• 10 hours Shell Oil Trading Head Steps Down After 29 Years
  • 14 hours Higher Oil Prices Reduce North American Oil Bankruptcies
  • 16 hours Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 17 hours $1.6 Billion Canadian-US Hydropower Project Approved
  • 19 hours Venezuela Officially In Default
  • 21 hours Iran Prepares To Export LNG To Boost Trade Relations
  • 23 hours Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 1 day Saudi Oil Minister: Markets Will Not Rebalance By March
  • 1 day Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 2 days Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 2 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 2 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 2 days Santos Admits It Rejected $7.2B Takeover Bid
  • 2 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 2 days Africa’s Richest Woman Fired From Sonangol
  • 3 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 3 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 3 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 3 days Lower Oil Prices Benefit European Refiners
  • 3 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 4 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 4 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 4 days OPEC To Recruit New Members To Fight Market Imbalance
  • 4 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 4 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 4 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 5 days GE Considers Selling Baker Hughes Assets
  • 5 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 5 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 5 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 5 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 5 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 7 days The Oil Rig Drilling 10 Miles Under The Sea
  • 8 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 8 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 8 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

Is China Heading Toward An Energy-Debt Crisis?

China’s influence is often overlooked…

Alt Text

Can U.S. Renewables Catch Up With Nuclear?

In the most recent EIA…

Alt Text

Don’t Back U.S. Shale To Keep Oil Prices Down

The common assumption that U.S.…

John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

Brazil to Join the Battle for Africa's Energy Riches

Brazil to Join the Battle for Africa's Energy Riches

In October Brazilian President Dilma Rousseff made a state visit to Africa, consisting of South Africa, Mozambique and Angola.

Quick – what was President Roussef’s insider edge in Mozambique and Angola?

Two things.

First, Brazil, along with Angola and Mozambique, were originally Portuguese colonies.

Secondly, the three countries share linguistic ties, meaning that President Roussef’s team did not need interpreters to explain their agenda.

And an impressive agenda it is.

Later this month President Roussef plans to send a team from the country’s Agencia Brasileira de Promocao de Exportacoes e Investimentos (Brazilian Trade and Investment Promotion Agency, or APEX-Brasil) to South Africa, Mozambique and Angola, to discuss investment and trade opportunities. Aside from APEX-Brazil officials, the entourage will include Brazilian entrepreneurs. Heading the delegation will be Ministerio do Desenvolvimento, Industria e Comercio Exterior (Ministry of Development, Industry and Foreign Trade) Minister Fernando Pimentel, who, along with his entourage, will visit Mozambique on 21-22 November, then moving to Angola for 23- 25 November before concluding their visit in South Africa from 28 to 30 November.

APEX-Brasil is an independent agency that works in association with Brazil’s Ministry of Development, Industry and Foreign Trade, supporting foreign projects to both increase Brazilian exports and attract foreign investment into Brazil. The agency’s clout is substantial, as Apex-Brasil supports over 12 thousand companies in 80 sectors of the Brazilian economy.

Why should Africans listen to Brazilian representatives? Brazil, Latin America’s largest economy, is now the world’s ninth largest, whose soaring growth rate is expected to propel it to fifth place within a decade, and has a friendly market for foreign investment.

While up to now Brazil has prioritized its relations with its Latin American Mercosur trading bloc partners, the country’s booming economy is now generating an outreach program well beyond the nation’s traditional diplomatic concerns, especially Africa, as it seeks to become the world’s fifth largest economy by 2022, the bicentennial of its declaration of independence from Portugal.

Another insider edge? Over half of Brazil’s population is of African ancestry. Brazil has the world's second-largest black population after Nigeria.

And Africans will undoubtedly be willing to listen. Over the last five years Angola has managed to reach two-digit economic growth in practically half the decade, with a record in 2007, reaching 22.7 percent, according to World Bank figures.

Mozambique?

In 2001 the nation achieved a growth rate of 11.9 percent, but over the past half-decade has maintained a constant rate of growth of between 6 and 9 percent.

Bilateral trade between Brazil and Africa jumped from $4.2 billion in 2000 to more than $20 billion as of September.

Quite aside from trade deals, Brazil’s potential trade partners will undoubtedly seek to learn from the country’s dramatic economic turnaround. The Brazilian economic growth model has gone through three phases.

First came wage-led expansion, with income transfers and higher minimum wages leading to increased consumption and a recovery of investment. As the government under former President Luiz Inacio Lula da Silva tamped down inflation, the economy’s second phase was investment-led growth, including higher public investment and financial incentives to private investment. Now Lula’s successor President Rousseff is emphasizing education and innovation to spur long-term growth.

All of the above issues have given Brazil multiple inside edges, all valuable lessons that African nations cannot learn from the United States, the European Union nor China. Brazil is not interested in military bases (the U.S.), nor exploitative lopsided trade agreements (the E.U. and to a lesser extent, China.) Brasilia’s interest is trade, period.

According to data from the International Monetary Fund for the last decade Angola and Mozambique were among the world’s ten fastest economies. And a major factor in both cases was the rise of an indigenous energy industry. Angola is now China’s largest source of oil imports, and last month U.S. and Italian companies announced that they have found the natural gas equivalent of more than 4 billion barrels of oil offshore from Mozambique.

So, what does Brazil bring to the table? Its state energy company Petrobras, is a world leader in offshore energy development, having a number of major “ultra-deepwater” discoveries in the past few years, including the Lula superfield off the coast of Rio de Janieiro, estimated to contain 8 billion barrels of oil. Petrobras expertise would be of great use to Angola’s Sociedade Nacional de Combustiveis de Angola, E.P., or Sonangol, the Angolan state oil company, whose offshore fields are also "ultra-deepwater," discoveries, while Mozambique is still seeking the best deal for its offshore deposits.

Proof of the Brazilian value-added humanitarian agenda in Africa versus the straight business deal? On 9 November former Brazilian President da Silva received Africare’s Leadership Award at the 2011 Africare Bishop John T. Walker Memorial Dinner in Washington, D.C. for his efforts to strengthen economic and political cooperation across the African continent.

But Brazil’s agenda is not limited to assisting former Portuguese colonies improve their situation.  On 8 November Brazilian Finance Minister Guido Mantega said that Brazil was ready to help the International Monetary Fund tackle the EU’s economic crisis, remarking, “Brazil and other countries, including the BRICS are ready to strengthen the IMF. But this depends on them doing the tasks they set out to do.”

Africa’s energy riches, long thought to be stitched up by China, the EU and the U.S., have a new competitor, and one that speaks the language. And bureaucrats in Brussels are doubtless fighting over themselves to be among the elect to fly to Rio to negotiate a loan.

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




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News