JPRS ID: 9190 SUB-SAHARAN AFRICA REPORT

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000200100021-5
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• Content Type: REPORTS

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JPRS L/9190
14 July 1980 -
Sub-S~haran Africa Re ort ~
p
FOUO No. 681
F~IS FOREIGN BROADCAST INFORMATION SERVICE
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, JPRS L/9190
~ 14 July 1980
Sl1B-SAIIARAN AFRI CA REPORT
F'OUO No . 6 81
CONTENTS
INTER-AFRICAN AFFAIRS
African Oil Exploration, Production, Distribution Surveyed
(JEIJNE AFRZQUE, 14 May 80) 1
Significance of 'Nine Summit' Discussed
(Henri Delahaie; AFRIQUE-ASIE, 28 Apr 80)........... 25
Edem Kodjo's Approach Ghal~~nged by Ismael Ould Amar
(JELAJE AFRIQUE, 4 Jun 80) 30
Nai.robi Conference Launches Cooperation of Experts
(Habib Boulares; ,TEI7NE AFRIQU~,, 4 Jun 80) . . . . . . . 33
Islamic Development Bank Aid to Africa Reported
(MARCHES TROPICAUX ET MEDITERRANEENS, 23 May 80) . 36
Bri+efs
Qadhdhafi Warnings 39 -
ANGOLA
Briefs \
Ministerial Responsibility 4p
CEN TRAL AFRI CAN RE PUB LI C
Some Agitation Said To Exist
(MARQiES TROPICAUX ET MEDITERRANEENS, 2 May 80) 41
B riefs
Bouar Base To Be Reactivated 43
Minimum Wages Increa~sed 43
~ Minister Visits Greece 43
IDepartments Abolished k4
State Inspectorate General 44
French Military Equ~pment Donation 44
- a - [III - NE&A - 120 FOUO]
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rvn urrl~ttw u~~ UNLY
' CON GQ
Petroleum Prospects Resulting'From New Discovery Reported
, (MARQ~ES TROPICAUX ET MEDITERRANEENS, 2 May 80) . 45
Briefs
French Financing Agreement 46 _
Central Comait tee Work Co~iss~.ons 46
Increase in Money Supply 46
ATIBOUTI
French Aid to Djibouti Discussed
(MARCHES TRUPICAUX ET MEDITERRANEENS, 30 May 80)... 47
Briefs
Aid From Iraq 48
ETH IOPIA
Brie~s
~ Troop Movements 49
QiANA
Briefs
Trade With Britain 50
FAD Agricultural Loan 50
Transport Services Offered 50
~ Wood Sector Polish Cooperation 50
LIBE RIA
New Re gi me Facin g Many Fut ure Dan ge rs
(Raphael Mergui; JEtINE AFRIQUE, 28 May 80)............ 51
MALI
Minister of Information Denounces 'JEUNE EIFRIQUE' Article
(JEiINE AFRIQUE, 18 Jun 80) 54
~ ZAMB IQUE
,
Briefs
Local. Railroad Car Production 56
~
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NIGER
Government Prudent in Spending UFanium Income
- (Sylviane .Y.amara; JEUNE AFRIQUE, 28 May 80)........ 57
SAO TOME AND PRINCIPE
, Doub ts Persist About Future After ~,~shuffle
(MAR(HES TROPICAUX ET MEDIZ'ERFtA.'~?EENS, 13 Jun 80) 60 ~
- SENEGAL
= Economic Crisis Benefits PD6
(JELiNE AFRIQUE, 28 May 80) 62
Tern~s of Swiss Credit Reported
(MARQ~ES TROPICAUX ET MEDITERRANEENS, 2 May $0) 63
Fleuve Re gion Rice Production -
(:KARCEIES TROPICAUX ET MEDITERRANEENS, 2 May 8Q) 64
Briefs
Agricultural Harvesting Campaigns 65 -
_ Diourbel Peanut Production 65
R~ad Financing 65
SEYQiE LLES
Pragress of Revolution t~eighed
(San Fie; AFRIQUE-ASIE, 9-22 Jun 8(l) . 66
~ TAN ZAN IA
Briefs
Tancania-Zambia Railway Reorganization 71
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INTE&-AFRICAN AFFAIRS
AFRICAN OIL EXPLORATION, PRaDUCTION, DISTRIBUTION SURVEYED
Paris JEUNE AFRIQUE in French 14 May 80 pp 61, 63, 65, 67, 71, 73, 75, 77,
- 79, 82-83, 85, 92-93
[Article: "African Oil"J
_ [Text] If we had to sum up in one sentence the detailed report on African
oil we are submitting to JEUNE AFRIQUE's readers in this issue, we would
- say: African oil is still for the most part undiscovered.
