Africa

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Introduction to Africa oil geography

  1. Nigeria
    1. History
    2. Political tensions
    3. Oil reform
    4. Partnerships
    5. Future
  2. Angola
    1. History
    2. Wars
    3. Corruption
    4. Digits
  3. Algeria
    1. Exploited sites
    2. Sonatrach
    3. Oil dependency
    4. Future
  4. Libya
    1. History
    2. From colonization to nationalization
    3. National Oil Corporation
    4. International sanctions
    5. Oil fields
    6. Refineries Libya
    7. Digits
  5. Egypt
  6. Chad
  7. Sudan
  8. Gulf of Guinea


Nigeria

History:

Oil was discovered in Nigeria in 1956 in Niger Delta. This oil is interesting because it is a light crude oil, softened, with low sulfur content, easy to be refined. The country joined OPEC in 1970.

Further to the crude oil shock in 1973, crude oil and gas become country main incomes, taking progressively the place of agricultural production. Port Harcourt city is the main production place in the country attracting a lot of workers. Nigerian oil, produced up to 40 % by Shell Company, present essentially in Delta regions, south Nigeria, represents 99.6 % export incomes and 80 % income of the country.

Nigeria is a great crude oil producer on the world market. It is the first producer in the African continent, 5th OPEC producer and 10th world producer with an extraction rhythm of 2.4 million barrels a day in 2009, with 36 billion barrels of proved oil reserves. It is the second economic power in Africa, behind South Africa. It is a candidate to a permanent Seat at the Security Council of United Nations.

Oil nigeria

However, a high drop of its production to 2.2 million barrels appears in 2010. It might carry on dropping due to the political tensions in the country.

This first African oil power succeeded in eliminating its external debt. The main purchaser of African oil is China. Nigeria is a very young democracy having to push forward this oil advantage to become a real economic power and allow a better investment in the society. So, the international scene is a witness of Nigeria emergence as a new economic power, while the population, in spite of this huge natural asset, remains very poor. One of main causes of this poverty is corruption, considered as the biggest evil of this country.

Nigeria exports its oil in great majority to the United States and also to Europe.





However, ironically, the country often lacks fuel and various refineries are under-exploited, or unexploited.

The country growth has reached 6 % each year since 2005.

Strong political tensions:

Oil incomes are not, or just a little, re-distributed to the population. In effect, in terms of HDI, Nigeria occupies the 158th rank, while being the second richest country in Africa. The country is in decay because of corruption.

Obviously, this causes tensions between the population and the present government. The situation results in a high insecurity in Niger Delta, i.e. in Ijaws region.

Since the years 2000, sabotage against crude oil plants multiply, as well as Taking of Hostages (20 abductions in 2006) aiming particularly Shell company. These abductions are claimed by MEND (Movement for the Emancipation of the Niger Delta). These militate against the exploitation and the oppression of Niger Delta populations. They particularly fight against crude oil companies and against Nigeria federal government.

Furthermore, various ethnic groups militate against pollution in Niger Delta caused by crude oil companies (particularly Shell).

Oil reform of president Yar’Adua:

To eliminate NNPC monopoly:

President Umaru Yar’Adua had imagined a vast reform of the oil sector to remedy this situation. A new oil law “New Petroleum Industry Bill”, also known as PIB, had been redacted by people around the government. This text planned to share the domestic oil company, NNPC (Nigeria National Petroleum Construction Company) into several entities, independent and open to private capital. Since almost forty years, NNPC has covered the whole oil activity from exploration to refining.

In the new organization imagined by the Nigerian power, a political organ, the oil Directorate, might have presided to strategic choices. An inspection organism, independent from the politic power, might have been settled. Its role might have been to control the behavior of the different players in the oil sector and to grant mining licenses to different companies. Among the other structures, the creation of which had been imagined by this new oil law, there is the National Petroleum Assets Management Agency (NAPAMA) : NAPAMA had to manage taxes and royalties perceived by the Nigerian State. From a strictly operational point of view, the objective of president Umaru Yar’Adua was to develop the oil production and not only for exploration but also to make the Nigerian population to benefit from it, as this population does not own any energy resources at all.

However, major companies (Chevron, Exxon, BP) declared that, in its initial version, the new law might make far more difficult the investments necessary for the oil industry. These are estimated at fifty thousand dollars.

