Sunday, July 20, 2008

Global Balance of Oil Wealth Shifts Towards Africa

From the UK Telegraph; By 2015, America will buy one quarter of all its oil from Africa, compared with about 15 per cent from Saudi Arabia, and the continent will become the superpower's largest single supplier, with the sole exception of Canada. Two reasons lie behind this crucial change in the global pattern of oil production.

First, Africa possesses a large proportion of the world's untapped reserves, mainly in offshore fields.

For decades, oil companies steered clear of Africa and conducted relatively little exploration. While new fields were discovered in the Middle East, the Gulf of Mexico, Alaska and South America, Africa was neglected.

Hence Africa now accounts for a high proportion of discoveries. Of the eight billion barrels of new reserves found in 2001, seven billion were in Africa.

While this figure was unusually high, at least one third of all global oil discoveries since 2000 have taken place in Africa, mainly in the Gulf of Guinea along the coastlines of Angola, Nigeria, Congo-Brazzaville, Gabon and Equatorial Guinea.

Thanks to high oil prices, it makes economic sense to develop these new fields and conduct further exploration. Angola's proven reserves now exceed 11  billion barrels. But there could be two or three times as much oil still lying undiscovered along the country's vast Atlantic coastline. The central goal of America's energy policy is to diversify suppliers.