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Angola overtakes Nigeria as top African oil nation

The Independent

Angola overtakes Nigeria as top African oil nation

 

By Danny Fortson, Business Correspondent
Wednesday, 4 June 2008

Angola has knocked Nigeria off its decades-long perch as Africa’s largest oil producer as militant attacks and strikes take their toll on an industry that accounts for nearly half the country’s economic output.

 

According to Opec, Angola produced 1.87 million barrels per day in April, as opposed to 1.81 million barrels per day in Nigeria – the first time Angola has outdone its prolific neighbour.

Analysts estimate that between 800,000 and 1 million barrels per day of capacity is shut-in in Nigeria, equivalent to nearly a third of its total production capacity. The idle oil platforms and pipelines represent billions of daily losses for the Nigerian government. Since Nigeria reached a recent production peak of 2.5 million barrels per day in 2005, militants have crippled the industry by destroying pipelines, pirating oil and attacking foreign workers. The resulting cuts have helped to push the oil price to its recent record highs.

“This is very much the result of the shut-ins and unrest in the Delta. They have suffered very badly, but they ought to be able to restore output to [2005 levels] if the oil fields in the Delta operate normally and they can repair the pipelines that have been damaged,” Julian Lee at the Centre for Global Energy Studies said. “But there is no real sign that that is going to happen any time soon.”

Royal Dutch Shell, the largest foreign operator in the country, still has 156,000 barrels shut-in due to militant activity.

The Nigerian government further soured sentiment last month by requesting $1.9bn (£970m) in back taxes from Shell and Exxonmobil on contracts that were struck in the 1990s, when the oil price was a fraction of what it is today.

Angola, meanwhile, has increased average production from about 1 million barrels per day in 2005 to 1.87 million today. The country has less onerous rules governing bidding for exploration blocks and the building of projects. Several major discoveries, most of which are in deep water far offshore – and thus less susceptible to attack – have come onstream in recent years. The French giant Total is the largest player in the country, though BP, ExxonMobil and ChevronTexaco have also ploughed billions into the country in recent years.

http://www.independent.co.uk/news/business/news/angola-overtakes-nigeria-as-top-african-oil-nation-839690.html

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