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Oil and African Development

Published online by Cambridge University Press:  11 November 2008

Extract

The growth of exploration for oil in Africa has been phenomenal. Until the late 1950s the continent was considered to be devoid of any large hydrocarbon deposits; indeed, in 1957 the total production of oil amounted to only 2·7 million metric tons, or 0·3 per cent of the entire world output. Since then, however, the rate of growth has been very rapid, and by 1976 had reached 279·5 million metric tons, accounting for 9·8 per cent of world production.

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Copyright © Cambridge University Press 1977

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References

Page 175 note 1 Darmstadter, Joel, Teitelbaum, P. D., and Polach, J. G., Energy in the World Economy: a statistical review of trends in output and consumption since 1925 (Baltimore, 1971).Google Scholar

Page 176 note 1 Sources: Darmstadter et al. op. cit.; B.P. Statistical Review of the World Oil Industry, 1975 (London, 1976)Google Scholar; The Petroleum Economist (London), XLII, 1, 01 1975Google Scholar, and XLIV, 1, January 1977; and World Oil (Houston), 15 02 1976.Google Scholar

Page 176 note 2 For a comprehensive account of the development of the industry in Nigeria, see Schätzl, L. H., Petroleum in Nigeria (Ibadan, 1969)Google Scholar; and for an introductory description of the oil geology of all these countries, see U.N. Economic Commission for Africa, The Sedimentary Basins in Africa and their Hydrocarbon Resources (Addis Ababa, 1974).Google Scholar

Page 178 note 1 Sources: the same as for Table 1. The Egyptian figures include output from the Sinai oilfield which were under Israeli occupation between June 1967 and December 1975.

Page 179 note 1 Sources: Oil and Gas Journal, 27 12 1971Google Scholar and 29 December 1975; World Oil, 15 08 1974Google Scholar; and The Sedimentary Basins in Africa and their Hydrocarbon Resources.

Page 179 note 2 For example, Algeria has committed itself to supplying markets in Europe and the United States with about 70,000 million cubic metres of natural gas a year by the early 1980s, and as a result has completed its last export contract having no more to sell until significant new reserves are discovered.

Page 179 note 3 The Petroleum Economist, XLII, 6, 06 1975, p. 205.Google Scholar

Page 180 note 1 See African Development (London), 8, 5, 05 1974, p. 14Google Scholar, for the discovery of ‘a new Kuwait’ in Angola, with reserves conservatively estimated at 600 million tons.

Page 180 note 2 The Sinai fields – returned to Egypt under the 1975 interim agreement – were supplying about 55 per cent of the Israeli demand in 1975 compared with 75 per cent the previous year. Output is falling annually by about 7–8 per cent, and reserves, according to Israeli geologists, will be exhausted in 1982. See Oil and Gas Journal (Tulsa), 73, 20, 19 05 1975.Google Scholar

Page 180 note 3 Petroleum Press Service (London), XL, 8, 08 1973, p. 313Google Scholar, said African Development, 8, 11, 11 1974, p. E21.Google Scholar

Page 180 note 4 Blake, G. H., ‘Oil in Egypt’, in Geography (Sheffield), 59, 1, 01 1974.Google Scholar

Page 180 note 5 The Egyptians have been making a concerted effort to encourage western oil companies to search for hydrocarbons. According to West Africa (London), 23 08 1976, p. 1111Google Scholar, 33 exploration agreements have been signed with foreign companies since Egypt launched its open-door policy in 1973.

Page 180 note 6 African Development, 10, 11, 11 1976, p. 1128.Google Scholar

Page 180 note 7 However, the total exploration expenditure in Morocco under the 1973–7 Five-Year Plan is scheduled to reach $130 million. The Petroleum Economist, XLI, 9, 09 1974, p. 341Google Scholar.

Page 181 note 1 Sources: World Oil, 15 08 1974; Economic Commission for Africa, The Sedimentary Basins in Africa and their Hydrocarbon Resources; and various issues of African Development, The Petroleum Economist, World Oil, and Oil and Gas Journal.