_ Indeed, as might well be exp~cted, the oil that has been exploited to date
was the easiest to discover and also the least expensive. But ever since
the quadrupling of oil prices i.n 1973, and especially after the more recent
price increases, a new geography of African oil has been emerging, a
geography that could radically ch~nge not only the contiuent's economy but
its politics as well.
The first ~easures taken after the 1973 "crisis" are already atarting to
' yield results. Such is the case notably in Egypt, Tunisia, Cameroon, and
Ivory Coast. But the deposits discovered there are small and located near
or within areas already known to proapectors. These deposits are, of
_ course,�not insignificant in the view of mcst of the countries concerned
_ because these countries are small and have energy needs proportionate to
~ their size. Even thuugh the expected output of these deposits is rela-
- tively low, it will, nevertheless, enable these countries to be self-
- sufficient, or indeed even to export a slight amount of their production.
This capability will greatly enhance their balance of payments situation.
~ There is even a possibility that one of the most recent deposita discovered
- in Cameroon may produce a"most pleasant surprise." But the expert~ are
_ being cautious and do not want to count their chickens before they hatch.
Neverth~less, the great African oil adventure still lies ahead of us. It
has every chance of occurring in Niger, Chad, and Zaire, provided there is
the right combination of economic conditions. We use the word "adventure"
advisedly, because at the present time nothing is certain as yet. But this
uncertainty has to at least be dispelled. Likewise another "miracle" could
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could emerge out of the "deep" offshore waters, i.e. at a depth of more
than 200 meters, and this time all of the coastal countries from Dakar tc,
Cape Town could perhaps benefit therefz�om.
Yet oil is not solely a matter of geol.ogy. Here in Africa it is a tre-
mendously important and highly subtle game played by the great powers,
the oil companies, and the African states, a game in which anything goes.
It is a gigantic "poker game" in which chance plays a considerable part.
We have tried to ~lescribe this game by providing the maximum amount of
information. This information, haoever, has not always been easy to ob-
tain.
Wandering Continents
Some 150 million years ago, a toiirist could have travelled from Lagos to
Rio de Janeiro exclusively by land, provided those two cities had existed
then. But much before these cities even had a chance to be founded, that
area of the world which much la~:.er became known as Latf.n America began to
break away from the enormous African land mass and started drifting. Un-
Fortunately no Rimbaud was available at the time to describe in poetic
- Language the delirium of that huge "drunken boat." [Reference to Rimbaud's
poem, "he Bateau Ivre" (Drunkeiz Boat)]. What god will someday put these
pieces of the puzzle back together, pieces scattered as if by a child's
hand? It looks as if peoples crossed the ocean in order to efface this
scattering of entire continent:s.
This break up into continents was most fortunate indeed, because thanks to
it we may one day find oil in. the deep African seas. Yet the surgeon who
operated some 100 million years ago must have skillfully wieloed his
scalpel.
