Asian oil companies not yet in Africa – Chatham House

Asian oil companies have yet to shake the dominance of European and U.S. energy producers in Nigeria and Angola, according to a Chatham House report.

“In spite of fears expressed in Western capitals about an Asian takeover in the Nigerian and Angolan oil sector, the reality is different,” said the London-based Royal Institute of International Affairs, also known as the Chatham House, in a report released today. “These fears were highly exaggerated.”

The West African coast stretching from Nigeria to Angola is among the world’s richest in hydrocarbon reserves. Exploration and production in both countries has for many years been dominated by oil majors including Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell Plc.

Demand for energy in Asia, driven by surging economic growth in recent decades, has led oil companies mainly from China, South Korea and India to seek access to African energy reserves. They have gained some “footholds” since 2004, though not enough to trouble the oil majors, the report said.

“More importantly, the oil majors remain the leading players in both countries,” said the report, which focuses on Nigeria and Angola. “They dominate production and hold the majority of reserves.”

Rather than challenge the leading Western energy producers, companies from China, South Korea and India, “latecomers to West Africa,” have become rivals for hydrocarbon interests in the two countries, the report said.

China has used “deeper pockets” to gain some advantage over India while the Korean National Oil Corp. is fighting India’s ONGC Videsh Ltd. and the Nigerian government in court for control of two offshore oil rights, it said.

Source: Bloomberg