Since the death of president Umau Yar’Adua in 2010, Jonathan Goodluck being the successor, political tensions have grown and the implementation of this reform disappears little by little, what should be profitable to major companies but damageable to the Nigerian population, stirring up more and more the political tensions.

New partnerships:

The domestic Nigerian oil company NNPC recently signed an agreement concerning the export of oil products towards the United States and other regions in the world within the scope of a strategic partnership with the Brazilian oil giant, Petrobras.

NNPC, which was a great exporter of crude oil in Africa, let know that this new agreement would increase its basic incomes in a durable way.

Both oil giants also decided as a conclusion to their discussions to seal a partnership in the following fields : exploration and oil production, refining and petrochemicals, distribution, oil marketing, gas and electricity production, but also research and development.

Nigeria uncertain future:

Nigeria owns a great quantity of oils. However, political tensions are so important, due to the non-re-distribution of incomes, generated by the State thanks for the oil industry, to the population, that the future of this first African exporter remains pending. Foreign Direct Investments (FDI) remain yet constant (in the oil industry) because, at present, due to the corruption of the managers, the Major companies may make large profits. But what will happen if the political tensions grow in the future ? Nigeria might lose its first place as an African exporter of oils due to its political tensions in the nearest future years.


Angola

History:

The “block zero” concession was first exploited in Angola as from 1957. Exploitation rights had to be granted to the American company Gulf Oil. The first oil fields were discovered in 1962 and the oil production started in 1968. This concession, “block zero”, is still exploited today, with a production amounting to 500 000 barrels in 2010. CABGOC (CABinda Gulf Oil Company) company, a subsidiary of the American company Chevron Corporation, with 39.2 % shares, and the Angolan public company Sonangol (Sociedade Nacional de Combustiveis de Angola) with 41 % shares are majority-owned in the co-company which exploits the concession. The French group Total owns 10 % shares (ceded by Sonangol in 1992) and the Italian group ENI 9.8 %.

Crude oil platforms are located offshore 40 km away from Angolan coasts. Deep sea is 1500 meters deep.

Since July 2005, these platforms are the property of the Angolan oil company Sonangol. Before, they belonged to the French oil company Total which had built them in 1985.

The French company Total operates one third of its production in Angola. This proportion is going to increase.

10 million liters of crude oil are extracted each day over there. Oil is then dispatched on the Angolan land territory in the capital city of Luanda.

Wars, then dazzling development:

Further to four decades of wars (independence and civil wars), the growth of the country has been dazzling as from 2002. The growth rate increased by 9 % in an average as from 2002 till today and forecasts for the future years are very optimistic. So, the Angolan economy should climb to the 5th position in the classification of the continent up to 2020.

The production increases from 900 000 barrels a day in 2003 to 2 million barrels a day in 2008 thanks for a series of semi-deep offshore deposits (nearly 1500 m), several of which overrun 200 000 barrels a day.

Kizomba complex (“block 15”) reaches by itself 750 000 barrels a day. The country starts to drill onshore, mainly in Cabinda (Cabinda is one out of eighteen provinces of Angola, located far north of the country).

oil concessions angola

Cabinda oil production counts for 60 % Angolan oil production.

Angola has made part of OPEC since 1st January 2007. In 2009, its production reaches 1.26 million barrels oil.

Its proved reserves amount to 9 billion barrels. As per various studies, reserves might reach a far higher level : at least the double.

Domestic consumption is almost non-existent : 60 000 barrels a day in 2010.

The country has then a large surplus. Indeed, it produces four times more than its domestic demand.

The major part of Angolan oil goes to the United States (600 000 barrels a day), so Angola is the 8th supplier of the United States. At first trimester 2008, Angola became the main oil exporter to China. The rest of the exports go to Europe and Latin America. American companies invest over half investments in Angola, essentially with Chevron-Texaco.

Before, oil deposits were exploited by French and American companies. Now they are in majority managed by Chinese companies.

Production reached in 2010 two million barrels a day. This production is constantly growing. It reached 1.4 million barrels a day in 2005.

Oil industry control is carried out by Sonangol, a conglomerate owned by the Angolan government.