Page 181 note 2 The Sedimentary Basins in Africa, p. 29.

Page 181 note 3 African Development, 8, 12, 12 1974, p. 84.Google Scholar

Page 181 note 4 The Petroleum Economist, XLII, 4, 04 1975, p. 152.Google Scholar

Page 183 note 1 Ibid, XLII, 6, June 1975, p. 231, and Oil and Gas Journal, 5 05 1975, p. 150.Google Scholar

Page 183 note 2 World Oil, 179, 3, 15 08 1974, p. 142.Google Scholar

Page 184 note 1 Organisation of the Petroleum Exporting Countries, Information Booklet (Vienna, 1970), p. 6.Google Scholar

Page 185 note 1 The Economist (London), 11 03 1972.Google Scholar

Page 185 note 2 The Libyan production in 1974 fell further than the planned output of about 100 million tons because of a recession in the major markets. The Petroleum Economist, XLII, 1, 01 1975, p. 28.Google Scholar

Page 186 note 1 At the O.P.E.C. meeting in Gabon in June 1975 it was proposed that the dollar basis of oil prices should be replaced by the value of ‘special drawing rights’ which would index price increases to the inflation rate in western countries.

Page 186 note 2 Libya eventually paid $42 million to British Petoleum in compensation.

Page 186 note 3 The Times (London), 4 07 1973Google Scholar, and Petroleum Press Service, XL, 7, 07 1973, p. 245.Google Scholar

Page 186 note 4 The Times, 4 07 1973.Google Scholar

Page 187 note 1 Petroleum Press Service, XL, 9, 09 1973, p. 325.Google Scholar

Page 187 note 2 In the event, however, this stand by the major international oil companies has not prevented some of the Gulf states, notably Saudi Arabia and Kuwait, from demanding a complete takeover.

Page 187 note 3 Shell has since been paid an undisclosed amount in compensation by the Libyan Government.

Page 187 note 4 International Herald Tribune (Paris), 18 08 1974.Google Scholar

Page 188 note 1 West Africa, 16 12 1974, p. 1537.Google Scholar

Page 188 note 2 The Institute's annual enrolment is supposed to be 240 for a two-year course.

Page 188 note 3 Legum, Colin (ed.), Africa Contemporary Record: annual survey and documents, 1975–6 (London, 1976), p. B801.Google Scholar

Page 188 note 4 The Times, 30 03 1976.Google Scholar

Page 189 note 1 African Development, 9, 3, 03 1975, p. N13.Google Scholar

Page 189 note 2 The details of the 1975–80 plan are discussed in ibid. 8, 12, December 1974, pp. 19–20. See also the surveys of Nigeria in The Financial Times (London), 9 06 1975, pp. 1336Google Scholar, and The Times, 22 07 1976, pp. ixiv.Google Scholar

Page 189 note 3 Source: The Petroleum Economist, XLII, 3, 03 1975, p. 85Google Scholar, and XLIII, 9, September 1976, p. 338. The 1976 figure for Algeria is from the International Herald Tribune, 5 01 1977, p. 3.Google Scholar

Page 189 note 4 African Development, 8, 11, 11 1974, p. A5.Google Scholar

Page 190 note 1 In 1974 theoil revenues of the Congo were expected to increase six-fold from $14·6 million to $89·2 million, thereby constituting 75 per cent of the country's budget. See Africa Contemporary Record, 1973–4, p. B592. In Gabon, the budget allocation rose from $125 million in 1973 to $625 million the following year.

Page 190 note 2 The Times, 30 01 1974.Google Scholar

Page 190 note 3 Continuing world inflation has eroded the value of oil prices. Furthermore, as a result of slack demand, some countries have been forced to reduce the high prices on their premium quality crude oil.

