25 February 2008

BBC interviews GPPi Fellow on competing oil explorations in the Gulf of Guinea

Ricardo Soares de Oliveira, a GPPi Fellow and a lecturer at the University of Oxford, was interviewed on 26 January, 2008 by the BBC World Service on African News and Current Affairs. The interview highlighted the competition for oil exploration deals in the Gulf of Guinea, where advances of Russian oil company Gazprom are being encouraged by African nations.

The Nigerian Delta has witnessed a substantial increase in the number of foreign competitors vying for oil exploration deals. Commenting on the phenomenon, Soares de Oliveira suggested that this influx in investment is not only driven by the oil needs of industrial economies of Asia, but also to satisfy the fuel needs of the industrial civilization both in the East and the West. New interests in the region lead potential investors from Europe, China and Russia to solicit Nigeria for business opportunities in what is considered by many as the new “el Dorado.” Russian energy giant Gazprom’s presence in the Gulf of Guinea has stirred nervousness among its western counterparts. The announcement of Gazprom’s business adventure “is first and foremost more political than economic, it signals willingness on the Russian side to internationalize an investment that is fundamentally regional at present,” says Soares de Oliveira.

Commenting on whether the Russian oil giant will outperform western investors, Soares de Oliveira reiterated that this is a matter which goes beyond technical know-how of oil excavation. In the case of Nigeria, Gazprom presence will also be a replacement for western banks as a source for financing oil adventures. He asserted that the region’s oil economy is big and rapidly expanding. For now, the oil sector can comfortably accommodate a number of competing investors with little friction between due to a certain division of labor. While western oil companies are investing in technologically advanced oil projects, Asia oil companies are involved with less technologically intensive projects. However, when countries like China and India eventually reach the necessary technological frontier to compete for oil and gas exploration with their western counterparts, the current scenario will change.

Soares de Oliveira also commented on the dangers of the natural gas associated with oil deposits being flared off into the atmosphere and the extraordinarily tragic consequences it possess on the lives of Nigerians in the region. Gazprom has offered a project which will put an end to the flaring off of natural gases and transform the gas into Liquefied Natural Gas (LNG) for sale. Whether or not this will lead to a new trend in the Nigerian energy sector and whether the Gazprom project will succeed is unknown. Nonetheless, Soares de Oliveira mentioned that it is certainly praiseworthy that Gazprom has offered to put an end to the harmful practice of gas flaring.

This BBC interview coincided with GPPi’s event on the politics of oil in Africa, co-organized with the Harvard Center for European Studies Berlin. The event, entitled the "New Scramble for Africa", took place on Monday 11 February 2008 at the Wissenschaftszentrum, Berlin.

To hear the complete BBC interview with Ricardo Soares de Oliveria, please click here.

For more information, please contact Ricardo Soares de Oliveria.

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