As depicted in the sketch k~elow, the continental dri.ft process occurred ~
in three phases. During the first phase, the two continents [Africa and
South America] remained connected by what geologists today call the Rio
Grande-Walvis rise ("ride"), the Falkland-Agulhas rise. The waters rush- _
ing into the gap remained c;onfined within the Brazil-Angola Basin a~d the
Cape-Argentine Basin. This confinement was essential in that it protected
the sea bottom from being churned by ocean currents, kept deposits of or-
ganic matter from oxidizing, and allowed the formation of source rocks con-
taining hydrocarbons. This dual confinement lasted 10 million years, from
~ less than 110 million years ago to less than 100 million years ago. ,
During the second phase the second barrier--Falkland-Agulhas rise--unfor-
- tunately collapsed under the pressure of the ocean and thus opened the Cape-
Argentine Basin to the ocean. Deep ocean currents cc:~vulsed the sea bottom,
thereby destroying the valuable source rocks that were still in the for-
mation stage. But luckily the first barrier--the Rio Grande-~~alvis rise--
withstood the ocean pressure and the deposits forming within the
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Brazil-Angola Basin had an additional 20 million years in which to develop:
from the 100 millionth year to the 80th million year. Hence what was pos-
sibly the greatest ecologir_~al disaster of all time was not total.
Yet--and this was the t!~~ird phase in this prehistoric process--there came
a time when the Rio Grande-Walvis rise also yielded and thereby opened the
. Srazil-F ngola Basin to the ocean. During a period of some 10 million
years--from the 80 millionth year to the 70 millionth year--the South
Atlantic Ocean definitively separated America from Africa. But this up-
heaval came too late to destroy the source rocks, or at least those that
t;ad formed close to the coasts. And that is why there is excellent hope of
finding oil along the African coast and likewise along the coast of Brazil
and Argentina.
Africa's Undiscovered Oil
That deep-sea oil which lies more than 200 meters below the surface of the
sea is the oil of tomarraw. All coastal African countries can expect to
profit therefrom. But technology sti11 has to make this possible. Current
technology permits exploiting only shallow off-shore deposits, i.e. those
less than 200 meters under the water. Furthermore, such exploitation has
to be a paying proposition. At 30 dollars a uarrel, the price of oil is
undoubtedly still not high enough to enable governments and oil companies
to begin this new adventure, other than on a strictly experimental basis.
y
For the near future, hawever, Africa has other substantial assets. But ex-
perts totally disagree, on these assets. Results of a survey conducted by
the F'rench Petroleum Institute are significant in this respect. Estimates
by experts the institute questioned about "the ultim.~.te recoverable oiI re-
sources" vary for sub-Saharan Africa alone from 2.3 billion tons for the
most pessimistic of the experts to 40 billion tons for the most optimistic.
This is a considerable margin of error. It is even greater when we compare
these figures with annual African oil produetion which is, year in and year
out, slightly less than 3 00 million tons, half of which is from south of
the Sahara. According to the most pessimistic estimate, sub-Saharan Africa
has only 20 years of production ahead of it, whereas the mos t optimistic
estimate is that there are 270 years of production remaining.
~
Where does the truth lie? If only we could compute the average of the
estimates given by the experts and count on that average as the most prob-
able figure: But this is precisely what we cannot do, because each one
of these estimates has the same chance of being true. Not to mention the
fact that they are not all independent one from the other. In addition,
the reference price used by the French Petroleum Institute was 20 dollars
per ba=rel (1976). That price can naw be considered out of date, even if
we take into account the inflationary pressure which has eroded the value
of the American dollar since 1976. But revising the reference price upward
tends to give more weight to the optimistic estimates about Africa's reserves.
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(1 110 �100 ~t1.a. ~ .
- ~ ~
$~ssin Bresil �M9ola confine (2
~`y
� ~ Ride Rio Gra~de -Walvis ~3 ~
/ i ~s ~
. Bassin Cap�Argentine confine ~
~ .M J '
~ a Ride Falkland�Agulhas (5~
~ ~ ~~y
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(6> 95 m.a. ~ ~
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- r:;~ Bassin aceanique owort ~ ,
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. LATINE ~
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_ Bassinsceean~ques ouvens(9)
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c ~o> La d~rive des continents ~ ~
4
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x~y:
1. 110 to l0U million years ago
2. Brazil-Angola closed basin
3. Rio Grande-Walvis rise
4. Cape of Good Hope-Argentina closed basin
5. Falkland-Agulhas rise =
6. 95 million years ago
7. Open ocean basin
8. 80 to 70 million years ago
9. Open ocean basins
_ 10. Continental Drift Process
It is even more difficult to determine the status of ~,frica's potential
reserves north of the Sahara. Like most other studies, the French Petroleum
Institute's survey is of little use on this subject, because it considers
, North Africa and the Middle East as a single entity. Estimates for this
entity vary from one expert to another: 55 billion tons for the least
optimistic, 300 billion tons for the most optimistic. Nevertheless, the
spread is narrower than for the estimates on sub-Saharan Africa. .
