Prof. E. Kiremire
17 August 2007
opinion
Relatively recently, oil and gas discoveries have been announced in more than ten African countries. These include Uganda, Ghana, Congo-Brazzaville, Angola, Gabon, Guinea-Bissau, Guinea, Sierra Leone, Algeria, Egypt, Cameroon, Nigeria, Tanzania, Zambia, Namibia, Sao Tome and Principe. This is great news for our continent.
I have been following this news with keen interest, which surprisingly, to date, accounts for a colossal 2 million Internet hits plus. There has been excitement both within and outside the countries concerned.
The discovery of oil in Namibia was published by New Era of 13/07/07.
According to the article, the discovery of oil along the Namibian coastline was announced by Dr Khalin Valentine Vladimirovich - a representative of a Russian company Sintezneftegaz Namibia (Ltd) which will invest US$80 million in the vital project.
Clearly, this is very exciting news.
This reinforces the existence of Kudu gas (worth US$1 billion) in the Karas Region. It is estimated that this gas could meet Namibia's energy requirements for the current entire century.
In the case of Uganda, the discovery of oil on the shores of Lake Albert in Bunyoro District by Heritage Oil and Gas of Canada, Hardman Resources of Australia and Tullow Oil of Ireland has attracted wide and varied reactions from across sections of society both within and outside Uganda.
These include government ministries such as Energy, Foreign Affairs, Investments, Finance, etc., as well as quasi government institutions such as Bank of Uganda, Uganda Wild Life Authority, the National Environment Management Authority, just to mention a few.
Public interest in this development has been so great that high ranking government officials that include Vice-President, Prof. Gilbert Bukenya and some ministers have already visited the drilling sites.
In the meantime, the oil companies that have invested heavily in the Ugandan discovery have already started reaping huge financial benefits as their market value has since increased at the stock exchange.
Of particular interest are policy formulation steps that have already commenced. A recent 2-day workshop that was held by government agencies at Windsor Lake Victoria Hotel, Entebbe to review a draft paper on Oil/Gas Policy, among other important issues, covered the future promotion, development, production, transportation, refining, distribution, marketing and sale of oil and gas in the country.
Plans are already underway to build a Uganda-Kenya pipeline at a cost of US$110 million and a refinery to supply fuel for energy production.
Other positive expressions of interest have also come from some sub-regional and regional organizations such as NEPAD and the Pan-African Parliament.
All in all, all of a sudden, Uganda's name has hit the regional and international limelight like a wild fire. Similar excited reactions have taken place in other African countries in which oil/gas have been discovered.
But what is so unique about oil?
The most obvious reason is that oil is probably the most sought-after commodity in the world, even more so than the famous modern-time gold.
About two centuries ago, gold was so highly regarded that European explorers travelled long journeys by ship abroad in its search. This led to subsequent land conquests and occupations.
Today, oil seems to have directly or indirectly taken the place of gold. In fact, it is sometimes referred to as black gold.
As we are all aware, this oil is so vitally important that any price fluctuations especially in the upward trend drastically affects the world economy negatively.
This impact is severely felt by developing nations.
The oil crises of the early and late 1970s (1973 & 1979) that led to world economic recessions are cases in point.
Currently 84% of oil is utilized in energy consumption and production in the form of gasoline, diesel, jet fuel, heating, petrol, liquefied petrol gas, and other fuel oils. The balance (16%) is used for the chemical industry to produce organic solvents, fertilizers, pesticides, pharmaceuticals and plastics and so on.
Another key industrial chemical, sulfuric acid, is obtained as a by-product. Thus, a strong chemical industry is a powerful catalyst for industrialization.
And the economic potential of petroleum is enormous. In actual fact, developed nations have categorized oil as a great security concern. So what is petroleum and how is it obtained?
