, Hydrocarbon Engineering Contributing Editor