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Cote d'Ivoire Look to Join the Oil Rich Neighborhood in West Africa

Cote d'Ivoire Look to Join the Oil Rich Neighborhood in West Africa

Cote d'Ivoire (“Ivory Coast” in English), is the world's largest producer and exporter of cocoa beans. What will the nation do with its newly discovered oil riches?

Astronomers spend their entire lives contemplating the heavens, looking for a sign.

Occasionally they find it, in the form of an exploding supernova or whatever.

More mundane observers of terrestrial events now have the fascinating possibility of observing an African country beginning to develop its energy resources and ponder what the future holds, as it lives in an oil-rich neighborhood.

On 29 February Senegal’s Jeune Afrique reported such an incipient energy supernova in West Africa, in a brief pronouncement, observing, “(French oil major) Total, Anadarko Petroleum Corporation (United States), and Canadian Natural Resources International have spent $10 million to acquire three new licenses for oil exploration off the Ivorian coasts.  The ‘entry ticket’ is valid for an initial period of three years.  The terms of the license include an obligation to carry out drilling, using the so-called ‘3D Seismic’ technique.  Located 100 kilometers (62 miles) from the coast, the three blocks have an area of 32,000 square kilometers (12,355 square miles).”

To the west, Liberia is ramping up its petroleum production and to the east, neighboring Ghana, which began offshore production from its Jubilee field began in mid-December, 2010, is already producing 85,000 barrels per day (bpd).

On 27 February Jubilee field joint venture partner, Texas-based Kosmos Energy said that it has acquired the participating interest of Texas-based Sabre Oil and Gas Holdings Ltd in the Deepwater Tano Block, offshore Ghana for a purchase price estimated at approximately $365 million. Kosmos President and Chief Executive Officer Brian F. Maxted exulted, “We feel very fortunate to have an opportunity to grow our interest in what we believe are some of the most valuable assets in West Africa at a compelling price. This transaction adds to existing production at Jubilee, enhances our stake in the next oil development offshore Ghana, and increases our exposure to the significant Deepwater Tano exploration program in 2012. We have great belief and confidence in the quality, value, and upside of our discoveries and the further potential of the Tano basin petroleum system."

Think about it, only $10 million to explore 12,355 square miles of Ivorian coast offshore waters, which works out to a princely $809 per acre over the next 36 months.

This for a country of 22 million inhabitants, whose average annual income is $1,600 a year – or $4.38 per day where, according to the CIA, the citizens are “heavily dependent on agriculture and related activities, which engage roughly 68 percent of the population.” But happily, according to Langley, the “Cote d'Ivoire is the world's largest producer and exporter of cocoa beans,” a note of consolation to chocoholics worldwide.

The sad reality is that the Cote d'Ivoire has virtually no internal fiscal and technological resources to exploit the potential of its offshore waters, leaving it vulnerable to the blandishments of whatever foreign energy company comes in to cut a deal.

And the politics?

Two years ago when current President Alassane Ouattara was declared the victor of the Ivorian presidential election by the country's Independent Electoral Commission (CEI), the President of the Constitutional Council, an ally of President Laurent Gbagbo, in power from 2000, invalidated the results and proclaimed that Gbagbo had won, which saw both claim victory before the international community urged Gbagbo to step down. Following strife in which hundreds of people were killed and at least a million people have fled, mostly from the capital Abidjan, Ouattara's forces arrested Gbagbo on 11 April 2011.

Will Cote d'Ivoire’s incipient energy wealth ‘trickle down?” In an interview earlier this month, former Cote d'Ivoire National Assembly Speaker Mamadou Koulibaly noted on ONUCI-FM Radio, “Finding the Army in the remote villages in the street establishing order with guns, extorting money from people, going to the farms or to market to harass people is not at present a state of law. We are still in a state of emergency.”

And guess who the troops work for?

Political stability?

A situation with security written all over it. Cote d'Ivoire’s “compelling price” for exploring its offshore oil assets?

A mere $10 million for 22 million people, or a princely 45¢ per citizen, assuming that the largesse “trickles down’ equally– something to think about over your next candy bar.

By. John C.K. Daly of Oilprice.com




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