Hector Igbikiowubo
22 July 2003
Companies of United States of America (USA) origin are pouring billions of dollars into West Africa as prolific oil finds draw investment to a continent usually of little economic significance for Washington, the US capital.
U.S. President George W. Bush, himself an oilman, concluded his week-long African tour last week Saturday in Nigeria, Africa's biggest oil producer, which delivers premium crude oil high in gasoline content for American refineries.
The Middle East has long been a major source of oil for the United States but some in the U.S. administration believe Washington could lessen its dependence on the Arab world by harnessing West African oil reserves.
"We are looking at a 2005 estimate that 20 percent of our oil imports will be coming from Africa, and that's also going to grow rapidly and markedly in the years after 2005," says Walter Kansteiner, the top State Department official on Africa.
Other estimates suggest African oil supply to the United States could rise by 2015 to as much as 25 percent, from about 15 percent now. Africa's oil belt stretches from Angola in the southwest to the Island state of Sao Tome and Principe on the Equator.
Chad, one of Africa's most impoverished nations, is set to join too later this month when an ExxonMobil led consortium begins to pump crude there in a multi-billion dollar project.
Apart from landlocked Chad, much of the investment by U.S. companies in African oil is in offshore areas. New reserves have been found in deep waters far from violent zones like Nigeria's Niger Delta region, which recently has been plagued by banditry by groups demanding a share of the oil windfall.
Industry analysts say a factor in favour of West Africa is its relative proximity to U.S. markets. Oil shipments take less than half the six weeks which those from the Middle East need to reach U.S. shores.
But human rights groups criticise the lack of democracy and accountablity in the region, which they say means the petro-dollars will not benefit the people.
New entrants into the oil sector, such as Angola and Chad, have recently pledged to be more open and accountable with their oil bonanza.
If that happens it will be a far cry from Nigeria's experience. The oil boom is regarded in some quarters as a curse because of the corruption and ethnic rivalries it has bred.
While U.S. oil companies are raising their production in Nigeria, analysts believe the country's membership of the oil exporting cartel, the Organisation of the Petroleum Exporting Countries , will constrain its output capacity.
"The OPEC quota is a factor that could slow the rate of oil production capacity growth in Nigeria," said James Burkhard, an analyst in African energy at the Cambridge Energy Research Associates in Boston, Massachusettes.
That constraint does not exist for Angola or other producers in the region, Burkhard said.
Within Nigeria, there is strong suspicion that U.S. design is to lever it out of OPEC and Bush could put pressure on President Olusegun Obasanjo .
U.S. analysts disagree. "I don't think Nigeria would ever leave OPEC. They have too much to gain, because it is one of the few places that they sit at the table," says Sarah Emerson, analyst with Energy Security Analysis Inc in Boston.
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