African explorers need to rethink oil and gas capex – PwC

Oil and gas explorers have to rethink their capital expenditure (capex) budgets on exploration activity across the African continent in the wake of the significant drop in the global oil price, advisory firm PwC said on Tuesday. “Oil and gas explorers will be relooking at their budgets and deciding where to allocate their limited capital spend given the substantial decline in the oil price. Overall, low oil prices could have an impact on production, undermining certain players in the market,” PwC Africa oil and gas advisory leader Chris Bredenhann warned. Crude oil prices had dropped to record lows near $50/bl early this year, owing to an oversupply in the market. According to PwC’s ‘Fit for $50 oil in Africa’ analysis, Africa had seen substantial successes in the exploration for hydrocarbons over the last decade, including the entry of new country players in East Africa joining the ranks of their West African neighbours.