Hence the only sure conclusion we can draw from all these expertises is
that Africa's oil resources are sti11 largely unknawn. If we consider what
- is already known, the contradictions of the experts--contradictions that
are greater for Africa than for any other region of the wQrld--are even
less surprising.
_ Actually there are four ma,jcr distinguishable oil "provinces" in Africa:
the North African bloc (A lgeria, Tunisia, Libya, an3 Egypt), the Gulf of
Guinea, the Chad Basin, and the Zaire Basin. The first two provinces are
close to t~e sea and their resources are relatively well known. The latter
two provinces consist of inland basins and are just beg~nning to be ex- -
plored.
1. The North African "province"--from which M~oroccQ must be Pxcluded from
the geological viewpoint--is not onl.y highly active but still has very large
_ untapped potential reserves. A geologist employed by a large international -
company told us: "We have not heard the whole story about the Algerian
reserves." Then he added, with a touch of humor tinged with bitterness:
"If Algeria's exploration programs have not b~een fruitful, it is because
Algerians ca lled upon Soviet technical assistance in that field:"
In Libya, the most recent offshore discoveries have been most encouraging.
Although for the past 10 years that country's production has leveled off at
between 70 and 100 million tons per year--after having reached a level of
160 million tons in 1970--drilling activity has resumed at a rapid rate -
since 1977.
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~ As for Egypt, it too is the scene of intense prospecting activity. Figures
published by PETROCONSULTANT show that during the iirst nine months of 1979
that country had rne greatest number of active exploratory drilling proj-
ects. Egypt's prod~1ction has also greatly increased these past few ye~rs:
12 miLlion tons in 1975, 16-17 million tons in 1976, 21 million in 1977,
and 28 million in 1978.
Great Expectations
Tunisia is part of this same oil "province." Although it has had rather
disappointing results thus far, this country has been the subject of re-
- newed interest the past few months because the Tunisian offshore area is
- thought to be as promising as the Libyan offshore area.
2, The second relatively well-knawn African oil "province" is the Gulf of
- Guinea region. Centered in Nigeria, this "province" is bounded on the
northwest by Benin, Togo, Ghana, and the Ivory Coast, and on the south by _
Cameroon, Equatorial Guinea, Gabon, Congo, the Angolan exclave of Cabinda,
_ and Angola. It is not by mere chance that the largest de~osits were dis-
= covered in Nigeria. Most of the deposits are there thanks to nature's
= prodigious gift of the deltaic region formed by the mouth of the Niger
River, a gift which has but few equivalents in the world and none else-
where in Africa. Discoveries in Cameroon have revealed the southern tip of
this magnificent basin that has enabled Nigeria to become a giant oil pro-
ducer. Its production in 1965 was unly 13 million tons, but by 1973 its
output had c?imbed to 100 million tons and has remained at approximately
that level ever sinc:e. Yet the further one gets from that "magic delta,"
the more difficult prospecting and exploration c~nditions bec.ome, until in
Ivory Coast, for example, such activity demands almost heroic measures.
Despite such difficulties, the efforts made in that area are starting to `
show results. In the early 1980's, annual production is expected to reach .
a level of 400,000 tons in ivory Coast, 500,000 tons in Ghana, 750,000 tons
in Benin, 1.4 million tons in Cameroon, and 2.5 million tons in Congo. -
Angola's annual production will probably have risen to 10 million toas by -
that time, in other words, to about the same level as Gabon's annual out- ~
put. If Nigeria were to authorize maximum capacity production (120 million
tons), nearly 150 million tons could be extracted from the Gulf of Guinea
each year. Even more important than this impressive overall figure.is the
fact that all the countries we have mentioned will became self-sufficient
in oil, if not even net oil exporters. Under these circumstances, it is
conceivable that oil may once again excite the most level-head~d persons.
