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China’s NOCs to be 4rth highest upstream investors in Africa over next 5 years

China’s NOCs to be 4rth highest upstream investors in Africa over next 5 years


Beijing, June 21 - Neftegaz.RU. China’s national oil companies (NOCs) are increasingly investing in Africa to secure oil supplies to help feed surging domestic energy demand. As a result, their development and production capex in Africa’s upstream sector is forecast to be the 4th highest between 2019 and 2023, behind global counterparts BP, Shell and Eni , according to GlobalData.

The company’s latest research reveals that the combined upstream investment in Africa from the 3 Chinese NOCs – CNPC, Sinopec and CNOOC – will be just over $15 bllion.

While domestic asset developments remain the core strategies in the near to mid-term, the 3 China’s NOCs’ investment in Africa comes in the 1st place among all overseas regions and accounts for nearly 30% of combined international upstream capex.

Cao Chai, Upstream Analyst at GlobalData, comments: “Around two-thirds of the spending is in Nigeria, Angola, Uganda and Mozambique. Sinopec and CNOOC are well established in Nigeria and Angola while CNPC has a stake in the Rovuma LNG project in Mozambique.”

Investment in Africa’s upstream sector by China’s NOCs started more than 2 decades ago. However, until the beginning of the 21st century, China’s presence was limited to Sudan, where CNPC was a major stakeholder in the Great Nile Oil Project Company.

Chai continues: “Since then, the surging domestic energy demand has led China to diversify its natural resources imports and the upstream footprint of China’s NOCs has increased substantially to nearly 20 African countries.”

Increased production volumes from Africa are expected due to the ramp up of the Egina field in Nigeria. CNOOC Nigeria holds 45% interest of Oil Mining Lease 130 block, in partnership with the Nigerian NNPC. The field, which commenced production earlier this year, is expected to reach its peak production of approximately 200,000 boed in 2019.

Chai concludes: “China’s NOCs intend to position themselves as global players in the international oil market. With CNPC and Sinopec’s new projects also coming online, the total production in Africa for the 3 companies is projected to be between 430,000 and 440,000 boed post 2020, accounting for nearly 20% of the their overseas volumes.”