Independent oil producers remained optimistic about the prospects for oil production and the further development of oil and gas resources in Africa despite many challenges confronting the industry, including the global economic crisis, reduced cash flows, geopolitical pressures and a volatile prices.

Addressing delegates attending the sixteenth African Oil Week in Cape Town on Tuesday, Global Pacific and Partners chairperson Duncan Clarke stated that Africa was still at the frontier of the global oil industry and many opportunities remained to be exploited.

Africa, which had an oil reserve of 120-billion barrels and a gas reserve of 500-trillion cubic feet, still had significant potential for oil and gas extraction.

"In particular, there is significant opportunity in the sedimentary basin, which still needs to be exploited," Clarke elaborated. Consequently, Africa would continue to be of interest to oil producers.

Currently, 550 independent oil companies were operational in Africa, either through exploration or production operations. Clarke believed that this number would increase significantly over the next few years, when 800 independent oil companies would be operating in Africa by 2015.

Clarke also laid out his ‘Africa Vision 2040', by when he anticipated that the African oil industry would have grown markedly. At that point there could be 1 250 oil companies operating in Africa, between 50 and 100 African oil producers would be operating at an international level, more than 25 State-owned oil producers would be operational, and 25 African States would have proven gas reserves.

Junior oil exploration company Surestream Petroleum MD Chris Pitman explained that Africa was dominating the attention of global independent oil and gas exploration and production companies.

He added that, with an increasing number of oil companies operating in Africa, the landscape was also changing, with increasing competition from national oil companies and few new licence opportunities available in established oil provinces and countries.

The attention of these companies would remain focused on North and West African oil and gas deposits in the near and medium-term. However, new information regarding oil and gas resources in East Africa, especially Kenya,

Ethiopia, Uganda, Seychelles and Madagascar, seemed promising. In terms of operating costs for independent oil companies, Candax Energy

CEO Mike Wood stated that recent energy price volatility had demonstrated that the industry needed an oil price of $70/bl to enable exploration investment to flourish in Africa.

However, it was stressed that there were still many uncertainties presently influencing the fortunes of independent oil companies, which were the result of cash flow constraints, geopolitical pressures and the credit squeeze.