The drop in oil price will see development costs in Africa fall 15% this year while drilling activity will shift from exploration to appraisal. This is the conclusion of new. work by analysts at Wood Mackenzie who also believe there will be delays in several bid rounds but that terms will improve for operators in those that do go ahead and that there will be an inevitable increase in asset activity. Wood Mackenzie predicts a 30% reduction in African exploration and appraisal spending compared to 2014, as expenditure is diverted from high-risk, high-cost wildcats, to appraising discoveries, or proving up additional resources near proposed projects to deliver higher returns.
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