Rich country, poor population, corruption:

Its president, José Eduardo dos Santos, successor of Angolan Liberation, Agostinho Neto, dead in 1979, is associated with corruption and oil misappropriation of funds, coming, in a major part, from Cabinda enclave. He and his family are known to be detaining a great building heritage in the main European capital cities and bank accounts in Switzerland and in other fiscal paradises. So, he misappropriates, to its sole benefit, dollars coming from oil with a population which is destroyed by 30 years of civil war and famine. Angola is placed in 158th position in the world HDI and 161st place of Transparency International (CPI) noting a very high corruption rate.

Digits:

Angola brings one fourth US oil supply. It is possible that its resources are far more considerable than those which are actually proved ; they might overrun those of Kuwait.

Angola forecasts a production reaching 2.5 million barrels a day in 2011 and 2.6 in 2012, what should rise it to the first place in the African classification.

Incomes from oil production represent in 2010 over 50 % of the Gross National Product (GNP) and 90 % of the Angolan State.


Algeria

Exploited sites:

Algeria is the third crude oil exporter in Africa.

Main wells in Algeria are among the most important in the world. Generally, they are located in the South. According to Sonatrach (Algerian oil group representing 98 % incomes in local currency), the 67 % hydrocarbons reserves are located in the regions of Oued Mya and Hassi Messaoud. Gas in hassi R’mel and crude oil in Hassi Messaoud (oil). Illizi contains 14 % reserves. At last, Rhourde Nouss contains 9 % and Ahnet Timimoun 4 % and Berkine. Sites exploited to extract oil or to look for hydrocarbons at present, in Algeria, are : Hassi messaoud, Ain Amenas, hassi R’mel, Stah, Rhourde Nouss, Tin Fouyé Tabankort, Gassi Touil, Ohanet, Haoud Berkaoui, Hassi Berkine, Ourhoud, Mensel Lejmet North and satellites, Rhourde Ouled Djemaa, Touat, El Gassi, Ain Salah, Rhourde El Baguel.

Sonatrach, the Algerian giant:

sonatrach logo

Sonatrach is the first crude oil company in Africa and the 12th in the world. Its turnover amounts to 65 billion dollars in 2008.

It intervenes in exploration, production, transport by pipelines, transformation and marketing of hydrocarbons and their derivatives.

Adopting a diversification strategy, Sonatrach develops in activities such as electrical generating system, new and renewable energy, sea water desalination, research and mine exploitation. Pursuing its internationalization strategy, Sonatrach operates in Algeria and in several regions in the world : in Africa (Mali, Niger, Libya, Egypt), in Europe (Spain, Italy, Portugal, Great Britain), in Latin America (Peru), and in the United States.

The activity upstream covers the activities of research, exploration, development and production of hydrocarbons. These are ensured by Sonatrach only or in association with other crude oil companies.

16 discoveries carried out in 2009, 9 in person and 7 in partnership. 9 discoveries of hydrocarbons carried out, 7 in person and 2 in partnership, stopped at November 2010.

Sonatrach carried out two crude oil discoveries abroad through its subsidiary Sipex, in association with National Oil Corporation (NOC). These discoveries were carried out in Ghadamès basin , 230 km south Tripoli city in Libya.

Almost the totality of reserves discovered today is located in the Eastern part of Sahara. The geographic repartition based on cutting the extractive domain into several oil provinces, more or less homogenous, gives this:

- 67 % oil and gas reserves are contained in Oued Mya and Hassi Messaoud provinces, where the two giant wells Hassi Rmel (gas) and Hassi Messaoud (oil) are located.
- Illizi basin occupies the 3rd position with 14 % initial reserves in place.
- Then, we have Rhourde Nouss (9 %), Ahnet Timimoun (4 %) and Berkine basin.

The nature of hydrocarbons in each province is as follows:

- The Hassi Messaoud-Dahar province corresponding to one of the most important tectonic events in Sahara, contains 71 % oil reserves.
- The Oued Mya province, an essentially Mesozoic basin, contains mainly gas (50 % reserves) and one oil part (6 %).
- Illizi basin, essentially Paleozoic, contains, in percentage, as much oil (15 %) as gas (14 %).
- Rhourde Nouss and Berkine provinces correspond to basins, the geological history of which is a bit complex (Paleozoic and Mesozoic). They contain 19 % gas (essentially in Rhourde Nouss), almost half of which is classified as probable or possible and 8 % oil.
- Ahnet-Timimoun basin, essentially Paleozoic, only contains gas (13 %), half of which is still classified as probable and possible.

gisements algeria

Numerous foreign oil companies operate in Algeria in association with Sonatrach, among them : Total and GDF (France), Repsol (Spain), Rosnef (Russia), ENI (Italy), BP (Great Britain), Statoil hydro (Norway), Anadarko (US) or CNPC (China).

