Despite low oil prices, this year’s Offshore Technology Conference (OTC), which took place on May 4th–7th in Houston, was the largest show in the conferences’ 47-year history. As the leading forum for the offshore oil and gas industry, there were strong signs of a resilient industry despite some tremendous challenges. However, even more interesting was that over 40% of the exhibitors were international companies, representing 37 countries and attendees came from over 130 countries, including large delegations of companies from many African and Middle East countries led by the U.S. Commercial Service as part of their International Buyer Program (IBP).
The focus for many of the U.S. companies attending was on how to expand into international markets. ISI Consultants attended the conference and had meetings with over 40 U.S. companies who were looking to expand their operations or sales and marketing into Middle East and African markets. ISI’s Client Service Director, Ian Oliver, commented “Many of the companies we spoke to were aware of the opportunities available in Middle East markets which have long been a focus of the energy industry. But, it was refreshing to see how many companies were looking at the African continent as an area of potential growth for their business. While a lot of U.S. companies are still unsure about how to enter into or maneuver within the African markets, at least they are beginning to realize the opportunities that they have been allowing their foreign competition to pursue unchallenged”.
African proven onshore oil reserves stand at around 124bn barrels, with another 100bn estimated offshore, while its proven reserves of natural gas amounts to around 509tn cubic feet. Recent discoveries highlight the significant upwards potential of these figures; South Africa alone is home to the 8th largest technically recoverable shale gas resources in the world.
While oil and gas projects in Africa are not immune to the depressed market prices, many companies are using this an opportunity to reset and reinvest in projects to make them more commercially viable in today’s climate. In particular, investments in technology and infrastructure are being used to optimize operations to enhance production and that is good for many suppliers to the industry.
The price depression has also incentivized African governments to think about ways they can make their investment climates more competitive and attractive to foreign companies. A good example can be found in Mozambique where a recently enacted law ensures companies can recover their initial investment on projects before the government can seek to increase its revenues.
In short, for U.S. companies in the offshore technology sector, there are still some bright spots and some great opportunities to be found internationally, particularly for those willing to explore markets in Africa.
ISI Consultants assists U.S. companies to enter or further expand their business in Middle East and African markets. From small projects to longer-term engagements, we put our knowledge and experience to work for you, saving you time and money and minimizing your risk. And our results-oriented approach means we don’t just advise you on what to do to be successful – we work with you to get it done.
As part of our commitment to the National Export Initiative (NEI), ISI Consultants offer a limited number of COMPLIMENTARY STRATEGY SESSIONS each month to qualified U.S. companies.