Rise of African oil production


With almost 10% of oil reserves in the world, Africa is, more than ever, the center of attention. Producing as much as Iran, Venezuela and Mexico combined, African oil production increased by 40% between 1990 and 2004, and it should represent almost 15% of the world production by 2020.

With such figures, the continent is attracting investments from large companies in the sector. The investments on the continent increased by 4% in 2009 while they declined by 16% worldwide. They should reach 30% of global offshore investments by 2030.
Oil production in Africa

Angola and Nigeria are now the two best African producers, who rank before Algeria and Libya even though they hold the largest oil reserves (56 billion barrels estimated).

In 2009, Angola became the first producer of the continent with a production of 2,000,000 barrels per day. With 1.9 million barrels per day, Nigeria, who was a leading producer in Africa for a long time, has seen its production drop by 25% over the last two years.

Since 2004, Equatorial Guinea has produced about 360,000 barrels per day. Sudan, with a production of about 337,000 barrels per day, is now before the Congo – Brazzaville (240,000 barrels/day) and Gabon (235,000 barrels/day). Latest African producer: Ghana has recently discovered oil deposits on its territory in Kubilee. It produces 150,000 barrels per day.

Africans have created the Association of African Countries Producers (APPA) – which also covers North Africa – to defend their common interests. But the majority of oil reserves in Africa is operated by the “Big Five” (Total, BP, Chevron, Shell and Exxon Mobil) to whom African states sell concessions.
African oil now covers almost one-fifth of the US imports and a third of Chinese imports

Several factors explain the renewed interest in African oil. First, the events of 11th September 2001 sparked the US oil rush in Africa – the aim was to reduce their historical dependence on the Middle East. Since 2002, the US officials have acknowledged the “strategic” value of hydrocarbon reserves in Africa.

Along with the US interest, the emergence of China has also contributed to the growth of African oil. With a growth rate of 10% per year, China is the second largest oil consumer in the world and Africa now supplies the Middle Kingdom with over one-third of its crude oil. Consequence: China wants to settle permanently in Africa and major Chinese oil companies such as the CNPC (China National Petroleum Corporation), the Sinopec (China Petrochemical Corporation, the second largest oil company Chinese era), the CNOOC (China National Offshore Oil Corporation) have had an active policy of acquiring oil for the last few years.
The Chinese have been investing in African oil and competing with Western companies

By acquiring the Canadian company Addax Petroleum in August 2009, the SINOPEC acquired a number of petroleum exploration and production licenses in Nigeria. A few months later, the Chinese National Offshore Oil Corporation (CNOOC) offered Nigeria $50 billion to acquire the state shares in twenty-three licenses that are operated by European and American companies (Royal Dutch Shell, Total, Eni/Agip, ExxonMobil, and Chevron). The Chinese goal is to tap into the African market and compete with the Western firms i.e. the traditional Big Five (Total, BP, Chevron, Shell and Exxon Mobil).

Competition between big oil companies on the African continent has only just begun as the African oil interests today all emerging countries such as India, Russia and Brazil.

Source: www.afriqueavenir.org