African Energy Chamber calls for better fiscal terms and incentives to encourage exploration

In its latest African Energy Outlook 2020, the African Energy Chamber has called for better fiscal terms and incentives to encourage exploration.

The Executive Chairman, African Energy Chamber/ CEO, Centurion Law Group, Nj Ayuk declared 2020 as a year of drilling, because of Africa’ highest exploration success rates in the world.

He in basins like the MSGBC, international explorers like Kosmos Energy has even had a 100 per cent success rate from all their exploratory drilling, he added “It is up to African governments and legislators to provide the right framework to keep attracting this kind of players ready to take risks and bet on our continent’s potential”

He revealed that, in 2020, hundreds of blocks and acreages will be up for grab across Africa, from Senegal to Nigeria to Somalia and the competition will be fierce to attract capital from a diversifying basket of explorers now coming from North America, Europe, Russia, China, India, South East Asia and the Middle East.

He disclosed that, in 2019, several African countries revised their legal and fiscal framework to incentives exploration, as new world-class discoveries were yet again made on the continent and with the signing of no less than 9 PSCs in 2019 following the passing of its brand new Hydrocarbons Code, Gabon has shown that investors are ready to keep betting on Africa providing that the right legislation and the framework is put in place.

In its Energy Outlook 2020, the Chamber notably stresses investors’ concerns over uncertain fiscal terms in sub-Saharan Africa, and calls on governments to find better ways to reconcile their expectations of short-term tax gains with the need for sustainable and long-term investment in exploration.

The importance of increasing exploration efforts cannot be underestimated in Africa as the continent is the world’s hottest exploration frontier, with several discoveries made over the past few years.