Crude oil shipping

MESDAR:

supertanker transporting crude oil, VLLC type (Very Large Crude Carrier), acquired in the frame of a partnership between the Japanese company Kawasaki Ship Building and Sonatrach Petroleum Corporation Bvi, subsidiary at 100 % of Sonatrach Group. Mesdar has a capacity of 315 000 cubic meters (i.e. over 2 million barrels).

mesdar algeria

Corruption at Sonatrach’s:

At the beginning of 2010, a scandal happened within the oil company Sonatrach.

A corruption matter is revealed at the beginning of 2010. It is question of an affair dealing with contracts concluded between the oil group and project research firms or companies specialized in security.

Mohamed Meziane, Sonatrach CEO since September 2003, quitted the company.

The impossible oil detoxification:

At first, Algeria is flourishing. Incomes from oil allowed it to constitute a huge reserve of 150 billion dollars. The government uses its budget saving (43 % GNP) to build roads, railways, houses and dams. It expects to involve in an economic startup comparable to that of Asia and which ensures the social and political peace. The strategic speech is exceptional.

If we examine the situation carefully, up to now, nothing happened. In 2011, as per figures from IMF (International Monetary Fund), Algeria will present a lower growth (+4 %) compared to that of its Moroccan (+4.3 %) and Tunisian (+4.8 %) neighbors, and yet these neighbors do not have a good subsoil. Almost one young Algerian out of four will still be jobless.

Future pressure risks:

As the end of crude oil is not for tomorrow, and as there are new wells, the extraction will carry on beyond 2040 as per specialists. This will allow the government to maintain a system it has practiced for decades. Oil incomes feed State budget, which gives the public banks means of financing public enterprises. As this will not create any durable, formal and well-paid jobs, they will have, at regular intervals, to open budget valves to calm the population exasperation. That is what did, at the end of August, the complementary finance law 2010, announcing an increase over 30 % wage bill of civil service.


Libya

History:

The discovery of the first biggest oil fields as from 1956 transformed the economy of the country. The oil production grows very quickly reaching 3 million barrels a day during the years 1960 and making Lybia one of the main exporters in the world. This growth is accompanied by a very rapid elevation of the standard of living: in the years 1970, GDP by inhabitant of Libya is one of the highest in the whole Africa.

African GDP map carte afrique pib

Libya is the second crude oil producer in Africa behind Nigeria and before Algeria. But Libya holds the biggest African oil reserve ; its reserves are estimated at 47.1 billion barrels in 2011. Libya is then one of major players of OPEC (Organization of Petroleum Exporting Countries).

The Libyan oil has a good quality, to produce it is not expensive (1$ a barrel for some wells) and close by consumption centers as well as European markets. The production capacity is partly disabled by the slackness of investments related to the embargo derived from the economic sanctions imposed by UNO. This embargo was released in 2003 only.

From colonization to nationalization:

In 1911, Libya is colonized by Italy. It will get back its independence in 1951 and Idris 1st proclaimed himself King of Libya. He will exercise this function from December 24, 1951 till September 1st, 1969. This monarchy was contested as well as at the internal politics level (very bad social conditions) as at the external politics level (rebels reproached to the king his collaboration with United Kingdom and the United States. The major Western companies benefited from privileged agreements for oil exploitation and exportation). Before than Kadhafi arrived to the Power, Libya is a poor country with an economy based on agriculture.

The young monarchy of Idris Ist was reversed by Colonel Mouammar Kadhafi on September 1st, 1969.

Muammar al Gaddafi Mouammar Kadhafi

He introduces the Libyan Arab Republic, rises royalties and the taxation of oil Trade: incomes issued from the oil industry get multiplied by eight between 1969 and 1974. After establishing vast social measures, Kadhafi develops the industry and energy infrastructure, namely in petrochemicals area.

At the time of the first oil shock, the government takes the control of the oil concessions of the country up to 51 %, through National Oil Corporation (NOC) created in 1970.

