By Dave Brown - Exclusive to Oil Investing News
The West African offshore oil and gas industry has a history of exploration of more than 50 years, with international majors and smaller firms having held, and relinquished, licences all along the coast since the British discovered oil in the Niger Delta in the late 1950s. Nigeria and Angola are the largest oil producers in West Africa; however, exploration and development throughout the region is widely dispersed across the countries of Mauritania, Ghana, Ivory Coast, Benin / Togo, Cameroon, Equatorial Guinea, Gabon and Congo.
Interest in Nigerian oil originated in 1914 with an ordinance making any oil and mineral under Nigerian soil legal property of the Crown. By 1938 the colonial government had granted the state-sponsored company, Shell (NYSE: RDS.A) (then known as Shell D'Arcy) monopoly over exploration of all minerals and petroleum throughout the entire colony. Until the late 1950's concessions on exploration and production were exclusively maintained by Shell, then known as Shell-British Petroleum. However, other firms became interested and by the early 1960's ExxonMobil (NYSE: XOM), Texaco, and Gulf had purchased concessions.The deepwater sector still has a large avenue to expand and develop both in Nigeria and throughout the region. The amount of oil extracted from Nigeria is expected to have expanded its operational scope from 15,000 billion barrels per day in 2003 to 1,270,000 billion barrels per day by the end of this year. Deepwater drilling for oil is especially attractive to oil companies because the Nigerian government has very little share in these activities and it is more difficult for the government to regulate the offshore activities of the companies. Deepwater extraction plants are less predisposed to local militant attacks, seizures due to civil conflicts, and sabotage. This permits more resources and alternatives available to efficiently extract the oil, with less potential for conflict than the operations on land.