African Energy Industry Takes Off

Posted on Sep 16, 2011 in Africa

The African oil industry is booming according to DiazReus' Michael Diaz, Jr.

In an interview with Pipeline Magazine, Diaz Reus Managing Partner Michael Diaz, Jr., talks about Africa’s booming energy industry. The landscape is changing quickly in Africa with the entry of smaller players (aka “minnows”) into the market and the rapid emergence of China as a major player on the continent. Ghana, Kenya, Nigeria and Angola have become areas of intense interest.

Some interview highlights:

  • “Today, oil and gas companies in Africa number more than 100 and come from 20 countries – a far cry from a decade ago, when this industry was dominated by a few major western companies. Africa has witnessed an immense multiplication of competition, with Chinese and Indian companies joining European and US majors.”
  • “The oil and gas industry is slowly moving from centralised state control, to becoming more engaged with privatisation, although so far progress has been uneven. Most foreign companies enter into partnerships with governments, but such partnerships cannot be taken for granted on a continent where the quest for natural resources has fuelled decades of violent conflict. Genuine partnership is difficult when resource-rich countries view foreign drilling companies as adversaries, seeking unfair contracting agreements.”
  • “We have witnessed first-hand China and India becoming among the most active foreign oil and gas players on the African continent. This has to do with the search for more secure oil supplies in the face of static, if not declining, domestic oil production in both China and India.”