Egypt is now putting its troubles behind it and is advancing its petrochemicals development which should ensure self sufficiency, but the country remains plagued by the energy crisis. Gas shortages are also causing a problem for the petrochemical market and the wider economy. Egypt needs approximately 500 000 tpy of ethylene in order to sustain downstream production, but in 2014 local production was well below this level. This has hindered growth in output as well as delayed the completion of projects.
There is reportedly growing confidence that operators have proven sufficient amounts of gas to support large LNG export projects. However, BMI has said that there are many factors which could challenge the country as it moves from exploration to production. The timing of first LNG from Mozambique is difficult to pin point, however it is expected that the country will make its presence felt in the LNG market by 2020.
There is no refining capacity in the country but there is, according to BMI an upside risk to fuels production from two proposed GTL plants, one by Shell and ENH, the other by Eni, Sasol and ENH. These could allow the country to become a net fuels exporter by 2023, however the falling oil prices over the past months and going forward will reduce the commercial attractiveness of such ventures.
It has been said by BMI that development of a more stable and transparent fiscal and regulatory regime will increase in importance, as lower crude oil prices see major oil companies claw back on exploration and development spending around the world. Falling LNG prices and a looser market will also put downside pressure on the Tanzania LNG project.
Domestic oil and gas consumption in Tanzania is relatively limited but consumption is set to rise to 2023, supported by an expanding population and economic development. Oil consumption does continue to outstrip gas, however development of the country’s substantial gas resources could tip the balance, as the power sector reorients. BMI believes that the development of the Tanzanian downstream sector will remain heavily constrained by a small domestic market, low level of infrastructure, poor regional connectivity and domestic fuel price caps.
BMI has said that a resolution to the refinery dispute, along with the signing of a Memorandum of Understanding with oil companies and the award of CNC’s Kingfisher production license are finally paving the way for the country to become an oil producer. BMI does however forecast first oil in Uganda for 2020, a year behind past estimates.
Uganda’s refined fuels consumption is expected to pick up speed by the end of 2023 as the country begins to refine domestically produced crude. BMI anticipate oil consumption to ramp up in the transport sector, and notably the power sector as Uganda attempts to boost generation and reduce its dependence on unreliable hydroelectric power generation. The country, according to BMI, is set to become a crude oil net exporter with first domestic crude production. By 2023, BMI expects crude oil exports of approximately 70 000 bpd, but exports of refined fuels will remain small due to rising domestic consumption.
Edited from report briefs by Claira Lloyd