If you're following the global energy picture closely, you know that Brazil's deepwater Santos Basin has captured the heart of oil and gas lovers everywhere. From what I can see, that's not likely to change quickly. But there are other parts of the world that have made energy aficionados sit up and take notice as well.
Of course, there's the U.S. Gulf of Mexico, which, when the rigs were tugged to deeper waters, reawakened and began to yield bigger discoveries, including a "giant" find earlier this month by a BP-led consortium
Nigeria on the MEND
Nigeria is a conundrum from the oil and gas industry's perspective. For years it's been the continent's largest producer, a purveyor of light, sweet crude, which is sought after because it's relatively easy to refine into gasoline and diesel. And for now, it ranks as the fifth largest exporter of oil to the United States.
The problems there are political and military. Succinctly, most of the nation's oil comes from the Niger Delta, and the tribes that are indigenous to the delta have been pretty much precluded from the nation's energy spoils in favor of those with more political clout from other parts of Nigeria.
And so, primarily through an organization called the Movement for the Emancipation of the Niger Delta (MEND), the local tribesmen have taken to conducting regular attacks on the installations of companies like Total
As a result, Nigeria's production has fallen to about 1.7 million barrels a day from 2.6 million barrels as recently as 2005. That's catastrophic for a country that receives 80% of its government revenue from oil. And it hasn't helped citizens of the delta, who remain beset by squalid conditions, including substandard roads, understaffed schools, and a general lack of such other basic amenities as running water and electricity.
The continent's rising star
And then there's Angola, which clearly is headed in a different direction. Located toward the south of Africa's West Coast, Angola is recovering rapidly from a civil war that raged there from 1975 to 2002. And the recovery is hardly superficial. It's allowed Angola to surpass Nigeria as Africa's top energy producer. Indeed, because of its steadily improving economy, the country, which was long a Portuguese colony, is attracting a stream of workers and professionals from Portugal -- probably between 60,000 and 100,000 during the past five-year span.
And while Nigeria continues to struggle economically as its production slides, Angola's gross domestic product has expanded by more than 10% annually since 2004, despite an unemployment rate that remains high. But for those of us with interests in energy, it's noteworthy that Angola just might be structured offshore much like Brazil's Santos Basin. If that's the case, you'll likely be reading about sizable offshore discoveries, like those made by Chevron
How, then, should an investor with a penchant for energy play the expanding African scene? While all the companies mentioned above are solid, unless your portfolio is brimming with various types of oil and gas stocks, I'd keep it simple and focus on ExxonMobil. The biggest of Big Oil is working in all the spots mentioned, and it unfailingly goes about its business with maximum efficiency.
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