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Analysis: African oil both booms and wanes

The southern African country, which endured three decades of civil war that ended in 2002, has been keen to keep production steady while the continent's other major producer, Nigeria, struggles to fight a continuing armed militant movement in its main oil region, the Niger Delta.
by Carmen Gentile
Washington DC (UPI) Dec 31, 2008
Once firmly atop the list of Africa's top oil producers, Nigeria slipped behind Angola -- albeit temporarily -- during the course of 2008, while other African countries received even more attention from eager foreign investors like China.

Production in Nigeria, whose output once reached 2.5 million barrels per day, dropped below 1.9 million bpd by midyear, with relative upstart petroleum producer Angola assuming the top spot on the continent.

The drop-off in Nigerian production was blamed largely on continuing militant attacks on oil and gas installations in the petroleum-rich Niger Delta. Nigerian officials said production loss in 2008 was estimated at 650,000 bpd, at a cost to the country of almost $68 million a day in lost revenue, adding to the growing woe in the impoverished delta.

That violence at times spilled over into neighboring Cameroon.

Ten oil workers were kidnapped in September off the coast of Cameroon, then subsequently freed by militant groups waging attacks off the coast of the Bakassi Peninsula, a highly coveted oil-producing region that earlier this year was handed over to Cameroon by neighboring Nigeria after decades of dispute.

Militant leader Ebi Dari, who has ties to both the Nigerian and Cameroonian militant groups, demanded in 2008 that Bakassi be given greater autonomy from Cameroon. Some militants even have suggested the region gain its independence from the West African nation.

Armed groups based in neighboring Nigeria roamed the Gulf of Guinea off both the Nigerian and Cameroonian coasts waging numerous attacks in 2008.

Relatively underdeveloped and considered one of the world's most fertile fishing grounds, the Bakassi Peninsula is believed to hold oil riches similar to those of the Niger Delta, which produces an estimated 2 million barrels per day. Militants led by Dari say they are also fighting for compensation for those fishermen forced to leave the territory to make way for future oil development.

Those prospective riches have prompted numerous foreign oil companies in 2008 to inquire into securing the rights to explore the peninsula, though the territory remains relatively undeveloped.

Meanwhile, in Angola, which also endured years of violence and upheaval in its oil-producing Cabinda province, production increased significantly in 2008, reaching the 2 million bpd mark at one point before settling to 1.9 million bpd by the end of the year.

A short-lived spate of violence in Cabinda was quashed by Angolan forces earlier this year, resulting in little loss of oil production and maintaining the relative peace that has pervaded the South African country since the end of its civil war in 2002.

Though Angola's emergence as a regional oil contender is undeniable, some experts warned against just yet anointing it Africa's new petroleum titan.

"Angola is certainly a big upcoming producer," Africa oil expert John Ghazvinian, author of "Untapped: The Scramble for Africa's Oil," told United Press International.

"Although monthly (production) figures can fluctuate," he added, noting that the return to even partial capacity of a few facilities in the delta would return Nigeria to the top spot among petroleum producers in Africa.

In 2008, up-and-coming petroleum producer Sudan offered the United States the opportunity to explore for oil in Darfur, parts of which reportedly have been cleared recently for Chinese exploration by way of government troops and aerial assaults on rebel-held areas.

Sudanese President Omar Hassan al-Bashir said the United States was welcome to explore for Darfur's mineral wealth, which in addition to oil includes copper and uranium, he said.

"We have no problem with them (the United States) coming and sharing it (Darfur's resources) with us, but they want to take it all," said the Sudanese president.

Bashir's invitation appeared more like a political stunt aimed at enticing Washington to end 11 years of sanctions imposed on the country while tribal and ethnic genocide continues at the hands of Sudanese military and state-backed militias.

Other countries, like China, however, appear eager to explore Darfur's potential as part of the growing international race to capitalize on much of Africa's untapped oil potential.

Sudan already is producing about 500,000 barrels of oil per day, two-thirds of which is bound for China, whose oil needs have grown exponentially in the last decade.

Hoping to perhaps bolster the strength of Sudan's relationship with China, Khartoum this year launched an offensive deep into Darfur's rebel-held territory to make room for Chinese oil exploration. At least 16 civilians were killed in the maneuvers, according to the International Crisis Group, a human rights watchdog organization.

While rights groups and certain U.S. lawmakers condemn China's moral flexibility when it comes to oil exploration in Sudan and other African nations, other contend the United States should team up with China in African oil exploration.

"The energy sectors in China and the U.S., and the energy interests of the two countries, are becoming increasingly interdependent," read a report by the East-West Institute. "The traditional view of large powers competing strategically for scarce resources in Africa is outdated and damaging."

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