17 april 2009 ricardo silva african petroleum resources: the chinese challenge and what to do about...
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17 April 2009
Ricardo Silva
African petroleum resources:
The Chinese challenge and what to do about it
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Historical evolution
27 August 1859 – Drake’s well• Titusville, Pennsylvania• 69 feet• 25 bpd
World population 1850:• 1,262,000,000
o Africa: 111,000,000o Asia: 809,000,000o Europe: 276,000,000o North America:26,000,000
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Historical evolution
World population (millions)
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
1850 1950 2008
World
Africa
Asia
Europe
Northern America
Oceania
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Historical evolution
Life expectancy
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Historical evolution
Contribution from oil & gas• Energy:
o Machinery: consumables, food production;o Heating, cooling, lighting;
• Raw materials for production of:o Plastic;o Fertilizers;o Pesticides;o Synthetic fibers;o Etc.
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Post-War years
Growth in the importance of oil:• Reconstruction;• Modernization;• Expansion of automobile use;• Luxuries;• Etc.
Developing nations:• China, India, Brazil...
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Post-War years Statistics:
• 1000 barrels / second;• Consumption is 3 times higher than
discovery;• Peak in discoveries = 1960;• Production peak?
Most populous nations:
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
China India USA Others
Population
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Post-War years
World energy use
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Why Africa?
USA• 2007: 21% of US petroleum imports;• January 2009: 54,242,000 barrels of oil;• LNG Projects.
World• 12% of World oil supply;• 10 million bpd;• Potentially 30% share; • Gulf of Guinea producing more than Saudi
Arabia in 10-years’ time?• 8% of World gas reserves;• Algeria supplies 25% of European
consumption;
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Why Africa?
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Why Africa? Oil and gas nations
• Algeria;• Egypt;• Libya;• Chad;• Sudan;• Nigeria;• Cameroon;• Equatorial Guinea;• Gabon;• Ghana;• Angola;• ...
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Why Africa?
Africa’s advantages• Open acreage;• Increased security of offshore oilfields;• Lower level of resource nationalism;• Relative stability;• Lower transport costs and risk of
disruption;• High quality oil;• Huge unexplored resource deposits;• ...
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Who’s who of African oil
First comers• Gulf Oil• Shell• BP• TotalFinaElf• Exxon Mobil• Marathon Petroleum• ...
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Who’s who of African oil
New comers• Petrobras• CNPC• Gazprom• Sinopec• Tullow Oil• Petronas• ONGC Videsh• RocOil• StatoilHydro• Woodside Petroleum• ...
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US presence
What the US offers:• Around 1/3 of:
o The USD 20 billion invested in African E&P since 1990;
o The USD 50 billion estimated to be invested until 2010.
• AFRICOM;• Western-style democracy and
institutions;• Disease control programs;• ...
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US presence
What the US expects:• Oil…
o 25% of US imports
• Commitment to Western ideals and principles;
• FCPA compliance; • Liberalized access to reserves;• ...
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Chinese connection What China offers:
• Low interest loans and debt relief;• High bonuses;• Technology;• Commitment to infrastructure (railroads,
roads, refineries, pipelines, etc.);• China-Africa Cooperation Forum;• USD 32 billion in trade, growing at an annual
rate of 50% since 2002;• Health assistance;• Cheap commodities;• Joint ventures;• Military assistance (peacekeeping);• ...
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Chinese connection
What China expects:• Hydrocarbons (16% from Angola in
February 2009);• Increased political influence;• Export market for Chinese goods and
equipment;• Export market for Chinese labor;• ...
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Chinese connection
How strong is China’s influence?• Low production by Chinese NOC;• Low interest of most acreage held by
Chinese companies;• Low return on high “government
investment”;• Lower level of high-tech E&P
knowledge;• Infrastructure quality issues;• Human resources problem;• ...
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How to deal with China Increase political, economic and
military involvement; Promotion of energy cooperation; Greater contribution to “local content”; Increase added value; Increase technology transfer; Cultural awareness; Cross-sector approach; Western-Chinese dialogue to improve
African institutions; ...
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