http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.22Change: -0.23
R/$ = 11.16Change: -0.09
Au 1240.10 $/ozChange: -4.17
Pt 1243.50 $/ozChange: -18.70
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Dec 05, 2008

Oil and gas should not be viewed as Africa’s curse, industry expert asserts

Back
Siberia|Africa|Exploration|Africa|Algeria|Angola|Canada|Egypt|Libya|Nigeria|Somalia|South Africa|Crude Oil|Direct And Indirect Economic Benefits Oil|Energy|Oil|Oil And Gas|Oil Companies Dates|Oil Exploration|Oil Exploration Industry|Oil Industry|Oil Reserves|Duncan Clarke|Locomotive|Alaska
|Africa|Exploration|Africa|Angola||Energy|Oil And Gas|||Locomotive|
siberia|africa-company|exploration|africa|algeria|angola|canada|egypt|libya|nigeria|somalia|south-africa|crude-oil|direct-and-indirect-economic-benefits-oil|energy|oil|oil-and-gas|oil-companies-dates|oil-exploration|oil-exploration-industry|oil-industry|oil-reserves|duncan-clarke|locomotive|alaska
© Reuse this



Contrary to conventional wisdom, oil is not a curse for Africa. “Oil is a blessing for Africa,” argues Global Pacific & Partners chairperson and CEO, and oil industry specialist Dr Duncan Clarke.

“The reasons are that the oil industry has direct and indirect economic effects: it opens remote areas, and brings in foreign direct investment; it brings in technologies and companies; it creates employment; and it generates revenues for States.

It benefits countries’ balances of payments. It is the leading edge of investment into the continent. Oil is the locomotive pulling the continent forward – although it does occasionally stall. There has never been a proper analysis of the direct and indirect economic benefits oil and gas bring to Africa.”

He points out that, regarding crude oil, Africa is a continent of great promise and prospectivity. “The oil exploration industry has been active in Africa for over 100 years.”

Nor is it only foreign companies that are active in the African oil industry. “There are now 15 or so African countries which have indigenous independent oil companies,” he reports. “In fact, in Nigeria, the history of independent oil companies dates back 50 years. But the proliferation of such enterprises across the continent is new. It is a good sign. International companies need local partners.”

Then there are Africa’s State-owned oil companies. These, too, have proliferated in recent years. Twelve such companies have been created since the start of the twenty-first century, and today only 15 African countries do not have State-owned oil exploration and/or production companies. “The biggest African State-owned oil companies are in Algeria, Angola, Egypt, Libya and Nigeria,” says Clarke. “The rest, apart from South Africa’s PetroSA, are relatively small. In general, they are improving in quality and some are already world class.”

Of course, there are many non-African oil companies active across the continent. These include more than 50 major inde- pendents, about 25 “superindependents” and the top five “supermajors”, as well as a surprisingly large number of really big non-African State-owned companies. “In 2000, there were seven foreign State-owned oil companies in Africa,” he states.

“Today, 2008, there are about 30. Together, State-owned oil companies own 90% of the world’s oil reserves and represent a large and growing group. Non-African State-owned oil companies are much more dominant in African upstream exploration and production than are African State-owned companies outside their home bases.”

Oil exploration activities are running at high levels across the continent. Some 500 oil juniors are active in Africa, includ- ing local companies – Egyptians, Nigerians and South Africans, besides many others. Clarke estimates that this year will see 470 exploration wells drilled across the continent, in comparison with 170 in 2000 and an average of 280 from 1987 to 1997.

“There remains quite considerable unexploited potential in Africa,” he highlights. The continent now accounts for 13% of world oil output and 9% of global oil reserves – and the continent’s reserves are increasing. And there is also natural gas as well.

Some African countries have more gas than oil. Further, Africa is a much easier place to work than the far north (Siberia, Alaska, northern Canada) or the deep ocean. “Africa is now the world’s number one energy capital expenditure destination.”

