Business Trends

The United States And China Battle For Africa’s Oil Trade Market

In Uncategorized on July 29, 2009 at 4:38 pm

usachinaThe battle between China and the United States over Africa’s oil and gas resources is becoming more and more intense,” says Patrick Morris, President and CEO of Gold Star Resources Corp., a Canadian-based energy resource company targeting ‘onshore’ energy resource opportunities in Liberia, Cote d’Ivoire and Ghana. The company recently signed a Letter-of-Intent with Bengal Bight Ghana Ltd. to acquire 100% interest in the hydrocarbon rights of Bengal’s 1,000 sq. km. Tiampoum mining concession in Cote d’Ivoire, near the border of Ghana. Gold Star also recently disclosed that it acquired International Resource Strategies Liberia Energy, Inc.

According to Morris, “The International Energy Agency now projects that China’s net oil imports will soar from 3.5 million barrels per day in 2006 to over 13 million barrels per day by 2030. China already receives 60% of Sudan’s oil exports. While the U.S. today is still the number one importer of Africa oil, China is quickly closing the gap and has already sped past Great Britain and France to emerge as Africa’s second largest trading partner. China’s industrial growth has made that nation the second largest consumer of oil worldwide. There’s no question that China is winning more and more of African oil as each month passes.”

Morris also pointed out that trade between Africa and China has grown about 30% in the past ten years. “Based on substantive government reports, trade between Africa and China will exceed $100 billion by 2010,” the Canadian oil executive predicted. “The United States and China will now be in an intense competitive race for the lion’s share of this trade market. Both nations will be pouring billions of dollars into rebuilding Africa’s infrastructure including transportation, medical and educational projects. These projects go hand-in-hand with the African oil scramble and will ultimately benefit the African people and their economy over the next 20 years. China is using the African oil and gas markets to rapidly surpass the United States from a geopolitical and economic standpoint.”

Global Oil & Gas Exploration

According to industry research firm IBISWorld, Africa and the Middle East are expected to account for about 34% of global oil and gas production in 2009, up from about 32% in 2004.

The oil and gas industry’s main products are crude oil and natural gas. Crude oil is expected to account for 67% of global output by value in 2009 and natural gas for the remaining 33%. The share accounted for by oil peaked at about 78% in 2008, reflecting the relatively strong growth in oil prices compared with gas prices.

To view IBISWorld’s full report on Global Oil & Gas Exploration and Production, click here.

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