Analysis: Unrest curtails Africa oil

Petroleum-rich Nigeria led all of Africa's oil-producing states in two crucial categories in 2006: barrels produced per day and violence against foreign energy firms.

The latter is a distinction the West African nation will likely want to decline, though one it won't shake any time soon.

Nigeria's year in energy went out with a bang, literally, when militants detonated twin car bombs in the country's oil-producing hub earlier this month followed by yet another round of attacks on foreign installations by the Movement for the Emancipation of the Niger Delta, a militant group seeking an equitable distribution of the country's oil wealth so tens of millions of Nigerians might benefit from 2.5 million barrels being produced each day.

The leading foreign firm in Nigeria, Royal Dutch Shell PLC, appeared to acknowledge the increasing inevitability of the attacks that numbered in the dozens in 2006 by deciding this week to evacuate all family members of foreigners working in the country.

Shell installations have been the primary target of numerous MEND attacks this year that, according to experts, robbed Nigeria of anywhere between 25 and 50 percent of its production capacity.

"It's (Nigeria) is an ungodly mess," Robert Ebel, chairman of the energy program at the Center for Strategic and International Studies, told United Press International earlier this year, an assessment that has only worsened with the mounting attacks on oil interests. "I don't see any solution in the near future."

Nigerian President Olusegun Obasanjo pledged to crackdown on the militants in 2006 and institute real social and economic reform, neither of which materialized on a grand scale.

While the outlook for ending the violence hampering the oil industry in Nigeria appears dismal, nearby Central African nations are reportedly slowing down production except for Chad.

According to a report by the Bank of Central African States released in June, production levels in five of the six nations in the Central African Economic and Monetary Community will drop from 59.3 million tons in 2006 to 50.6 million tons in 2009 due to an "absence of any new discoveries."

Chad is the only country expected to increase production in the coming years, said the bank report, with levels increasing to 8.6 million tons in 2007. Levels then are forecasted to level off at 7.7 million tons by 2009.

Meanwhile, Chadian neighbor Sudan, with the support of Nigeria, inched closer to gaining full-scale recognition as the world's next great oil producer by becoming a member of the Organization of Petroleum Exporting Countries.

In 2006, Nigeria held the presidency of the global oil cartel and nominated both Sudan and Angola to join its ranks. If either were accepted, it would mark the first time the world's most exclusive oil fraternity would open its doors to new members in more than 30 years.

Sudan jump-started its oil machine in 1999, when it began exporting crude oil. That same year, it recorded its first trade surplus. That increased oil production helped Sudan raise gross domestic product growth to 8.6 percent in 2004.

In that short time, Sudan was given observer status in OPEC and now appears poised in the near future to become a voting member of the group.

Sudanese oil got a big boost in 2006 from China, expanding oil production at its main refinery up to 100,000 barrels per day thanks in part to China National Petroleum Corp., which owns 50 percent of the facility.

Beijing was more than happy to oblige. For the last decade or so, Chinese firms have scoured the globe for more oil to meet its ever-growing energy needs. In just the last 15 years, China went from oil self-sufficiency to importing about 3 million barrels per day. According to estimates, by the year 2020, China will have 140 million vehicles on the road, surpassing the car count in the United States.

China's seemingly insatiable oil thirst has apparently prompted officials there to overlook political uncertainties in dealing with African leaders such as Sudanese President Omar al-Bashir, who presided over 20 years of civil war that left millions dead and homeless.

China has also sunk $2.3 billion into Nigeria's oil industry in 2006 and invested millions more in Angola, making unrest and economic setbacks in Africa petroleum this past year appear as nothing more than minor inconveniences.

Whether China can maintain a status quo in 2007, while the unrest in Nigeria and Sudan undoubtedly continues, remains to be seen.

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