Page 192 note 1 Africa (London), 34, 06 1974, p. 47.Google Scholar

Page 192 note 2 The terms ‘Fourth World’ and ‘Most Seriously Affected’ (M.S.A.) have recently been adopted to describe the less-developed countries which face severe difficulties as a result o higher oil and food prices. Of the 45 countries so designated by the United Nations, the majority are African: namely, Benin, Burundi, Cameroun, Cape Verde, Central African Empire, Chad, Egypt, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Kenya, Lesotho, Malagasy, Mali, Mauritania, Mozambique, Niger, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Uganda, and Upper Volta.

Page 192 note 3 Africa's external public debt increased from $9,200 million in 1967 to $28,500 million in 1974.

Page 193 note 1 Surprisingly, some sectors – such as tourism – which were expected to suffer badly have not, in fact, done so. In Kenya, for example, tourism experienced a decline in 1973 (before the full impact of the higher oil prices was felt); but there have been signs of a recovery, indicated by a 3·5 per cent increase in the total number of tourists during the first 8 months of 1974. See Barclays Bank Country Report: Kenya (London), 17 02 1975.Google Scholar

Page 193 note 2 Tanzania, for example, paid 20 times ($51·8 million) as much for cereal imports and three times as much ($66·5 million) for oil imports during January–July 1974 compared to the same period in the previous year. Ibid.Tanzania, 24 02 1975.Google Scholar

Page 193 note 3 The Economist, 15 02 1975, p. 72.Google Scholar

Page 191 note 1 According to African Development, 9, 5, 05 1975, p. 27Google Scholar, Guinea has received a loan $15 million, Mauritania $12 million, and the Organisation for the Development of the Senegal River $33 million.

Page 194 note 2 Ibid.

Page 194 note 3 West Africa, 15 07 1974, p. 864Google Scholar, and The Petroleum Economist, XLI, 7, 07 1974, p. 266.Google Scholar

Page 194 note 4 African Development, 8, 9, 09 1974, pp. 14 and 82, and 9, 5, 05 1975, p. 27.Google Scholar

Page 194 note 5 For example, Libya has recently agreed to barter oil for Argentinian wheat, sugar, rice, maize, and other food. Ibid. 9, 2, February 1975, p. 64. Egypt is to provide India with 500,000 tons of crude oil in exchange for iron, steel, and other industrial materials. The Petroleum Economist, XLIII, 2, 02 1976, p. 73.Google Scholar

Page 194 note 6 Mayall, James, ‘Oil and Nigerian Foreign Policy’, in African Affairs (London), 75, 300, 07 1976, pp. 329–30.CrossRefGoogle Scholar

Page 195 note 1 It is not clear how much say the O.A.U. has in deciding which countries will benefit from this Fund: a $3·75 million loan to Malawi was reportedly suspended by the Arab League ‘because of the hostile statements made by President Banda asserting Malawi's support for Israel against the Arabs’. See West Africa, 23–30 12 1974, p. 1549Google Scholar. If the Arab League has influenced the award of a loan on this basis, it can only politicise a situation when humanitarian considerations should be foremost.

Page 195 note 2 Africa Contemporary Record, 19751976, p. A82.Google Scholar

Page 195 note 3 African Development, 9, 5, 05 1975, p. 25.Google Scholar

Page 195 note 4 Ibid. 10, 9, September 1976, p. 939.

Page 195 note 5 Ibid. 10, 3, March 1976, p. 305.

Page 195 note 6 The Organisation of Arab Petroleum Exporting Countries has since its inception in 1968 promoted development projects – for example, the construction of a large dock and shiprepair yard in Bahrain. However, it has increasingly turned its attention to using oil as a political weapon, and was instrumental in imposing the Arab embargo on the United States and the Netherlands, and enforcing cutbacks in production after the October War of 1973.

Page 196 note 1 The Petroleum Economist, XLI, 12, 12 1974, p. 474.Google Scholar

Page 196 note 2 African Development, 9, 5, 05 1975, p. 25.Google Scholar

Page 196 note 3 The Petroleum Economist, XLIII, 3, 03 1976, p. 87.Google Scholar

Page 196 note 4 International Herald Tribune, 10 11 1976.

Page 197 note 1 Ibid.

