Africa: a great hope for oil producers but a forgotten continent for global media

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2 March 2011, Oil, Gas, Electricity

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The recent rise in oil prices that has seen Brent crude trade at nearly $120 per barrel has been largely attributed to the ongoing crisis in the "Middle Eastern" oil producing states of Libya and Egypt. Yet global media coverage seems to bypass the fact that these countries are in fact African - a continent with growing prospects in the global oil industry. Recent deals involving companies such as BG, Repsol, and Anadarko in the region could open up the relatively underexplored African market to international oil companies, which would result in substantial increases in the continent's oil and gas reserve estimates.

Whereas this remains possible rather than probable, it is likely that the African oil and gas market will undergo significant changes in the coming years.

For Africa, 2011 will be a big year for other reasons. Elections are expected to take place in more than 20 countries before the year is out, with 10 due in oil producing states such as Nigeria, Gabon, and Sudan. It is true that the poorer citizens of Gabon and Sudan may not have the same levels of online reach as those in Egypt and Libya, where every protester can be a journalist due to the prevalence of social networking. However, this does not mean that their cause should be ignored. At the end of January, public demand for free elections in Gabon, which produces approximately 230,000 barrels per day (bpd), led to clashes between protesters and security forces. Furthermore, on February 12, 11 people died in Nigeria during a stampede at an election rally.

It is more probable than possible that the throng of political activity stirring across Africa will result in social unrest, on a scale far greater than the levels of media coverage it will receive. And even though oil prices are unlikely to reflect this, oil production, the lifeblood of many African economies, will be threatened. This will particularly affect the oil producing nations of southeast Africa; Datamonitor forecasts total oil production in the region (excluding South Africa) to reach approximately 210,000 bpd by 2015, and nearly 389,000 bpd by 2020. Production in the region currently stands at less than 50,000 bpd.

Whereas countries north of the Sahara benefit from the coupling of technological know-how and significant natural resources, other countries in Africa are currently not so fortunate. However, easily accessible oil resources are not as abundant as they once were, and the search for new industry frontiers may place African nations closer to the top of the global oil market pecking order. Protestors may have to wait until then to have their voices heard.

Source: Datamonitor

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