The name petroleum comes from two Latin words, petra (rock) and oleum (oil). Hence, scientifically speaking, petroleum simply means rock oil or oil from rocks - itself an appropriate term since oil is usually obtained by drilling through rocks.
Petroleum comprises of a mixture of hydrocarbons (a hydrocarbon consists of carbon and hydrogen atoms) with chain lengths ranging from 5 carbons (C-C-C-C-C) to18 carbons (C5H12 to C18H38).
Petroleum hydrocarbons of molecules smaller than C-5 are known as natural gas or natural gas liquids.
Petroleum hydrocarbons with chain length greater than C-18 are known as paraffin wax.
According to a Biogenic Theory, petroleum was formed a long time ago (some 180 - 140 million years) by the reaction of heat and pressure (in the ground) on the organic matter mainly from algae and small sea animals (zooplankton).
Since most of the hydrocarbons are lighter than rocks or water, they drifted upwards through the rocks and in the process some got trapped in the space between rocks and produced reservoirs of petroleum. A bit of petroleum permeated to the surface of the ground and decomposed.
There exist three categories of oil extraction, namely, Primary methods, Secondary methods and Tertiary methods.
The primary methods use underground pressure to recover about 20% of oil. When that oil component is exhausted, then the secondary methods are applied to recover a further 5-10% of oil. Finally, the tertiary methods that employ reduction of viscosity techniques are utilized to recover some more oil.
According to President Museveni, Ugandan oil is of very high quality, with 33 API (American Petroleum Standard) units, a position that places it in the second slot, next to North Sea Oil pegged at 42 API units. Venezuela oil stands at 18 API units.
Apart from ranking oil according to an API index, it can also be ranked according to nations. Thus, in production terms, Saudi Arabia is number 1, followed by Russia (2), USA (3), Iran (4 - OPEC), Mexico (5), China (6), Norway (7), Canada (8), Venezuela (9 -OPEC), United Arab Emirates (10 -OPEC), Kuwait (11- OPEC), Nigeria (12 - OPEC), United Kingdom (13), Iraq (14 - OPEC).
In terms of oil exports, again Saudi Arabia dominates, followed by
Russia (2), Norway (3), Iran (4 - OPEC), United Arab Emirates (5 -OPEC), Venezuela (6 - OPEC), Kuwait (7 - OPEC), Mexico (9), Algeria (10 - OPEC) and Libya (11 - OPEC).
The United States of America (USA) is the greatest importer of oil. It is followed by Japan (2), China (3), Netherlands (4), France (5), South Korea (6), Italy (7), Germany (8), India (9), Spain (10), United Kingdom (11), Belgium (12), Canada (13) and Turkey (14).
It is interesting to observe that the leading importers of oil are simultaneously the most industrialized nations. They include the heavy producers of petrol.
In terms of oil consumption, the USA once again tops the list, followed by China (2), Japan (3), Russia (4), Germany (5), India (6), Canada (7), South Korea (8), France (9), Italy (10), Saudi Arabia (11), Mexico (12), UK (13) and Brazil (14).
The 8-top most non-oil producing countries that consume the World's most oil have also been classified with Japan as number 1, followed by Germany (2), India (3), South Korea (4), France (5), Italy (6), Spain (7) and Netherlands (8).
So, what will be the ranking in oil production in Africa in 2009 when Ghana and Uganda commence their productions? Obviously Nigeria (Africa's oil giant) is number 1, producing 2.2 million barrels per day. It is followed by Algeria No. 2, (2.1 million), Libya 3, (1.8m), Angola 4, (1.4m), Egypt 5, (0.579m), Southern Sudan 6, (0.4m), Equatorial Guinea 7, (0.33m), Congo Brazzaville 8, (0.280m), Gabon 9, (0.237m), Cameroon 10, (82,300), Ghana 11, (72-75,000 potential production), Cote d'Ivoire 12, (32,900), DRC 13(21,090), Uganda 14, (14,000 potential production), and Benin 15, (700).
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