Article from: OGEL 3 (2006), in Editorial
The world energy demand is projected to increase by 71% from 2003 to 2030, and oil remains the dominant energy source according to the International Energy outlook, June 2006. According to Chevron/Texaco statistics:
- The first trillion barrels of oil was used in 125 years while the next trillion will be used in 30 years
- The world consumes 2 barrels of oil for every barrel discovered
- The number of cars in the world will increase by 50% in 2030
- The world will in 20 years consume 40% more oil than it does today
The implication of the above data coupled with the problem of security of supply especially in the Middle East which holds about 61.9% of the world's total oil reserves, is that consuming nations will continue to explore for new supply sources. This need for new supply sources of oil has placed the whole of Africa especially the Gulf of Guinea under the lens of IOCs as Africa currently produces about 10% of the world's oil output. Improvement in offshore technology for oil exploration and production has also attracted much attention to Africa. The importance of African oil to the world economy especially large consuming nations like US, China and India is driven by issues of security of supply and the fact that most of the new discoveries are offshore, making transportation through the open sea easier, and reduces skirmishes with local communities; coupled with the fact that the oil generally has low sulphur content making refining easier and providing large profit margin.
Thus the continent especially the Gulf of Guinea has become the centre piece of international oil and gas exploration and production activities; Africa today is therefore on the cusp of a large oil boom spanning the Gulf of Guinea, up to Libya on the Mediterranean, attracting an annual investment of over $100 billion to the petroleum industry alone; there are also projections for more discoveries in countries lying within the Central and East belt of Africa. Its mineral wealth also spans the South and the North of the continent presenting good opportunity for Africa's economic growth and development.
Again Africa holds within its bowels the following resources:
- 50% of the world's gold reserves are in Africa,
- 25% of the world's uranium resource are in Africa
- 95% of the world's diamond are in Africa
- 33% of chrome reserves are in Africa
- 33% of cobalt is in Africa
Africa has as a result attracted about 15% of total global investments for mineral exploration. Africa has therefore become an important investment destination especially in the area of natural resources. The current high oil, mineral and commodity prices creates a unique opportunity for Africa to use these resources and the current attention being paid to it by investors, IOCs and countries alike to improve its economy, make it more investor friendly, and tackle the poverty of its people, as a way of remaining relevant in its march to becoming the world's future energy hub. Oil and minerals account on the average for more than 50% of the GDP of most African countries, hence this period offers Africa the opportunity of also mitigating most of the anti-investment risks that plagues the continent, to enable it continuously tap from a large pool of global investment capital that will help it turn its oil wealth into post oil economies.
It is in the light of the above issues that this OGEL Special Feature on Africa is presented. This special feature is a collection of articles on the oil, gas and mineral industry in Africa dealing with such issues as; the role of the African Petroleum Producers' Association, the promotion of petroleum expertise in the continent, and issues of energy financing in Africa. A host of other issues rest on Algeria's new hydrocarbon laws, and the OHADA (Organisation for the Harmonisation of Business Laws in Africa), including ways and manners of dealing with community issues in petroleum and mineral development in the continent. The special feature also offers a recipe on taxation in the African petroleum industry including views on Nigeria's draft mining bill. There is no doubt that the collection of articles will serve as OGEL has continuously done, a reference point in the petroleum and minerals industry in Africa.