Magazine article New African

The Future Is Bright: Though Dominated by Foreign Companies, the Oil and Gas Industry Has Become Vital to African Development. (Oil and Gas)

Magazine article New African

The Future Is Bright: Though Dominated by Foreign Companies, the Oil and Gas Industry Has Become Vital to African Development. (Oil and Gas)

Article excerpt

The upstream oil industry in Africa accounts for 7% of the world's total, with proven reserves of 76 billion barrels. Five countries have a lion's share (85%) of Africa's production. They are, in order of output, Nigeria, Libya, Algeria, Egypt and Angola. Others are Gabon, Congo, Cameroon, Tunisia, Equatorial Guinea, DRCongo and Cote d'Ivoire,

Several other countries have jumped onto the exploration bandwagon, seeing it as a catalyst to economic development. Notable among these are South Africa, Namibia, Sudan, Madagascar and Chad. Mozambique and Tanzania have also shown great potential as gas producers.

There is an active downstream industry comprising 44 refineries in 25 countries. Distillation capacity is about 3,000 barrels per day or 4% of the world's total. South Africa also produces synthetic fuel.

International oil companies dominate the scene in Africa, existing side by side with local companies. Unfavourable global economic conditions have encouraged many African countries to intensify the search for oil as a solution to economic development. Oil, as an energy source, has become crucial to world economic output, accounting for 40% of energy needs. The price of energy affects everything.

A picture of Africa's position in this crucial industry is provided by contrast. 65% of the world's oil reserves are concentrated in the Middle East, which produces 30% of world output and consumes only 6%. North America, the Far East, Oceania, and Western Europe consume 77.5% of the world's oil, but have proven reserves of only 12.5% and produce 44.4% of world production.

Africa, on the other hand, has proven reserves of 8% of the world total, produces 11% and consumes only 3%. Interest in exploration is on the rise with several oil companies undertaking exploration along the African coastline.

And often the risk associated with lack of foreign direct investment has not been a factor when it comes to oil. Angola, despite 35 years of debilitating conflict and high risk, receives more in foreign direct investment when it comes to oil than practically all the other African countries, which have had far less risk.

Another example has been Nigeria where nothing has deterred Western companies who often cite a laundry list of factors that scare off investors in Africa. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.