National Oil Corporation:

National Oil Corporation (NOC) is the Libyan domestic company. It supervises 70 % oil industry of the country. Its major subsidiaries are Waha Oil Company (WOC), Arabian Gulf Oil Company (AGOCO), Zueitina Oil Company (ZOC) and Sirte Oil Company (SOC).

Libya NOC Libye National Oil Corporation

Libya attracts hydrocarbons exploration as from 1956 when a major field was discovered onshore at Syrte basin. Libya authorized numerous concessions, namely to Esso, Mobil and Texas Gulf (become ExxonMobil). Major discoveries took place in 1959. Its first manager was Salem Mohammed Amesh.

In 1970, the positioned Power and its vast social reforms nationalized NOC. It became then the Libyan domestic company. However, NOC preserves associates such as Occidental Petroleum Company (Oxy), Sincat (Italy) and Saipem (ENI subsidiary). Then, oil fields got nationalized, namely those of Umm Farud (which belonged before to ConocoPhillips) in 1970, of Sarir (formerly held by BP) in 1971 and of Sahabir (held before by AMOCO) in 1976.

During the first oil shock (Kippur war), the government claimed, as we know, an embargo on the countries which supported Israel State. However, the United States, France and Italy concluded agreements with Libyan government, among them Exxon and Mobil (ExxonMobil), Elf Aquitaine (Total) and Agip (ENI). Production reached 85 % onshore for the Libyan government, 81 % offshore.

Other concessions were granted to Amoseas (American Overseas Petroleum Limited) for the following fields: Beida, Hunt, Arco (BP), Esso (Exxon Mobil) and Shell (Royal Dutch Shell), within 17 %. Mobil-Gelsenberg was held by NOC (51 %), Mobil (32 %) and Gelsenberg (17 %).

In 1976, NOC produced 408 000 barrels a day.

During Khadafi reign, NOC production (controlling 100 % activities of the oil domestic sector) stabilized to 1.8 million barrels a day up to 2010.

Libya oil production petrole libye

By end 2011, when Libyan crisis was very intense, production only reached 200 000 barrels a day.

In March 2012, Nasser al-Manaa, the chief of TNC (Transitional National Council) announces that Libyan production reaches 1.45 million barrels a day. He underlines also that this might exceed that of before the War up to the end of the year.

International sanctions:

American sanctions, further to accusations of terrorism and collaboration with Soviet Union, were applied on March 10, 1982. Imports of Libyan crude became forbidden. Exxon and Mobil left their concessions in 1983. In march 1984, sanctions became more marked and forbade any export since the petrochemicals complex of Ras Al-Enf. On January 7, 1986, Ronald Reagan forbade the United States companies for any commerce or financial agreement with Libya, while freezing Libyan assets in his country.

American sanctions persist and now the United Nations, on March 31, 1992 gives sanctions to Libya, further to Lockerbie attack. This time, a real embargo is placed in order to stop Libya oil benefit.

On December 22, 2003, Libya stopped its program of WMD (Weapon Massive Destruction) and signed the nuclear non proliferation treaty.

On June 4, 2004, the United States received the first delivery of Libyan crude since over 20 years. The major western oil companies re-invest in Libya as from January 2005.

Further to embargo end and to the definite clearance of sanctions from United Nations Security Council, the country benefits from a growth up to 5 % in 2003 and 2007. In 2010, the growth exceeds 10 % and GDP by inhabitant increases by 8.5 %.

On February 15, 2011, the even day on which first protestations start, involving the open revolt against the regime, then the civil war which will involve Kadhafi death, an FMI report shows the good management by this one and encourages him to continue to improve economy, mentioning its ambitious agenda of reforms.

TNC (Transitional National Council) announced early 2012 that no new oil contract will be signed before that a new government is not formed after some elections.

Oil fields:

Most oil fields are located in Al Wahat shabiyat (district).

libya oil fields champs petroliers

Sarir:

Located at 500 kilometers east Tripoli, in Syrte basin, Sarir field holds 12 billion barrels. This super giant field is the biggest in Libya. It was discovered by BP in 1961 by 2 700 meters deep. Its production capacity reaches 200 000 barrels a day in 2011. Oil has an excellent quality (37.2° API) is is carried by pipeline to Marsa El Hariga terminal. It belongs to NOC and BP in an equal quantity.

