Oil Policy in the Gulf of Guinea Friedrich-ebert-stiftung

Africa is estimated to possess somewhere around 7 percent of the world’s proven crude oil reserves, according to the Energy Information Agency. It may have up to 24 billion barrels in total proven and unproven reserves. West Africa is generally viewed by the oil industry as one of the world’s leading deepwater offshore oil zones, with 633 fixed platforms, 13 floaters and 20 storage and offloading vessels. By 2008 a further 159 fixed platforms will be installed, drilling more than 700 wells. Overall oil production is expected to rise from 3.8 million barrels a day in 2001 to 6.8 million by the year 2008. In order to achieve this near doubling of production, it will be necessary to find massive foreign direct investment. According to the American Petroleum Institute, $10 billion in capital investment will be needed for every one million barrel a day increase in production. About $52 billion is going to be invested in African deepwater drilling by the year 2010. “Over $50 billion,” announced a recent report, “the largest investment in African history, will be spent on African oil fields by the end of the decade.” 1 Who are the actors that will make this massive investment? Are they the same ones that have traditionally dominated the sub-region, or have new actors replaced them? How have fundamental changes in the structure of the international system since the end of the Cold War affected patterns of direct foreign investment in the Gulf of Guinea? How have the privatizations of European national oil companies affected their strategies in former colonial spheres of influence? What role is going to be played by the African national oil companies in this new “Scramble for African Oil?” 2 Changing Patterns of Foreign Direct Investment in the Oil-Economies of the Gulf of Guinea