HOUSTON, Texas — Oil companies are starting to prefer taking on the technology challenges of sub-Saharan Africa over the political risks in North Africa and the Middle East, even if oil is easier to find in those areas, an international energy executive said told a Houston audience Monday.
“The oil is pretty accessible and cheap in North Africa,” said Thierry Pilenko, CEO of Technip, a French-based engineering and project management company for the energy industry. “The problem is the instability. Some companies don’t want to operate in these countries.”
Pilenko briefed a group of journalists during a visit to Technip’s facilities in Houston.
Technip operates in more than 40 countries around the world and has enjoyed especially strong growth in North America, driven by unconventional drilling, Pilenko said.
Energy boom: ‘Incredible increase’ in oil, gas in East Africa
The shift away from the Middle East has been notable, Pilenko said.
Pilenko said that Technip does not operate in Iraq or Syria because of political instability, and because its customers are showing little interest in working therel.
“They have to go where the oil recovery is more complex such as East Africa,” Pilenko said. “We have a presence in Egypt, but some of the projects are being postponed because the political situation is challenging.”
New plays — technically difficult but with high potential payoffs — are cropping up in countries including Uganda, Kenya, and Ethiopia.
“East Africa used to be almost dead from an oil and gas perspective,” Pilenko said, “but the players that have discovered these reserves are serious players with the capacity to develop those fields.”
Technip, is aiming to use its expertise to build production facilities for these complex African reservoirs, Pilenko said.
For example, Technip has developed specialized flexible pipe that can handle the corrosive chemicals found in presalt plays — deep reservoirs under layers of salt in regions including Angola on the continent’s west coast.
And it won a contract in August to build the subsea system for the Moho Nord field in offshore Congo for the French oil company Total. The project, which will require150 miles of pipelines and 50 subsea structures, is the company’s largest ever, Pilenko said.
“These are areas where we see new challenges going forward,” Pilenko said.