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PwC, an international business consultancy, singled out Tanzania and other countries namely Kenya and South Africa as having taken a serious look at legislation currently in place with a view to making it more investor-friendly writes TIMOTHY KITUNDU.
Chris Bredenhann, PwC Africa Oil and Gas Advisory Leader said overall, activity in the oil and gas industry across the African continent has slowed in the wake of the declining oil prices in late 2014.
This has caused activity to drop, and also served as a wake-up call to many African governments.
Bredenhann said such countries are the ones which are working hard to pass favourable oil and gas legislation in order to attract investment into the sector.
PwC’s ‘Africa Oil & Gas review 2015’ analyses what has happened in the last 12 months.
As oil prices declined in 2014, the industry response has been far-reaching with significant reduction in headcount and other cost cutting measures.
Capital budgets have also been cut and frontier exploration activity has decreased.
“While response to such a drastic decline is necessary, we have seen the most successful organizations are taking time to re-set, re-strategize and plan for the upturn in prices, which will inevitably come,” Bredenhann said.
As at the end of 2014, Africa has proven natural gas reserves of just under 500 trillion cubic feet (Tcf) with 90% of the continent’s annual natural gas production still coming from Nigeria, Libya, Algeria and Egypt.
The main challenges identified by organizations in the oil and gas industry have remained largely unchanged with the top three issues of uncertain regulatory framework, corruption and poor physical infrastructure also identified as the biggest challenges in 2014.
Uncertain regulatory frameworks remain a concern across the industry, with more than 80% of Tanzanian respondents regarding regulatory uncertainty as the top challenge facing the business.