Interest in African Oil Surges
by: Andrew Schneider, May 13, 2011 3:05:00 pm
Sub-Saharan Africa is hardly a new source of U.S. oil imports. Exxon Mobil, Chevron and Shell have been working in Nigeria for decades. In fact, that country recently passed Venezuela to become America’s fourth-biggest supplier of foreign crude.
But Fred Enochs, a Houston-based partner with private intelligence firm TD International, says Africa is poised to open up in a big way.
NASA Space Shuttle Overflight photo of the Niger Delta. North is on the left.
“You’ve got places like Ghana and Cameroon along the west coast all the way down to Angola. You’ve got, now, it looks like possibly good oil and gas reserves coming up the eastern side from Mozambique all the way up. And then you’ve got some inland areas, Uganda and the Congo area, that they believe are also extremely rich with oil and gas reserves.”
The risks of such investment remain high. The Ivory Coast is only the most recent reminder that political instability can be just as big a problem south of the Sahara as north of it. Corruption is endemic in the region. Then, as in any corner of the global economy, there’s the China factor.
“The Chinese, as a national policy, want to garner and gather as much oil and gas reserves, as well as other commodities, as they can. You’ve got to have an understanding of that’s their goal, you know you’re going to competing with them in a lot of these areas.”
Enochs says, though, that the payoff for investing in such countries is potentially higher than in the more developed plays of the Mideast and Russia.