African oil is assuming greater global strategic influence almost by the week. It is cheaper to extract, better in quality, nearer to its markets and there is more of it than oil from other regions. Can Africa bring some stability to a volatile global market?
Oil appears to have reached an endgame of sorts with prices remaining high, despite one or two false dips in July. It is certain that demand will remain unabated, but can Africa increase its output to shore up an increasingly meagre world oil supply? If so, what is Africa’s potential to quell this valid market anxiety – both in the short term and long term?
There is no doubt about the energy potential of the sub-Saharan African region in terms of volume and quality as well as its geographic advantage in terms of proximity to the mainstream market and the world’s wealthiest energy consumers. However, the question remains – just how much oil is there in Africa?
Since 2000, one-third of the world’s new oil discoveries have taken place in Africa. Of the 8bn barrels of new oil reserves discovered in 2001, 7bn were found in the continent. From 2005 to 2010, 20% of the world’s new production capacity is expected to come from Africa. These statistics set the stage for a competition between major powers that is reminiscent of the 19th-century scramble for colonisation. Despite this, Africa has only 10% of global oil reserves and it is unlikely to replace the Middle Eastern oil supply. Therefore, what lies behind the hype about Africa in the corridors of Washington, Beijing and Brussels?
Source: IC News Online