Page 197 note 2 African Development, 8, 7, 07 1974, p. 5.Google Scholar

Page 197 note 3 International Monetary Fund Survey (New York), 17 06 1974, p. 177.Google Scholar

Page 197 note 4 West Africa, 17 August 1976, p. 687, and 16 August 1976, p. 1189.

Page 198 note 1 The Economist, 15 February 1975, p. 72.

Page 198 note 2 World Bank. Annual Report, 1976 (Washington, 1976), pp. 78.Google Scholar

Page 198 note 3 West Africa, 2 February 1976, p. 146.

Page 198 note 4 Africa Contemporary Record, 1975–1976, p. B798.

Page 198 note 5 Statistics relating to the aid flow from the O.P.E.C. vary. Figures from the Organisation for Economic Co-operation and Development show that the O.P.E.C. aid commitment increased to $12,750 million during the first nine months of 1974, while the World Bank gives a figure of $8,575 million for the whole of 1974. Nevertheless, the O.P.E.C. group gave substantially more as a percentage of G.N.P. (1·40 per cent) than the members of the O.E.C.D. (0·33 per cent) in 1974.

Page 198 note 6 Africa Research Bulletin: economic, financial, and technical series, 15 April–14 May 1974, p. 3094.

Page 199 note 1 Lesotho, Malawi, Mauritius, and Swaziland are the only countries which maintain liplomatic relations with Israel, apart from South Africa, according to Africa Contemporary Record, 1975–6, p. A84.

Page 199 note 2 Africa, 31, 03 1974, p. 78.Google Scholar

Page 199 note 3 African Development, 9, 1, 01 1975, p. 87.Google Scholar

Page 199 note 4 Africa Research Bulletin: political, social, and cultural series, 1–31 10 1973, p. 3023.Google Scholar

Page 199 note 5 Ibid.

Page 199 note 6 Africa Research Bulletin: economic, financial, and technical, series, 15 11–14 12 1973. p. 2938.Google Scholar

Page 200 note 1 Barclays Bank Country Report: South Africa, 3 February 1975.

Page 200 note 2 United Nations, World Energy Supplies, 1969–72 (New York), Series J, No. 17, 1974.Google Scholar

Page 200 note 3 Ibid. 1950–74, Series J, No. 19, 1976.

Page 200 note 4 African Development, 8, 9, 09 1974, p. 45.Google Scholar

Page 200 note 5 The Petroleum Economist, XLI, 7, 07 1974, p. 259.Google Scholar

Page 200 note 6 Africa Research Bulletin: economic, financial, and technical series, 15 11–14 12 1973. p. 2938.Google Scholar

Page 201 note 1 The Petroleum Economist, XLI, 7, 07, 1974 p. 257.Google Scholar

Page 201 note 2 Ibid, XLII, 4, April 1975, p. 153.

Page 201 note 3 S.O.E.K.O.R. budgeted to spend $30 million on oil and gas exploration in 1975 – three times as much as in the previous year – and $18 million in offshore exploration alone during 1976.

Page 202 note 1 Africa Research Bulletin: economic, financial, and technical series, 15 10–14 11 1973. p. 2919.Google Scholar

Page 202 note 2 Ibid. 15 January–14 February 1974, p. 3003.

Page 202 note 3 African Development, 9, 2, 02 1975, p. 13.Google Scholar

Page 202 note 4 Africa Research Bulletin: economic, financial, and technical series, 15 03–14 04 1973, p. 2698Google Scholar, and 15 April–14 May 1974, p. 3113.

Page 202 note 5 African Development, 7, 2, 02 1973, p. 50.Google Scholar

Page 203 note 1 Ibid, and 10, 10, October 1976, pp. 976–9.

Page 203 note 2 Ibid. 9, 2, February 1975, p. 13.

Page 204 note 1 Source: United Nations, World Energy Supplies, 1969–74 (New York, 1976).Google Scholar

Page 205 note 1 The Times, 21 July 1976.

