The recent wave of oil exploration has resulted in drilling concessions in virtually every region of the continent – both offshore and further inland. I have maintained that the long term trend of energy price has to be upward as huge populations in fast growing economies such as India and China consume more energy as they industrialize and urbanize their societies. This increase in demand combined with improved drilling technology and geopolitical concerns has caused the industry to venture beyond the traditional production centers in Angola, Nigeria, and North Africa.
Listed here are some the projects either underway or about to start:
|1||Lamu Basin, offshore, Indian Ocean||4,900,000|
|2||Blocks 9 & 12A – Offshore Kenya|
|Offshore, Sierra Leone|
|Offshore, South Africa|
We are fast approaching a point where most countries on the continent are either producing, exploring or considering exploration of oil and/or gas. This has major implications in several areas:
- Global energy market – While I maintain that the general price trend is upward, it is not necessarily in a straight line. The addition of oil from these new sources is bound to put a brake on any price increases. However, there is also a relationship between prices and the industry’s willingness and ability to find new sources of supply.
- Geopolitical – As the African continent, more than just a few countries, becomes identified as a source of oil it will attract the attention of major powers, who are also major consumers of oil. They are already taking an increasing interest in the politics of several countries.
- Commercial – How will African companies and entrepreneurs take advantage of the current oil boom? What is the nature of foreign investment taking place. A few companies – Tullow of the UK, Africa Oil of Canada, Anadarko of the US, Kosmos of the US are frequently mentioned as playing a major role in exploration.
- Development – What will be the impact on economic growth? How will the benefits of any subsequent extraction be share among the people of the producing countries? Will the new oil resource contribute the achievement of the Millenium Development Goals or will it become a curse leading to corruption and political instability?
Here are links to additional information on specific projects: