African nations to boost oil and gas developments in 2014


Source: Energy Institute (EI)

A number of African nations are looking to introduce new legislation in 2014 that will help them to boost oil and gas production over the coming years. South Africa, Mozambique, Kenya and Tanzania are among the countries that are drafting laws that will allow them to have more sway in the energy sector, the Wall Street Journal reports.
The legal changes are expected to include possible tax rate rises, offering state-backed oil companies automatic equity stakes in new projects and jobs targets that firms will legally be required to meet.

This move comes as African governments are under increasing public pressure to safeguard wealth associated with oil and gas production. The continent accounts for 7% of global gas reserves and 8% of oil reserves - and both are lucrative earners.

Mark Rosenberg, an analyst at consultancy Eurasia Group, explained: 'There is more competition now and governments are more accountable to their people. There is a heightened sensitivity to getting more out of the resource sector for the country itself.'

In South Africa and other nations on the continent, more and more members of the public are calling on their governments to nationalise mines and depend less heavily on foreign direct investment - a figure which totals $30bn (£18.10bn) annually, according to PwC.

South Africa's minister of mineral resources Susan Shabangu also said the government there wants to have at least a 20% stake in new oil and gas projects in the country, with the option to purchase a further 30% at a fair market price.

In Mozambique, the country's state oil company Empresa Nacional de Hidrocarbonetos already claims a 15% stake in major projects, but like South Africa, is looking to increase its foothold over 2014.

Tanzania has already set about changing its natural gas legislation and last autumn the country's government passed a policy that puts focusing on domestic energy needs ahead of exports. This strategy is expected to continue over the coming years.

Oil and gas developments in Africa and future growth scenarios for the global energy outlook will be discussed extensively during this year's IP Week programme. 

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