Page 205 note 2 Africa Research Bulletin: economic, financial, and technical series, 15 08–14 09 1973, 2854.Google Scholar

Page 205 note 3 United States Bureau of Mines, Mineral Yearbook, 1973 (Washington), III, p. 1030.Google Scholar

Page 205 note 4 Vahrman, Mark, ‘Fuel and Power in Tanzania’, in Energy Policy (London), 11, 2, 06 1974. pp. 161–2.Google Scholar

Page 205 note 5 African Development, 7, 8, 08 1973, p. 56.Google Scholar

Page 206 note 1 The Sedimentary Basins in Africa, p. 46.

Page 206 note 2 Ibid. p. 43.

Page 206 note 3 Africa Research Bulletin: economic, financial, and technical series, 15 02–14 03 1974, p. 3047.Google Scholar

Page 206 note 4 For example, in Canada it has been estimated that 100 million tons of ‘overburden’ would have to be removed annually to produce 20 million tons of oil from tar sands.

Page 206 note 5 The South Africans plan to have their first commercial nuclear reactor in operation by 1982 at Duinefontein. The U.S.S.R. has agreed to supply Libya with a nuclear plant, and Egypt has received the promise of assistance from the United States for its nuclear programme. Soviet scientists are currently reactivating the Kwabenya atomic reactor in Ghana, while the Nigerian Government has begun negotiations with the Kraft-Werk Union of West Germany for the purchase of 500–600 MW nuclear power stations.

Page 207 note 1 See Nigeria Takes the Plunge Into the Nuclear Age’, in African Development, 10, 10, 10 1976, p. 993.Google Scholar

Page 208 note 1 Sources: same as for Table 7, also data from Economic Commission for Africa.

Page 209 note 1 Ibid. 8, 10, October 1974, p. 11. In Mozambique, power is now being transmitted a distance of 1,360 kilometres from the Cabora Bassa dam to a sub-station near Johannesburg. Rand Daily Mail (Johannesburg), 11 03 1970.Google Scholar

Page 209 note 2 See Moumouni, Abdou, ‘Energy Needs and Problems in the Sahelian and Sudanese Zones: prospects of solar power’, in Ambio (Stockholm), 2, 6, 1973.Google Scholar

Page 209 note 3 West Africa, 7 October 1974, p. 1213. Even before the rise in oil prices, fuel represented 50 per cent of the operating expenses of irrigation projects.

Page 210 note 1 According to Moumouni, loc. cit., solar cooking could save annually at least 25–30 million tons of wood.

Page 210 note 2 The Libyans have traditionally been able to charge more for their oil than the Gulf states because of the high quality of the crude, and the lower transport costs to the major markets. In late 1976, the General Director of Technical Affairs at the Ministry of Petroleum in Tripoli stated: ‘Demand for Libyan crude is constantly on the increase and supply at the moment is inadequate to meet orders. This is why we want to step up production.’ African Development, 10, 10, 10 1976, p. 975.Google Scholar

Page 211 note 1 B.P. Statistical Review of the World Oil Industry, 1975 (London, 1976).Google Scholar

Page 211 note 2 Ibid.

Page 211 note 3 Libyan, Algerian, and Nigerian crudes have an average sulphur content of 0·2 per cent, 0·1 per cent, and 0·1 per cent, respectively, in contrast to 2·5 per cent for Kuwait, 2 per cent for Iraq, 1·7 per cent for Saudi Arabia, and 1·4 per cent for Iran. Petroleum Press Service, XL, 10, 10 1973, p. 365.Google Scholar

Page 211 note 4 B.P. Statistical Review of the World Oil Industry, 1971 and 1975.

Page 211 note 5 Ibid.

Page 212 note 1 Sources: The Institute of Petroleum, London, and various issues of African Development and The Petroleum Economist.

Page 212 note 2 Nigeria will be supplying the United States with 8·9 per cent of its oil imports by 1977, 10 per cent by 1980, and 11·1 per cent by 1985 according to one prognosis. Oil and Gas Journal, 5 January 1976, p. 54.