Sharara:

Located at 800 kilometers south Tripoli, in Murzuq basin, Sharara giant field was discovered by Petrom (Romania) in the years 1980. Its production started in 1996. Its reserves are estimated at 2 billion barrels and its oil has a very good quality (44° API). It produces 400 000 barrels a day in 2011. In October 2011, it is held by NOC up to 75 %, Repsol (Spain 10 %), Total (7.5 %) and OMV (Austria 7.5 %). Production is carried to Zawia terminal west Tripoli.

Elephant:

Also known as El Feel, Elephant is a giant field located 750 km south Tripoli, in Murzuq Basin. It holds 1.2 billion barrels. It was discovered in October 1997 by a consortium managed by the British company Lasmo (composed with ENI and five South Korean companies). Lasmo fixed its production quote to 1 dollar a barrel. Its production started in February 2004. ENI (holding 33 % shares) exploited the field in partnership with NOC (33 % also), National Korea Oil Company (16.67 %), SKP Corporation of Korea (8.33 %), Majuko Enterprise Limited of Korea (5 %)and Daesung Industrial Company Limited of Korea (3.3 %). Its production reaches 126 000 barrels a day in2010.

Waha:

Located east center Libya, in south center of Syrte basin, Waha fields are the most ancient fields in the country. Their production started in the years 1950. It reached 1 million barrels a day in 1969, 400 000 in 1986 and is stable today at 350 000 barrels in 2010. These fields are held by NOC up to 59.17 %, ConocoPhillips (up to 16.33 %), Marathon (16.33 %) and Amerada Hess (8.17 %). Production was carried through a pipeline 430 km long going from Gialo field, passing through that of Waha and Samah, pursuing then to the north passing through Dahra before reaching the terminal Es Sider, located in Syrte Gulf.

Numerous other fields are present on the list, such as the following fields : Ain, Al Wafa, Arshad, Assumud, Attahaddy, Bouri, Brega, Defa-Waha, El Beda, El Sharara, En Naga, Hamada, Jebel, Jerbi, Mabruk, Messla, Raguba, Ralah, Sarir, Sirtica, Wadi, Zuetina.

Libya keeps a large potential of reserves to be discovered. As a matter of fact, their exploration ratio by km is only 16 wells for 10 000 km, what is very few. Oil countries drill, in an average, every 50 km (the world average is 105 km). Murzuq, Kufra and Cyrenaic regions probably hold basins dating from the Paleozoic period as well as from high Paleozoic period for Ghadames and Syrte regions.

Only 30 % of the Libyan territory has been explored for the moment.

Refineries:

NOC and its subsidiaries refine most Libyan production (almost 380 000 barrels a day), mainly in its Ra Lanuf refinery (220 000 barrels a day, held by ZOC), Zawia (120 000 barrels a day, held by RLOGPC), Brega (10 000 barrels a day, held by SOC), Tobruk and Sarir (respectively 20 000 and 10 000 barrels a day, held by AGOCO).

Libya oil terminal petrolier Libye

Approx 60 % refined products are exported through Tamoil to Europe: 495 000 barrels a day to Italy, 253 000 to Germany, 113 000 to Spain, 87 000 to France, 85 000 to the US, but also to Switzerland and to Egypt in 2006.

In spite of Italy colonial background, Libya maintains strong commercial links with Italy, remaining its main partner.

Digits:

Libya GDP (PPA) is the highest in the African continent in 2011, reaching 12 000 dollars (classifying it among 50 richest countries in the world). It benefits from a stable growth equal to 8 % since 2003. Its HDI is 0.840, i.e. the highest in Africa. Its economy is greatly due to oil export, up to 95 %. The activities represent 35 % its GDP, 45 % for the tertiary sector, 14 % for the secondary sector and 6 % for the first sector (suffering the nature of country soils, desert up to 94 %).

It is an OPEC member but also Arab League and Arab Maghreb Union (AMU).

Libya also holds important natural gas reserves which are presently few exploited. 28 billion m3 were produced in 2009, half of which for domestic consumption, particularly in electric production stations. One part of gas is exported to Italy by Greenstream gas pipeline (built by NOC and ENI).

