Brazil’s Petrobras and partners produced their billionth barrel of oil from presalt fields this month. Underlining one of the biggest shifts to happen this decade in global crude output.
And news yesterday suggests we may be about to see another mega-shift in energy. In the worldwide natural gas business.
That was a deal struck by petro-major BP. Which is spending nearly a billion dollars to get into projects in an unexpected part of the world: western Africa.
BP said it has reached an agreement to buy stakes in development projects in Senegal and Mauritania. Which the major is acquiring from junior developer Kosmos Energy, in exchange for $162 million cash — and subsequent payment of $754 million in appraisal and development expenses.
That’s a big outlay for BP. But the prize on the western African licenses is commensurate — with Kosmos’ recently-discovered Tortue field in Mauritania holding a currently-estimated 15 trillion cubic feet of natural gas.
In fact, BP said it believes the complete acreage acquired under this deal could hold up to 50 trillion cubic feet. And those big numbers have the major eying the region as the world’s newest center for natural gas development.
BP’s chief executive officer Bob Dudley summed up these ambitions succinctly. Saying the company is looking to “create a new LNG hub in Africa.” One which he noted will be supported by low production costs and “advantaged access” to global gas markets.
Indeed, as the map below shows, Mauritania is well-located for shipping LNG to key markets in South America and Europe. Markets that are distant from much of the Asia-focused LNG production building taking place in countries like Papua New Guinea and Australia.
Mauritania (red peg) is located close to LNG consumers in Europe and South America
BP’s Billion-Dollar Deal
BP may thus be pioneering a “new world order” for natural gas. Zeroing in on new markets at a time when much of the focus has shifted to Asia.
That could be very good news for the West Africa energy complex. Helping to spur infrastructure development and investor confidence here. Watch for results from BP’s development drilling planned for 2017, and for further news on timing of development plans in this critical area.
Here’s to seeing the future,
Article by Pierce Points