Focus on Africa's oil & gas downstream potential

Africa's oil and gas sector has been abuzz with activity following significant discoveries in countries such as Uganda, Kenya, and Tanzania. With billions of barrels in reserves being unearthed in the region, there has been a notable rush towards the upstream segment, leaving gaps in the historically competitive downstream sector. This shift has raised concerns and highlighted the need to understand the challenges and opportunities present in Africa's downstream oil and gas market. Grant Henderson, Director at DLA Piper Africa Group, sheds light on the intricacies of the downstream arena in an exclusive interview with CNBC Africa. He emphasizes the evolving dynamics in the industry, attributing the shift in focus to the majors' continued prioritization of upstream opportunities. As the majors pivot towards upstream activities, independent players, traders, and similar entities are stepping in to fill the gaps left in the downstream and midstream markets. One of the key drivers of this transition is the changing landscape of oil and gas discoveries in Africa. Countries like Uganda, Kenya, and Tanzania are witnessing a surge in exploration activities, leading to new opportunities for players across the value chain. Henderson underscores the importance of supporting clients not only in traditional upstream regions like Nigeria and Angola but also in emerging markets where recent discoveries have been made. The conversation then delves into the impact of fluctuating crude prices on the African oil and gas sector. Henderson addresses the liquidity pressures and currency devaluations experienced by countries due to the volatility in oil prices. He offers insights from a legal perspective, suggesting that governments and central banks should consider measures such as providing foreign exchange to importers of refined oil products. By allowing for some degree of deregulation and market-driven pricing, these entities can alleviate currency challenges and ensure the stability of their economies. Moreover, the interview touches upon the legal implications faced by oil and gas companies in Africa. Henderson acknowledges the significance of holding all entities accountable, regardless of their size or stature. He outlines DLA Piper's strategy of assisting clients in navigating legal issues and fostering development opportunities in key sectors like oil and gas, power, renewables, and healthcare. In conclusion, Grant Henderson's insights underscore the complexities and opportunities in Africa's downstream oil and gas sector. As the industry continues to evolve, stakeholders must adapt to changing market dynamics, regulatory landscapes, and global economic trends to unlock the full potential of the continent's energy resources. By addressing key challenges and leveraging emerging opportunities, Africa can carve a sustainable path towards maximizing its oil and gas downstream potential.