The sagging of Global oil prices have lead to a larger drop in Africa’s share of global oil production from 10.1% to 9.6% of the world’s total in the last year, a multinational professional services network, PWC has indicated in latest research .
In a report titled: From Fragile to Agile, Africa Oil and gas review 2015, PWC indicates that Africa’s untapped proven oil reserves on the are estimated to be around 8% of the global total, which is nearly the same as the previous year, and these reserves are projected to increase as appraisal of new discoveries ensues.
The organisation notes that global oil prices have also led to a fall in new discoveries in the continent which is in a whole a global spill over.
“It has become more difficult for companies to find foreign investment as many investors who have been holding onto oil & gas sector shares over the last year are feeling some pain with stocks down, in many cases as much as 30%” notes the report in part.
However, the report posts optimism that although the whole sector is trading below historical valuation levels and with the oil price and forecast oil price starting to rise, investment could start to flow once again from industry investors who believe these stocks offer a good opportunity for significant rewards in the future.
PWC has urged African governments to promulgate and ratify oil & gas regulations, encourage the monetization of assets and eliminate policy uncertainties and overly restrictive legislation so as to achieve a viable value chain system if the success of the industry is to be realized.
Corruption in the industry
Over 98% of organisations sampled by PWC indicated that they have an anti-fraud and anti-corruption programme in place – of these, more than 60% believe that the programme is very effective at preventing and/or detecting fraud. Only 8% of respondents indicated that they did not have a compliance programme.
Over 43% of respondents indicated that fraud and corruption would have a severe effect on their businesses. Government officials continue to be implicated in a number of fraudulent activities across the continent.
Recent research conducted by PwC shows that bribery and procurement fraud remain some of the top types of economic crimes in the broader energy, mining and utilities sectors. Despite pervasive fraud, some governments around the continent have made significant efforts to increase transparency in the industry.
Read the report in detail