Oil boom has fuelled fantastic economic growth in Equatorial Guinea
Malabo, the capital of Equatorial Guinea, a tiny West African nation of fewer than 500,000 people, has been
transformed. Office buildings have shot up, hotels and banks have opened, and foreigners -- once a novelty in Malabo
-- now cram the town's fancy new restaurants.
The source of this economic boom is on the bottom of the ocean. Over the past decade, foreign oil companies have found at least 500 mm barrels of high-grade crude oil in the country's waters. Production has jumped from just 17,000 bpd in 1996 to more than 220,000 and could grow another 50 % within three years.
The oil boom has fuelled fantastic economic growth -- 65 % last year, down to an estimated 25 % this year -- and
pushed annual per capita GDP from $ 800 seven years ago to more than $ 2,000 today.
Chad, one of the poorest countries in the world, will soon start pumping more than 200,000 bpd of oil through a $ 3.7 bn, 1,070 km pipeline -- Africa's biggest-ever infrastructure project -- that transverses Cameroon.
Driving the oil rush is Washington's search for reliable oil suppliers outside the Middle East -- a search made more urgent in the wake of this month's terror bombing of an oil tanker off the coast of Yemen. European companies such as TotalFinaElf and Shell have long been players in the region but leading the new charge are US giants ExxonMobil and Chevron and independents such as New York-based Amerada Hess. American firms have been particularly aggressive in wooing new producing countries like Equatorial Guinea and can tap their experience in deep water drilling in the Gulf of Mexico.
West African oil is low in sulphur, which makes it easy to refine. Because most of it lies offshore, foreign oil
companies don't have to deal with locals beyond a few government officials and hired labour. Transport is easy too:
The oil fields sit a direct tanker trip across the Atlantic from Europe or America's east coast, with no annoying
Suez Canal or Gulf to navigate.
As Africa supplies more of America's oil needs -- one Washington think tank expects Africa's share of the US market (including oil from North Africa) to grow from 15 % today to 25 % by 2015 -- there has even been Washington gossip, denied by the State Department, that the US will build a military base in Sao Tome to protect its growing interests in the region.