If you're following the global energy picture closely, you
know that Brazil's deepwater Santos Basin has
captured the heartof oil and gas lovers everywhere. From
what I can see, that's not likely to change quickly. But
there are other parts of the world that have made energy
aficionados sit up and take notice as well.
Of course, there's the U.S. Gulf of Mexico, which, when
the rigs were tugged to deeper waters, reawakened and began
to
yield bigger discoveries, including a "giant" find
earlier this month by a
BP -
led consortium(NYSE: BP). But there's also another active
area: parts of sub-Saharan Africa. This prolific area
includes such countries as Nigeria and Angola, two nations
that appear headed in different directions in the handling of
their energy gifts.
Nigeria on the MEND
Nigeria is a conundrum from the
oil and gasindustry's perspective. For years it's been
the continent's largest producer, a purveyor of light, sweet
crude, which is sought after because it's relatively easy to
refine into gasoline and diesel. And for now, it ranks as the
fifth largest exporter of oil to the United States.
The problems there are political and military. Succinctly,
most of the nation's oil comes from the Niger Delta, and the
tribes that are indigenous to the delta have been pretty much
precluded from the nation's energy spoils in favor of those
with more political clout from other parts of Nigeria.
And so, primarily through an organization called the
Movement for the Emancipation of the Niger Delta (MEND), the
local tribesmen have taken to conducting regular attacks on
the installations
of companies like
Total (NYSE: TOT),
ExxonMobil (NYSE: XOM), and
Shell (NYSE: RDS-A). At the same time,
they've kidnapped hundreds of oilfield workers and made a
regular practice of blowing up pipelines. Â
As a result, Nigeria's production has fallen to about 1.7
million barrels a day from 2.6 million barrels as recently as
2005. That's catastrophic for a country that receives 80% of
its government revenue from oil. And it hasn't helped
citizens of the delta, who remain beset by squalid
conditions, including substandard roads, understaffed
schools, and a general lack of such other basic amenities as
running water and electricity.
The continent's rising star
And then there's Angola, which clearly is
headed in a different direction. Located toward the south
of Africa's West Coast, Angola is recovering rapidly from a
civil war that raged there from 1975 to 2002. And the
recovery is hardly superficial. It's allowed Angola to
surpass Nigeria as Africa's top energy producer. Indeed,
because of its steadily improving economy, the country, which
was long a Portuguese colony, is attracting a stream of
workers and professionals from Portugal -- probably between
60,000 and 100,000 during the past five-year span.
And while Nigeria continues to struggle economically as
its production slides, Angola's gross domestic product has
expanded by more than 10% annually since 2004, despite an
unemployment rate that remains high. But for those of us with
interests in energy, it's noteworthy that Angola just might
be structured offshore much like Brazil's Santos Basin. If
that's the case, you'll likely be reading about sizable
offshore discoveries, like those made by
Chevron (NYSE: CVX) and
Marathon (NYSE: MRO) during 2009, for years
to come.
Foolish takeaway
How, then, should an investor with a penchant for
energy play the
expanding African scene? While all the companies
mentioned above are solid, unless your portfolio is brimming
with various types of oil and gas stocks, I'd keep it simple
and focus on ExxonMobil. The biggest of Big Oil is working in
all the spots mentioned, and it unfailingly goes about its
business with maximum efficiency.Â
For related Foolishness:
ExxonMobil Goes Back to Alaska
Big Oil's Possible Putin Peninsula Partnerships
An Oil Company You Should Watch
This article was originally published as
African Oil: And the Winner Is …on
Fool.com
Copyright © 2009 The Motley Fool, LLC. All rights
reserved.
|