Africa needs to invest heavily in its infrastructure if it is to grow its oil and gas production as well as increase demand for these energy resources, Thomson Reuters head of business development for commodities and energy in Africa Michel Karera has said.

He argued that proper infrastructure could substantially cut production and transactional costs and, in turn, allow for cheaper access to these resources for African consumers.

Recent discoveries of new oil and gas reserves in countries like Uganda, Ghana, Tanzania and Mozambique had resulted in Africa’s global share of reserves growing from about 8% in 2000 to nearly 13% this year.

The continent’s total natural gas reserves were now estimated at about 74-trillion cubic metres, almost 10% of the world’s total.

New producing countries were set to redraw sub-Saharan Africa's oil and gas map over the next five years, contributing to a significant net increase in output and attracting the top global companies.

Uganda, Kenya, Ghana and Niger were among those that could see new fields producing over 100 000 bbl/d of oil by the end of the decade, while Mozambique and Tanzania were looking for gas and planning compression plants to liquefy it for shipping to Asia.

By 2018, sub-Saharan Africa could be producing an extra 400 000 bbl/d of oil, according to consultants Wood Mackenzie. That would take the sub-Saharan Africa region's total crude output to 6.6-million barrels a day.

Natural gas output was expected to top nine-billion cubic feet a day (bcf/d) by 2018 and reach 12.7 bcf/d by 2023, according to estimates.

Karera said new producing countries had the unique opportunity to grow their economies at even higher levels because of oil and gas and other natural resources, adding that the key to that growth was the development of its infrastructure.

Countries like Mozambique, Kenya and Tanzania were already among the fastest-growing economies in the world.

“There is a lot of enthusiasm about these new discoveries on the continent, but the challenge relates primarily to the issue of infrastructure for the extraction, processing, storage and moving of the resources to market.

“The massive gas discoveries made over the last three years in offshore Mozambique and Tanzania have turned the world spotlight onto these regions, which had hitherto been underexploited. There is no doubt that these discoveries mean that oil and gas are going to become a major feature in the region’s energy mix in the future. Countries with these resources need to start planning for the development of a vibrant gas and oil economy,” he noted.

However, he warned that the gross domestic product growth of these countries would not grow at the levels they were capable of, unless they moved faster to ensure they attracted sufficient investment in infrastructure.

“They need to have the ability to move and export their resources and, to do this, it will particularly require an extensive development and upgrade of road, rail, pipeline, storage and port infrastructure. Inadequate infrastructure is responsible for holding back higher economic growth,” Karera stressed.

Without adequate infrastructure, these countries would remain net importers of refined oil and gas products and would continue to struggle to meet growing fuel demand.

Further, he pointed out that the challenge was not the availability of capital to finance mine developments, but rather the ability to establish appropriate investment infrastructure models to unlock the lucrative reserves.

The appetite to invest in oil and gas infrastructure existed, but this interest was largely from foreign investors and not Africans themselves.