ABSTRACT
Africa is abundantly endowed with oil, gas and other energy resources. Exploration of these resources in the continent can be traced to early 1900; however, commercial discoveries were only recorded in the 1950s. In the 1970s consuming countries relied on oil from the Middle East for major industrial and domestic activities, but recent events in the Middle East have necessitated the shift of activities of IOCs to oil bearing areas in Africa. A hot spot in the region is the Gulf of Guinea, which is estimated to have 5-12 billion barrels of crude oil. The continent is technologically backward; therefore oil and gas exploration and exploitation depends on external entrepreneurial initiatives. Experts are of the view that the continent at current levels of production accounts for 10 per cent and 8 per cent of global oil and gas reserves respectively. Global interest in the industry has steadily increased, accounting for the expansion in crude oil production from less than 1 mmbd in the 1950s to well over 10 mmbd in 2006. The degree of contribution of each country varies, which in part determines the different levels of inflow of capital into the upstream sectors of the region. The industry in each of the producing countries presents unique opportunities and challenges: in the case of Nigeria it is observed that the terrain covers land, swamp, shallow continental shelf and Deep Water. Nigeria, Libya and Algeria have long been associated with hydrocarbon production and also belong to the OPEC family. Egypt, on the other hand, is actively involved in the African Petroleum Producers Association (APPA). In recent years Angola, Sudan and Equatorial Guinea joined the ranks of oil producing countries in the region. In view of the diversity of the continent, it can be contended that the political economy of the oil and gas industry in Africa covers a broad spectrum, with each shade of the spectrum exhibiting distinct characteristics which demand thorough analysis. Nigeria serves as the primary focus of the discussion; however, it can be posited that contextually the various oil and gas industries in the continent have political, economic and social/cultural links. The formation of APPA is an eloquent attestation of these links. In view of these relationships it would be necessary to briefly examine the upstream activities of selected
countries, namely Algeria, Libya, Egypt and Angola, in order to establish basic characteristics in the evolutionary and operational patterns of the oil and gas industries in Africa. Such an analysis would provide an opportunity to estimate the potentialities of the various industries and the underlying political forces that shape them.
