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Africa news roundup

Africa's oil and gas potential has grown significantly in recent years. In 2013, six of the world's ten biggest oil and gas discoveries were made in Africa, while African nations produced almost nine million barrels of oil a day throughout that year. 

The last month has seen a number of major developments affecting Africa's oil and gas industry; read on for our roundup of the most important stories.

South Africa poised to approve shale regulations

Energy giants are waiting on the approval of shale gas regulations by the South African government.

The likes of Royal Dutch Shell and Falcon Oil & Gas are ready to push on with exploration work in the semi-desert Karoo region, which is estimated to hold as much as 119 trillion cubic metres of shale gas.

Shell applied for an exploration licence covering more than 9.5 million hectares of the Karoo Basin, although the company announced in March that it was scaling down its plans. Falcon Oil and Gas - in partnership with Chevron - and Bundu Gas have also applied for licences.

The proposed shale gas regulations went before South Africa's cabinet in May and are due to be published in the government gazette this month, according to mineral resources Minister Ngoako Ramatlhodi.

Thibedi Ramontja, director general of the Department of Mineral Resources, explained companies would have to consult with local communities and carry out environmental impact assessments before beginning drilling.

He predicted that exploration work would take around three years, helping to determine the size of the gas reserves and the economic viability of extracting them.

Littoral and Paternoster to collaborate on North Africa oil development

Paternoster Resources and Littoral Oil and Gas have shaken hands on a deal to jointly evaluate, acquire and develop oil opportunities in North Africa.

Initially concentrating on Algeria, the partners will concentrate on securing assets in known hydrocarbon-producing basins through a new company called Atlas Oil and Gas. It will be 90 per cent controlled by Paternoster, with Littoral holding the remaining ten per cent.

Littoral has spent the past year evaluating subsurface data in the areas that Atlas will search, leading to the selection of Algeria as the first area of focus. The country was chosen thanks to its political stability, excellent infrastructure and beneficial contract terms.

Emphasis will be placed on keeping production costs down by leveraging technology, speeding up the production path and boosting revenues.

The partners expect to spend little money on assessing the attractiveness of an asset before deciding whether or not to make an investment, with Paternoster predicting it will be able to fund the venture through existing resources.

OneSubsea wins $330m North Africa offshore production systems deal

Reservoir recovery company OneSubsea has been handed a $330 million contract to deliver subsea production systems for a North African offshore gas project.

The 13-well development requires a range of subsea production equipment, tools, and installation and commissioning services.

Jack Moore, chairman and chief executive of Cameron and Schlumberger, the company that owns OneSubsea, said: "The award represents phase two of this development and is the largest award for a subsea production system within the North Africa region to date.

"Having already supplied the first phase of this development, OneSubsea now looks forward to progressing with this second phase."

Shell-BG deal could put Tanzania at forefront of East Africa LNG exports

The $70 billion takeover of BG Group by Royal Dutch Shell could see Tanzania become the biggest exporter in East Africa's liquefied natural gas (LNG) market.

The merger could see the country leap ahead of Mozambique, which may become the world's third biggest producer of LNG - after Qatar and Australia - as a result of recent discoveries.

Dolapo Oni, head of energy research for Ecobank Group, pointed out that Shell has "strong expertise in working with governments and has also displayed strong appetite for risk, deploying new technologies and making cuts when necessary", reports Bloomberg.

"These attributes could benefit the Tanzania LNG project and give Mozambique much-needed competition for the limited investment dollars available globally for these sort of projects," he added.

Former Cove chief executive John Craven predicted that the potential arrival of Shell in East Africa should be a benefit to the region.

However, he cautioned: "The main challenge that I think they face is the gas is kind of scattered up the coast; it's not consolidated in one area."

$80 might be right price for oil, says Angola

Angola's petroleum minister Jose Maria Botelho de Vasconcelos says $80 per barrel may be the correct price for oil.

Speaking in the lead-up to a key production meeting in Vienna, he pointed out that Angola has suffered significantly from the global drop in oil prices, with the Opec member state deriving 98 per cent of revenues from oil.

"The right price is [decided by] the market. $70, $80? $80 might be a right price," he told AFP.

Opec, which comprises members from across Africa, Latin America and the Middle East, decided to maintain output levels at 30 million barrels per day at the production meeting, leading to prices climbing by a modest 0.6 per cent.

During the summit, Opec urged its members to adhere to the production ceiling. Qatar's minister of energy and industry noted: "We have witnessed much volatility in the global oil industry".

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