CAPE TOWN: The United States’ intention to increasingly import oil from Africa and demand from China offer the world’s poorest continent an enormous growth opportunity, a top US politician said on Wednesday. But ensuring the safety of its people and investors was essential to secure the potential investments, Rodney Ellis, US senator for Texas told an Africa Oil conference.
“The global marketplace is ripe for African countries to fill an important need, become an important player in the world energy market, and reap the deserved profits from these services,” said Ellis, who also serves on the US National Commission on Energy Policy.
Africa holds 8 per cent of the world’s proven crude oil reserves and provides about 10 per cent of production, led by Nigeria, Angola, Sudan and Equatorial Guinea.
Nigeria is the 11th largest oil producer in the world with 2.5 million barrels per day (bpd) production and reserves that are expected to expand from 32 billion barrels to 40 billion barrels by 2010.
Angola plans to raise production to 2 million bpd by 2008.
Ellis said the US, the world’s biggest consumer of oil was looking to Africa to help diversify its energy supplies, given the continued unrest in its main supplier, the Middle East.
“West and central African oil producers already play a significant role ... but the region will be pushed even further towards the centre of US foreign policy considerations as world political tensions remain high,” he said.
“They (US government) are increasingly looking to Africa as the answer to replace the Persian Gulf as America’s foreign source of oil.”
The US accounts for 25 per cent of world oil consumption, with demand expected to grow to 28 million bpd by 2025 from about 20 million barrels now, making its strategy on imports crucial to the global industry.
President George Bush has said the country plans to replace over 75 per cent of its oil imports from the Middle East by 2025.
Ellis said forecasts showed the US would invest more than $10 billion a year in oil activities in Africa over the next decade, and source 25 per cent of its oil imports from Africa by 2015, compared to 16 per cent at present.
The continent offered political advantages compared to the Middle East, given that much of West Africa’s oil was offshore and insulated from domestic political and social turmoil.
“The global oil system is under considerable strain with virtually no spare capacity to quickly increase production,” said Ellis.
“A recent study by the National Commission on Energy Policy projected that even a slight, temporary 4 per cent ... global shortfall in daily supply could result in a 177 per cent increase in the price of oil.”
China would also boost demand for African oil. Trade between China and Africa had doubled to $18.5 billion from 2002 to 2003, jumping to $32.2 billion towards the end of 2005.
Most of this growth was due to increased Chinese imports of oil from Sudan and other African countries, Ellis said.—Reuters
