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Major oil exporting countries like Angola and Algeria are trying out
new, smarter versions of resource nationalism as Nigeria’s petroleum
industry reforms are delayed and new West and Central African producers
tackle the task of shaping new oil and gas industries.
It is estimated that Nigeria’s oil earnings since independence run into the hundreds of billions of dollars. For a country with one of the highest maternal mortality rates in the world, it is hard to square oil wealth with economic progress. It is tempting to point the finger at corrupt politicians, international oil companies (IOCs) and the geopolitical agendas of foreign governments; certainly all three have been responsible for squandering Africa’s natural wealth at various times throughout the last 50 years.
But there are also signs that the continent is changing. After several decades of indigenisation programmes, there is now a critical mass of highly-skilled local staff, who are peeling off to create local companies that have the know-how to compete with the oil majors. “I have people who have worked for oil companies in seven countries on three continents”, says Wale Tinubu, CEO of Oando, one such company in Nigeria. “Our service division is run by the former head of Schlumberger’s UK training centre. If he can build capacity there, then he can do it here”.
National oil companies are also starting to evolve from distributing oil money for political patronage to become competent companies in the vein of Brazil’s Petrobras and Malaysia’s Petronas. Two of them have started winning contracts overseas, which requires a level of professionalism previously unimaginable from African state institutions.
There are also signs that the politicians are starting to understand the importance of ‘smart’ resource nationalism – building up their own energy industry and understanding the economic imperatives that the discovery of oil brings. Too often, politicians in oil states allow exchange rates to appreciate, grateful for the political points that cheap imports bring and ignoring the devastation wreaked on the rest of the economy.
A booming commodity
War in the Middle East and the emergence of energy-hungry countries like Mexico and China have put ever-greater strain on oil markets. With the price of oil steadily rising throughout the decade, a slump in the dollar pushed international investors into commodities, and oil hit the vertiginous price of $147 a barrel in July 2008. After the credit crunch hit global markets at the end of 2008, prices fell to a low $30 a barrel.
Read the full article, plus stories on petroleum regulation in Nigeria and an interview with Wale Tinubu of Oando, in
the February-March edition of The Africa Report, on sale now. Subscribe to The Africa
Report via our online store.
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