All this is a blessing, because Africa is a continent of considerable underdevelopment and great poverty. Some 70% of Africans still live in subsistence economies, and about 50% live on less than a dollar a day. Africa accounts for only 4% of the world’s electricity, and 75% of this is found in just three countries – Egypt, Nigeria and South Africa.

It is forecast by the United Nations that Africa’s population will reach two-billion by 2050, of whom 50% will dwell in urban areas, and 70% of these urbanites will live in shanties. “Poverty in Africa needs to be solved by high, sustained, secular rates of economic growth,” highlights Clarke.

The oil and gas industry can play a key role in achieving this, although “oil alone cannot save Africa”. “This depends on government, sociopolitical and other factors.” Thus, in 1884, Africa was divided into some 10 000 political entities (polities); today, officially, it is composed of 54 states, but, he says, “I can identify about 70 polities” in contemporary Africa. For example, Somalia is officially one country but, in practice, is divided into three or four distinctive polities, including Puntland and Somaliland.

Development needs peace, but many African countries are under pressure, usually from domestic political crises, including separatist movements. “There has been a relationship between conflict and oil, but it is not a unicausal one, nor a necessary one,” he points out. “Some oil countries have no conflict, and some countries in conflict have no oil.” •

(Duncan Clarke is the author of The Battle for Barrels and Empires of Oil; his latest book, Crude Con-tinent: The Struggle for Africa’s Oil Prize, was published in October.)

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other News This Week News
Integrated energy and chemical company Sasol has partnered with Unisa Graduate School of Business Leadership (SBL) professor and founder and CEO of PanAvest Partnership Dr Douglas Boateng to publish a series of books on executive supply chain management aimed at...
Rwanda has joined a number of East African countries seeking to import electricity from Ethiopia as its demand grows. After it became apparent several generation project it is implementing will not come on stream early enough, now plans to import 400 MW from Ethiopia...
More
 
 
Latest News
Swedish Ambassador to South Africa Christian Meuwly will next week inaugurate the final roll-out of the new vertical shaft brick kiln (VSBK) at clay brick manufacturer Langkloof Bricks’ facility in Jeffrey’s Bay. The VSBK formed a part of economic, social and...
Hot on the heels of the launch of Rustenburg’s rapid transport system’s brand name and logo last week, a negotiation framework agreement (NFA) has been formally agreed to and signed by the Rustenburg Local Municipality (RLM) and taxi and bus operators affected by the...
The runway at the George Airport, in the Western Cape, has been rehabilitated to improve safety, in terms of run-off and storm water drainage, and the structural capacity of the pavement surface. The scope of work comprised the extension of Runway 11/29, the...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
Integrated energy and chemical company Sasol has partnered with Unisa Graduate School of Business Leadership (SBL) professor and founder and CEO of PanAvest Partnership Dr Douglas Boateng to publish a series of books on executive supply chain management aimed at...
MORNÉ DU PLESSIS Increased urgency and burgeoning awareness of the importance of these issues are beginning to change political risks and, thus, State responses to environmental concerns
The World Wide Fund for Nature’s (WWF’s) 2014 Living Planet Index (LPI) indicates that there has been a 52% decline in vertebrate species since 1970. The Index tracked the trends of 10 000 discrete populations of over 3000 vertebrate species between 1970 and 2010.
Rwanda has joined a number of East African countries seeking to import electricity from Ethiopia as its demand grows. After it became apparent several generation project it is implementing will not come on stream early enough, now plans to import 400 MW from Ethiopia...
Metrorail’s first new passenger train will arrive in November next year, says Passenger Rail Agency of South Africa (PRASA) CEO Lucky Montana. “Next year we will be able to put our hands around the infrastructure and equipment we have been talking about for so long.”
The Competition Commission has launched an investigation into what it says are “price fixing, market division and collusive tendering in the market for the manufacture and supply of automotive components to original equipment manufacturers” (OEMs, or vehicle...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks