Lynda Loxton
LINKING up with Malaysian group Petronas and listing exploration arm Energy Africa have speeded up Engen’s drive into Africa.
Chief executive Rob Angel told a recent media briefing that Petronas’s 30% stake in Engen gave the South African company the financial muscle at a time of squeezed margins to venture into downstream operations in Tanzania.
Engen has invested R100-million in a state- of-the-art oil terminal in Dar es Salaam as well as several inland depots which will “open up the whole hinterland”. It also has the option on two service station networks.
Engen has been keen to get into Africa for some time and has been “putting volumes into Africa since 1990, but now for the first time there is a substantial evidence of serious investment going in there”, Angel says.
Energy Africa, meanwhile, has been successful in the N’kossa and Alba oil fields in the Congo, and wells have been drilled in the Moho field. In Angola’s Block Two, oil has been discovered and another field is being tested.
“We have a number of other areas in Angola that we are looking at,” Angel says.
In Namibia, a well was spudded some time ago in the Kudu gas field and tests are under way with high hopes that it will be commercial. Energy Africa owns 10% of the Kudu field with Shell Exploration and Production Namibia owning the balance.
It is also involved in Soekor’s Oribi oil field off Mossel Bay, which is expected to start production in early 1997.
Angel says that, overall, Energy Africa “has acreage in the right areas” where world oil industry players are increasingly focusing their attention.
“We are also a partner of choice … because we are African,” he says.
Despite these successes, Angel believes Energy Africa’s share price is undervalued “because it is not understood” despite the fact that it is a straight rand hedge share.
The company has “just blossomed” over the last few years. Many major oil companies are streaming into Africa, but “relative to our size we are at least up there with them if not a bit ahead”.
Energy Africa is currently looking at possibilities in Algeria “that would have taken longer without the Petronas connection”. The company is also “sniffing” around Libya, Angel says.