In their first newsletter, I am particularly interested by the contribution of Alex Vines OBE, director of regional and security studies at Chatham House, in their maiden issue. For those of you unfamiliar with it, Chatham House is the British equivalent of the American Council on Foreign Relations. In his write-up, he explores the once-again active race to tap comparatively healthy oil reserves in Africa. Back for another round are the usual suspects--Europe and the United States--but they're now joined by the likes of China, India, and even South Korea. Here are some excerpts:
Africa currently supplies about 12 percent of the world’s oil, boasts significant untapped reserves and has surpassed the Middle East as the largest regional supplier of crude oil to the United States. Individually, Nigeria is America’s fourth largest oil supplier, Angola is the sixth and Algeria is the seventh. Recently the National Intelligence Council estimated that the US imported 18 percent from sub-Saharan Africa, almost the same amount as Saudi Arabia. This amount is expected to increase to 25 percent in the next ten years. Africa offers diversification away from Middle East oil for both the US and Europe and also access to new gas reserves.The Prize never stops being such, it seems. At any rate, the other features are well worth a read if their topics interest you. Certainly, they help me improve my understanding of what is happening in Africa given our in-house expertise:
It is not just the US and Europe that are vying for access to African oil. China’s continued economic growth, a key factor in the country’s stability and the Communist Party’s legitimacy, requires the import of substantial supplies of energy, minerals and other materials. China’s leaders have concluded that it is too risky to just compete on the open market after the UNOCAL debacle in 2005, in which the US blocked the sale of the Union Oil Company of California to the Chinese National Offshore Oil Corporation(CNOOC) before approving a merger with the American multinational Chevron. Diversifying energy sources is also seen as important for spreading risk. China’s 2003 National Energy Strategy and Policy remarked that ‘oil is the key factor in the creation of public wealth, and also one kind of most important commodity infuencing (sic) the global political pattern, economic order and military operations.’
Having first become a net importer of oil in 1993, in 2003 China became the world’s second largest consumer of petroleum products behind the United States, and the third largest importer. Although some 55 percent of African oil and gas went to Europe and the US in recent years and only 16 percent went to China this is changing. China is projected to surpass the US in 2015. China currently receives around 33 percent of its imported crude oil from Africa. In March 2008, one senior Chinese official said Beijing aimed to increase this figure to 40 percent over the next five to ten years.
Nine out of ten of China’s top trading partners in Africa in 2008 were oil producing states, the exception being South Africa. The continent’s value of Chinese oil-company investment in Africa amounts to 8 percent of international oil company (IOC) investment and only 3 percent total oil company investment there. Chinese companies currently only produce in Sudan (225,000 barrels a day) but Sinopec’s purchase of Addax for $7.6 billion in 2009 has bought China access to current Nigerian oil production. Angola was in 2009 the second largest supplier of crude to China after Saudi Arabia.
Introduction: African Challenges and Opportunities|
Head of LSE IDEAS Africa International Affairs Programme
Prospects for Growth in Africa: Learning from Patterns of Long-Term Economic Change|
Assistant Professor in International Studies, Simon Fraser University
Political Stability: Crucial for Growth?|
David Davies of Llandinam fellow, Department of International Relations,LSE
Emerging Powers and Africa|
Senior Lecturer in International Relations, LSE
African Security and the Securitisation of Development|
Head of Africa Programme, RUSI