Reuters has issued its annual report on “political risks” in the Gulf of Guinea. The report has little to do with how things are going for the people who live in the region — the focus is on political uncertainty that may impact investment. Nonetheless, it’s a useful rundown of the main industries and sources of instability across the region.
Piracy has been mentioned in this report for at least three years, but it’s moving higher up on the risk list. This year, the U.S. military presence also appears on the list. Although it is cited as a response to the lack of offshore security, an increased military presence could easily exacerbate instability in the region.
A few energy-related highlights from the report:
Gulf of Guinea nations produce more than 3 million barrels of oil per day — about 4 percent of the global total — mostly for European and American markets, the bulk coming from OPEC member Nigeria (2.2 million bpd).
Washington estimates the Gulf of Guinea will supply about a quarter of U.S. oil by 2015 and has sent military trainers to the region to help local navies secure shipping as piracy is increasingly becoming a concern.
The security of operations and shipping is a key risk.
Italian oil major Eni has said it will launch a pilot of its oil sands project in the Republic of Congo this year. The company signed a $3 billion deal to develop the project in 2008, giving it access to estimated reserves of between 500 million and 2.5 billion barrels.
Hmm, I wonder if oil sands development in Africa will generate the same kind of controversy as it has in Canada. For a bit more information on potential tar sands development in Africa, you can read the pertinent sections of this report from Friends of the Earth International: Tar Sands, Fuelling the climate crisis, undermining EU energy security and damaging development objectives.
Read the entire Reuters report here: FACTBOX: Key political risks in the Gulf of Guinea
And, while we’re on the topic of risks, the U.N. Office on Drugs and Crime is also raising the alarm. AP reports, “Yuri Fedotov, the head of the U.N. Office on Drugs and Crime, told the U.N. Security Council on Tuesday that in addition to an upsurge in cocaine trafficking, West Africa is experiencing an increase in piracy, arms and human trafficking.”
In the past decade West Africa has become crucial for cocaine traveling from South America to Europe. According to the U.N., drug cartels take advantage of the region’s poverty, “lack of border controls, weak law enforcement and endemic corruption.”
The U.N. states that the region is also experiencing fallout from NATO’s Libyan adventure in the form of a massive influx of weapons.
Add to the mix new oil in Liberia and Sierra Leone, and well, the road ahead may be quite bumpy.