Libya wanted to increase its production from 1.8 million barrels a day to 3 millions up to 2015, further to the civil war they knew in 2011. This country will have to wait in order to re-find a more prosper political climate.


Egypt

Egypt is a major factor in Africa. It is the fifth producer of the continent : almost 740 000 barrels oil in 2010.

Nearly half its reserves are located offshore.

Egypt is not an OPEC member but an OAPEC member (Organization of Arab Petroleum Exporting Countries).

First discoveries appeared in 1908. However, most oil exploited today was discovered in the years 1930 along Suez Gulf. Later, great deposits were discovered in Sinai Peninsula, Suez Gulf as well as in the desert of western and eastern parts of the country.

Abu Rudeis and Ra’s Sudr fields located in Sinai were captured by Israel in 1967 and then given back to Egypt in 1975.

Reserves of the country are estimated at approx 4.2 billion barrels oil equivalent (i.e. one sixth of the continent. 3 billion barrels are crude oil.

Oil production in Egypt reached approx 900 000 barrels a day in the years 1990. Since 1996, the production suffers from a constant drop reaching 700 000 barrels a day in 2005. Since that time, this level of production is almost stable, although it rises slightly these latter years.

egypt oil production

Suez Canal and the 322 km long Sumed pipeline, joining Red Sea, Persian Gulf and Mediterranean Sea, make Egypt to be a strategic point in the Middle East.

sumed

Note that Suez Canal was equipped in 2006, so that super tankers (VLCCs) may be accepted. Suez Canal is one of the seven biggest transit routes of super tankers in the world. 1.6 million barrels a day take this route. Without it, oil tankers should make a detour of 10 000 kilometers passing south Africa.

In 2005, Egypt built 9 refineries able to refine 726 250 barrels crude oil a day (115 465 m3). The most important one is that of El-Nasr, in Suez, able to refine, by itself, 146 300 barrels a day (23 260 m3).

NOC (National Oil Company) in Egypt is the Egyptian General Petroleum Corporation.

In 2007-2008, numerous discoveries increased the production of the country (55 000 additional barrels a day). This essentially allowed Egypt to maintain a production rate at approx 700 000 barrels a day. These discoveries were found in Suez Gulf, Nil Delta, western part of the country, in the desert as well as in the Mediterranean Sea.

Main resources of the country are issued from oil and incomes issued from transit by Suez Canal. The industrial and touristic sector remains finally relatively important in the commercial balance.

A survey reveals that almost 2 billion barrels should still have to be discovered in Egypt, what grows massively FDI (Foreign Direct Investments) such as those of ENI (Italy), RWE (Germany), BP (United Kingdom).

At present, the production reaches, in 2010, 740 000 barrels a day, the domestic consumption amounts to 700 000 barrels a day. Egypt is then a relatively marginal exporter.

Conflict Chad – Sudan:


Chad

Chad became oil exporter in 2003. It discovered deposits in Doba region (south of country). They are exploited by an American consortium comprising Exxon Mobil and Chevron, and also Petronas, a Malay company. As Chad is a land-locked country, these companies had to build an oil pipeline covering over 1000 kilometers to link Doba to Kribi, on the Cameroun coast opening to the Gulf of Guinea.

pipeline doba kribi

As you know, Chad is one of poorest countries in the world with a HDI equal to 0.392, placing it at the 175th position out of 182 countries. In effect, 80 % population lives with less than 80 $ a day, life expectancy is 45 years. So, oil incomes may help this country to become a developed country.

world bank

The World Bank, which co-financed the oil pipeline up to 13 % (with foreign oil companies, the total cost reaches 3.7 billion dollars), imposed the Chadian Parliament that this latter votes a law which supervises the redistribution of the oil benefits by stipulating that, in the state budget, 80 % oil incomes have to be affected to the sectors of education, health, environment, water and infrastructures, 10 % are invested in London on a bank account for the future generations, 5 % for the local development of Doba production region, and 5 % affected to the Chadian government.

