West African nations critical to US energy security

Jul 22, 2004 02:00 AM

The West African nations of the Gulf of Guinea are critical to US energy security and could one day provide the United States with up to 20 % of its energy needs, says energy expert David L. Goldwyn.
In a testimony on July 15 before the Senate Foreign Relations Committee's Subcommittee on International Economic Policy, Export and Trade Promotion, Goldwyn, a former US assistant secretary of energy for international affairs, said the nations of the Gulf of Guinea -- Nigeria, Chad, Equatorial Guinea, Gabon, and Sao Tome and Principe (along with Angola) -- are key contributors to the US energy sector and to the diversity of the global oil supply.
"Today, oil exports from the countries in the Gulf of Guinea provide us with 13-14 % of the oil we import. While OPEC countries cut production, countries from the Gulf of Guinea provided one out of every four barrels of new oil that came on the market last year," he told the lawmakers.

Goldwyn, currently president of the international business-consulting firm Goldwyn International Strategies, was called to brief senators on the state of US-Africa energy relations. He reminded the lawmakers that the Gulf of Guinea is geographically much closer to US refineries than the Middle East. As an added benefit, he said, the United States enjoys "good relations with all of the exporting countries" in that region.
"In the future," Goldwyn predicted, "if the investment and security climate remains stable, the US could draw 20 % of its imports from this region." The region's share of global oil supply, he speculated, will rise from 4 % this year to nearly 6 % by 2007.

Increased exports from the Gulf of Guinea, he said, are allowing the United States to reduce its dependence on Middle East crude. Furthermore, he explained, the non-OPEC nations in this area -- all of them except Nigeria -- provide a counterweight to OPEC's monopoly power. Besides producing thousands of barrels of crude oil, the Gulf of Guinea region is also a rising gas power as well, he said.
"If current projects under development are brought to fruition, Nigeria, Angola and Equatorial Guinea will increase their liquefaction capacity from 9 mm tons (M/T) per year to nearly 40 mm tpy," he said.

These nations, he added, are rapidly growing as suppliers because they have opened their economies to Western investment.
Even though most of the world's oil reserves are closed to international oil companies, the Gulf of Guinea has offered nearly 15 % returns on investment and is expected to attract $ 30 bn-$ 40 bn in investment this decade. But "the very openness of these nations to Western investment can make them a potential target for terrorism," Goldwyn warned.

He identified Nigeria and Angola as the region's most important energy suppliers. Nigeria produces 2.12 mm bpd and exports 1.85 mm bpd. It provides 8.25 % of US imports and it is planning to expand to 4 mm bpd by 2009, he said.
Angola produces 900,000 bpd and exports 866,000 bpd, providing 4.6 % of US imports, and is planning to reach 2 mm bpd by 2009. He identified Angola as the ninth largest supplier to the United States and the third largest non-OPEC supplier outside of the Western Hemisphere.

The other countries in the Gulf are significant as well, Goldwyn said. He cited estimates that in 2003 Cameroon, Chad, Equatorial Guinea and Gabon exported approximately 500,000 bpd in aggregate, with 221,000 bpd going to the United States.
"Chad is beginning oil production this year. Equatorial Guinea will grow as a supplier of gas and light sweet crude for US markets. Gabon and Cameroon are on the decline," he said.

From a geological and investment perspective, the region's prospects are "quite bright," he said.
"New technologies, competitive investment frameworks and the availability of reserves for exploration by international oil companies have produced outstanding results, and much of this oil is the kind of low-sulphur crude oil that US refiners need to produce gasoline that meets our environmental requirements," he explained. By 2010, he forecasted, these nations could add 2 to 3 mm bpd of oil to global oil supply, an increase from 3.4 mm bpd to 7.4 mm.

Source: United States Department of State
Alexander's Commentary

A Future?

After a long editorial silence, it is time again for a comment on world affairs.

Whilst reading through the m

read more ...
Support Our Work
« November 2014 »
November
MoTuWeThFrSaSu
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

Register to announce Your Event

View All Events