While colonial rule has been vanquished in Africa, exploitation of the continent’s mineral wealth remains largely the providence of multinational corporations based in the U.S., Western Europe and, increasingly, China.
In the first of an AFKInsider exclusive series we will examine the countries and companies that conduct the greatest share of mining and mineral exploitation throughout the continent.
The series will examine the three largest categories of industrial-level exploitation: oil and gas, industrial minerals such as iron ore or copper and precious minerals and metals including gold and diamonds.
Finally, in contrast to the industrial-scale mining landscape dominated by multinational corporations and state-owned giants, the series will examine so-called “artisanal” or individual mining efforts that rule the sector in places such as the Democratic Republic of the Congo, Republic of the Congo and Central African Republic.
Across the continent, Nigeria, Angola, Libya and Algeria crack the top 20 economies in the world in crude oil production and proven reserves. Additionally, according to the U.S. Energy Information Agency (EIA) more than one fourth of the countries across the continent are oil exporters. Algeria and Nigeria are also in the top 20 in natural gas exports. Egypt, despite not being in the top 20 in natural gas exports is 16th in the world in proven reserves. In addition to these international energy powerhouses, the continent is replete with lower-level producers.
Despite these tremendous resources, the majority of oil and natural gas exploitation across the continent is done by foreign companies. According to Forbes, the only organically owned energy company ranked among the world’s 20 biggest is Sonatrach, the Algerian state-owned energy company. Sonatrach’s production is about one sixth of the top-ranked Saudi Aramco and only about half of the largest privately held company, ExxonMobil.
This begs the question, who is exploiting oil and gas in Africa? Let us take a look corporate make up in Sub-Saharan Africa’s biggest oil and gas producers.
Nigerian law requires that multinational corporations operating within the country form joint ventures with the federal government’s oil ministry, also known as the Nigerian National Petroleum Corporation (NNPC). According to a report, in 2012 (the last year for which data is available), approximately 89 percent of crude was exploited by joint ventures including multinational corporations partnering with the NNPC. Just more than 11 percent was produced by wholly indigenous companies. Of the joint ventures, at least 50 percent of the company must be held by the NNPC.
Among the multinational corporations, the largest oil and gas company working in Nigeria is Royal Dutch Shell. Through various wholly and partially owned subsidiaries, Shell has been drilling for oil in Nigeria since the late 1930s and exporting since 1958. The company’s natural gas presence is a newer phenomenon, beginning in 1998. Shell Nigeria currently accounts for nearly a quarter of all crude exploitation. It is followed closely by several oil-exploiting multinational corporations including Exxon Mobil, Chevron and Italian giant Total.
| Multi-National Corporation | Country of Origin | Production (in Barrels per day) | % of Total Production |
| Shell | UK/Netherlands | 605,539 | 24.4 |
| Exxon Mobil | United States | 528,000 | 21.2 |
| Chevron | United States | 489,999 | 19.8 |
| Total Elf | France | 400,134 | 16.1 |
| Agip | Italy | 98,284 | 4.0 |
| Addax | China | 90,489 | 3.6 |
| All Indigenous Companies | Nigeria | 270,045 | 11.1 |
The natural gas industry in Nigeria is far less developed, despite the country’s vast reserves. While the majority of the country’s natural gas is exported as liquid natural gas, the country has only one liquid natural gas facility. This facility, located on Bonny Island, is a joint venture between the NNPC, Shell, Total and Eni (Italy). Another smaller facility is being developed by the NNPC, Total, ConocoPhilips (U.S.) and Eni. A small amount of natural gas is shipped via the West African Gas pipeline to Ghana, Togo and Benin. As the industry continues to develop, no doubt greater capacity will be a must to exploit Nigeria’s vast reserves.
While Nigeria is not exactly a beacon of hope for anti-corruption and transparency advocates, information on Angola’s oil and gas sectors is even harder to come by. Non-transparency is legally upheld in Angola, and information kept from the public domain. This means precious little data on joint ventures and ownership are available.
According to the EIA, the Angolan national oil company, Sonangol, requires joint ventures or production sharing agreements in order for foreign owned MNCs to exploit Angolan resources. Among the major partners are Chevron, ExxonMobil, BP, Statoil (Norway), Eni, Total, Sinopec (China) and the China National Offshore Oil Corporation (China). Angolan offshore oil production is further broken into 41 blocks, all of which are joint ventures among several MNCs and Sonangol, further complicating any attempt to discover exactly how many barrels per day each company pulls from the ground.
As capacity across the continent and demand throughout the world rise, there will no-doubt be greater focus on oil and gas exploration in Africa from all corners of the globe. While Nigeria and Angola have forced foreign companies to partner with a state oil company, in theory giving some revenue in the form of tax dollars towards development, the opaque nature of the industry has led to incredible corruption. According to Transparency International Nigeria and Angola are among the most corrupt countries in the world. Angola has actively shielded its oil and gas sector from the public domain. The Open Society Initiative stated, “…the Angolan government has taken some initiatives to increase transparency…but this data is neither consistent, nor comprehensive, nor independently verified.”
In order to aid development and advancement on the continent, efforts to ensure benefits are reaped locally must partner joint venture and indigenization laws. Without such efforts the vast wealth oil can bring will only serve to line the pockets of a precious few.