Chad, governed since 1991 by Idriss Déby, is a very unstable country politically speaking.

idriss deby

In effect, Chad, the neighbor of which is Sudan, at the East, disposes, between both, of a buffer zone: Darfur.

darfour

This western part of Sudan, as you remember, in 2003, suffered a civil war between the populations which rebelled against the political system of Khartoum, the capital city of Sudan, and then caused an important population movement of Darfur region on the other side of the border, in the Eastern part of Chad. However, Zaghawa ethnics, that of Idriss Déby, supports Darfur rebels. Of course, this is badly considered by Karthoum government, this latter helped in undertaking the coup of Idriss Déby at the end of the years 1980. So, in return, Sudan welcomes Chadian opponents which throw attacks in Chadian territory. It also helped The Union of Chadian Opposition by creating the United Front for a Change, and it is this party which tried to overthrow Chadian government of Idriss Déby in April 2006.

In effect, Khartoum would like to have in Ndjamena a Chadian president more favorable to its interests, i.e. among others, to build an oil pipeline between Doba and Sudanese oil pipelines which lead to Port-Sudan, city on the Sudanese coast, then east, giving to Red Sea, and from there to export oil towards China.

doba port soudan

You have to know that Beijing imports 85 % the Sudan oil production. Both countries are bound by commercial agreements and China supplies, among others, military equipments to Sudan (Russia also) as well as rights of use for weapons production.

Considering these Sudanese calculations, Chad disposes of an American support (as they have their Exxon Mobil and Chevron oil interests), and France, which had helped Idriss Déby in coming to government and which keeps in Chad equipment as well as 1200 soldiers expecting there permanently, in order to try to preserve the political stability in this African region.

As a conclusion, I would say that the Chadian government did not hold its promise towards the World Bank, justice and security having been re-added to the law text and favored to benefit from oil incomes. Clearly, oil incomes allowed to purchase weapons.

Just a detail: the Chadian government only wins 12.5 % oil incomes on its land (the rest goes to foreign oil companies).


Sudan

Sudan, the greatest country of the African continent, has enjoyed for already a few years a high growth (8-10 %). Initially, the country is very poor (classified in 2006 at 150th position HDI), and the government is badly seen by the International Community since the war in Darfur and relative to its political system, especially in the area of human rights.

Indeed, Sudan is classified 5th country of the African continent as proven oil reserves.

Here is a map showing the different oil concessions in Sudan:

oil concessions soudan

Only three of them supply over half Sudanese production. These are exploited by a consortium formed by the Chinese company CNPC (40 %), the Malay company Petronas (30 %), the Indian company ONGC (25 %) and the Sudanese national company Sudapet (5 %). This oil is exported by oil pipeline to Port Sudan.

Oil incomes represent 80 % value of country exports.

Sudan is politically a very unstable country, not only with the conflict in the region of Darfur, but also in the South Sudan region which claims its independence. In effect, Karthoum regime is Arab and imposes the Coranic law of Sharia to the whole country which is constituted of not moslim African ethnics (SPLA = Sudan People’s Liberation Army), which revolt against the government. The civil war caused 2 million dead people. On 9th January 2005 a peace agreement was signed, but in 2010 the political climate is still very strained, as well within the country as with the International Community.


Gulf of Guinea

Conflict between Equatorial Guinea and Gabon

offshore guinee equatoriale gabon

In white, you can perceive understanding on Rio Muni but, as from the river mouth in the Gulf of Guinea, where the stream flows into Corisco bay, there is conflict. Indeed, Gabon requires a visible split up of territorial waters on the hereunder scheme by the green line, and that desired by the Equatorial Guinea in pink.

guinee gabon eaux maritimes

So, there is a disagreement on sea borders. For Gabon, the boarder goes between Corisco archipelagos and Mbanié archipelagos ; and for the Equatorial Guinea, the border includes in its territory the three Mbanié, Cocotier and Conga islands.

In fact, as we know, there are important crude oil reserves in the Gulf of Guinea, near Sao Tomé and Principe. This zone is going to become a major zone of world oil production.

oil areas guinea gulf

Considering the countries instability in the Middle East, American and French oil companies essentially get very interested in Gabon, Angola and Sao Tomé and Principe. In effect, the zone is more politically stable than in the Middle East.

This creates a real dispute. Moreover, each other, Equatorial Guinea and Gabon, granted large zones of offshore oil exploitation to foreign oil concessions which run into each other. Gabon to Golf Oil and Royal Dutch Shell, in the zone delimited in green color on the hereunder map, and Equatorial Guinea to Spanish companies Sepsa and Spanish golf Oil in the pink zone.

accords offshore golfe guinee

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