What to do with a slippery oil price? After a drop in the oil price and a recent hike to $60 a barrel, have we seen the last of the low oil price? Not just yet. The price is likely to even out between $50 and $60 per barrel and this upturn was almost anticipated.

There is a slight relief in the air and many executives have longed for this relief. However a lower oil price is the last of the worries for oil companies and businesses in general, specifically in Africa. For Africa that has been burdened with the recent outbreak of Ebola, astronomical poverty and a consistent and rampant HIV/AIDs epidemic, this is a window of opportunity.

Over the last decade Africa’s exploration for hyrdrocarbons is winning the race. As a result East Africa has entered the Frey adding impetus and balance of discovery on either side of Africa.  In just one year, back in 2013, out of the global top ten discoveries, six we made in Africa alone.

“Oil and gas explorers will be relooking at their budgets and deciding where to allocate their limited capital spend given the substantial decline in the oil price. Overall, low oil prices could have an impact on production undermining certain players in the market,” Warns Chris Bredenhann, PwC Africa Oil and Gas Advisory Leader.

For the countries with low-income on the African continent, some of which have been highly dependent on agricultural exports up to now, this is good news. There does still remain an element of surprise and if not careful, companies could find themselves slipping on oil price fluctuations.

Oil & gas explorers will be scrutinising (and likely reducing) their budgets and may include validation of portfolios plus general cost-cutting on unrestricted capex.

Already London-based Tullow Oil has reduced its global 2015 exploration budget to $200 million (an 80% reduction in what it spent in 2014). It is also the season to take out the cheque books that may see a splurge in the uptake in M&A activity as players with resilient balance sheets procure assets from market grappling entities with limited liquidity.  This will see and maybe unfortunately so, the takeover of smaller African oil producers who will be knocked out of market in exchange for FDI (Foreign Direct Investment).

Bredenhann explains, “While oilfield service companies will venture to cut back on spending, they will also be under pressure by the oil companies to drop their prices.”

Over the past decades oil companies stuck to rigidity that circumvented among OPEC their all those that played fiddle. Today the strategy has to change. It is a game of change, die or downsize and limp. In any case, shareholders will rather read the signs a opt for an M&A (Mergers and Acquisitions). the oil prices will continue to prove slippery for oil companies over the next few, forcing serious structural changes from within.

Oil companies with stakes in Africa are not strangers to risky environments. From unclear legislation to corruption, the continent has always been challenging. In addition, Africa has one of the highest average finding costs in the world at a massive $35.01 per barrel in 2009 – surpassed only by the US offshore fields which came in at $41.51 per barrel.

Combine these forces with a drastically reduced and heavily uncertain oil price, and it’s a sure recipe for re-evaluation of prospects. Africa holds a number of technically challenging (and therefore expensive) hydrocarbon prospects. Examples include deep-water sub-salt exploration activity in West Africa, waxy oil in Uganda as well as offshore exploration leases in South Africa – PwC Report.

Critical is the time for governments to take serious the ‘light’ being shed on the need to policy and legislation reviews and positive change.

To make changes and strategize also requires that we understand the context of the impact across the continent.

South Africa: Offshore exploration will most likely be delayed due to associated costs, price and regulatory uncertainty. However investments in the shale gas spectrum are set to continue. but shale gas plans could continue to progress. Costs in South Africa also come at a time when they energy utility Eskom in not capable of producing sufficient energy to maximise businesses’ production capacity. Already industry has warned the government of outputs that are below par. To make matters worse, the Department of Energy has calmly warned that maintenance on Eskom facilities will last for another 20 months.

Mozambique: LNG projects will continue with delays due to infrastructure. Continuation is primarily due to incurred investment. In other countries where there are reserves but no or extremely limited infrastructure, exploration or extraction is unlikely to transpire with low prices of oil. The reality is that Africa has one of the highest extraction costs in the world.

Kenya: Onshore activity in Kenya is regarded as cost-effective area for exploration. Since 2013 there have been 10 major discoveries in East Africa prompting a balance of economic upsurge   in both West and East Africa.

Angola: As an oil producing country whose main revenue streams are from this black gold, they will most likely have to implore austerity measures. Their markets are not diversified enough and will be challenged in 2015.

Egypt: due to unrest, lower productivity and unsettled political environment the government has cut subsidies. Because the country is a net importer lower oil prices should positively favour changes to their balance of payments. With growing unemployment there should be more liquidity in the market for investment, if their political climate remains fine to mild.

Nigeria: it is unlikely that new exploration project will surface. Development projects however that currently has market traction will continue towards impact. Nigeria is an oil producing county and the investment by Dangote in the planned and confirmed refinery will also retain positive market sentiment for the country. In the medium run the refinery will definitely spur local refining and exports and resurrect some of the downstream SME’s lost during the recession.

Congo: the planned Deepwater subsalt exploration project in a country that has limited markets in terms of diversification, plagued on another front by Boko Haram, are likely to be delayed or cancelled. The country has limited infrastructure and liquidity on any front to sustain low oil prices.

PwC has forecast that the players in the market most at risk are; frontier areas, major gas projects, host governments and OFS (Oilfield Service) companies.

This is Africa’s toughest game of chess yet!