The tougher US regulation that is sure to follow the
Deepwater Horizon oil spill in the Gulf of Mexico could divert
some attention to west Africa offshore oil regions, some
industry observers believe.
Others, more cautious, say it would take an incredible hike
in US costs, or a quantum leap in west Africas business
environment, to produce any substantial reallocation of
Paul Stevens, senior research fellow at the Royal Institute
of International Affairs in London, said: For people
interested in drilling in deep water, west Africa will become
There is no question that part of the fallout from the
disaster will be tougher [offshore drilling] regulation in the
US, and that will mean higher costs.
West African producers will probably talk about
tougher regulation too, but whether they will legislate it or
enforce it is another matter and even if they do, it
will lag behind the US regime by miles.
Julian Lee, senior energy analyst at the Centre for Global
Energy Studies in London, said that the substantial increases
in offshore production in recent years had been in the Gulf of
Mexico and Brazil and that it would take something
quite significant for oil companies to switch investment
away from those fields.
Asked about the possibility that companies might pay more
attention to west Africa and other deepwater regions, he said:
It will really depend on how difficult the US government
makes it to work in American waters.
West Africa its own problems particularly with
transparency and corruption issues that make the largest
companies tread carefully there. In the US offshore companies
have the possibility to prospect, the rule of law and sanctity
of contract, availability of a skilled workforce and a
ready market for the oil.
Mouhamadou Niang, division manager of the AfDB private
sector department, said in Abidjan that the Deepwater Horizon
accident would have a major effect in Africa.
He said he was concerned about safety standards. The
question is: if [an accident] had happened in Africa, how would
this have been managed? I hope that governments in Africa will
start looking very closely and critically at the quality of
The causes of the Deepwater Horizon accident are not yet
clearly established, mainly because it is the first major
accident at the record depths at which the industry is now
working. Once the industry has adapted its safety procedures,
deepwater drilling may become more expensive across the
board its too early to be sure, Lee of CGES
US president Barack Obama at the weekend launched an
investigation into the Deepwater Horizon accident which
threatens to overtake the 1989 Exxon Valdez oil spill as the
USs worst ever ecological disaster and said that
new permits would only be issued if companies could give
assurances that it would never be repeated.
Nigeria and Angola, west Africas oil giants, already
produce oil offshore, but drilling is also in progress offshore
of Ghana, Sierra Leone, Gabon, Ivory Coast and Liberia.
US-based Anadarko has found oil with its Venus B-1
exploration well in Sierra Leonean waters, while Tullow Oil of
the UK expects to start producing oil this year from its
Jubilee field off Ghana. Canadian Natural Resources Ltd of
Canada is producing oil from the Olowi field off Gabon. Andarko
has also struck natural gas off Mozambique, east Africa.
Exploration companies also claim there are also possibilities
offshore of Kenya and Somalia.