3. The virtually unknown oil "provinces" of the Chad and Zaire basins have
long stirred the imagi.nation of geologists and explorers. Hence it-is not
astonishing that discovery of the slightest drop of oil on the borders of
Lake Chad receives a great deal of publicity. The fact is that the formative
conditions of the Chad Basin, like those of the Zaire Basin, are similar to
the conditions which made the Libyan geological miracle possible.
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With just a very small amount of imagination, it is really not difficult to
picture the possible effects of a discovery in the very heart of Africa of
another Libya headed by another Qadhafi. Especially since Chad and Niger, -
the beneficiaries of this new miracle of nature, have coum~on borders with
I~ibya .
In a June 1978 document outlining new oil prospects ix~ the non-OP~C
countries, the French Petroleum Institute credited these same two countries,
Niger and Chad, with having the largest "ultimate reserves" in Africa (ex-
cluding the African OPEC countries). The reserves for each of these two
countries were estimated to be more than 200 million tons. Inasmuch as
both countries are not densely populated, one can, in fact, imagine what
- geopolitical upheavals conf.irmation of these figures would cause. At the
present time, however, these figures are mere estimates.
It is a well-known fact that oil exploration activity has halted in those
two countries because of political agitation. Yet we could logically ask
ourselves whether indeed the opposite is not true, namely that the politi-
cal unrest was caused by the oil prospecting activity.
Expens ive Surgery
On the other hand, we mus t not underestimate the logis tical difficulties of
such prospecting. At 1,500 kilometers and even 2,000 kilometers from the
neares t coast, exp loration becomes a veritable feat of strength, skill, and
ingenuity. Furthermore, it is not enough to discover a small deposit like
those found in ivory Coast or Benih.. Considering the transportation costs
over such distances and on undeveloped roads or trails, the few barrels
- that could be extracted would be nonexportable. In addition, they would
not be numerous enough to warrant constructing an on-site refinery, at least
according to ordinary profitability standards. In other words, Niger and
Chad will become cil producers only if they produce it in large quantit,y.
_ The very fact of their distance from the coasts makes only large-scale pro-
duction feasible for them. Hence the importance of political conditions in
those countries. The same may be said of Zaire, other things being equal.
Geologists ther~selves acknowledge that theirs is not an exact science. The
parameters that have to be considered are extremely numerous. And for each
case it is very difficult to distinguish the "critical parameters," i.e.
those which must be given preferential consideration. Geologists are often
obliged to reason from analogy: a certa,in terrain displays the same char-
acteristics as another that has already proved to be a sponge of oil, for
, example, the Lake Chad Basin is camparable to the Sirte Basin in Libya,
_ a basin which, incidentally, was discovered practically by accident. Con- -
sequently, geologis ts should normally expect to find a new oil "province"
in the Lake Chad Basin. Such reaeoning is extremely dangerous, however,
; And until there has been exploratory drilling, nothing is ever certain.
The geologist is~like a doctor who cannot rely solely upan auscultation
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~
and is obliged for each diagnosis to become a surgeon. $ut surgery (i.e. ,
exploratory drilling) in the heart of Africa is 50 times more expensive
than in the United States.
Refining, Aistribution, and Nationalization
"To live blissfully, we must live hidden from view. We seek no publicity. ~
We do our work and want to be judged on the basis of our work." The per-
- son who told us this is his company's executive responsible for supplying
oil to almost all of French-speaking Africa. His company is one of the
"Seven Sisters." His headquarters is on the top floor of one of the La
- Defense tower buildings from which a person can view the i~nense panorama
of Paris. Through the mist, we could make out the Arc de Triomphe and
Montmartre. It was a gloomy day. The French capital seemed to be
prostrate and stagnant. As if to illustrate this impreGSion, the execu-
tive murmured: "What a difference from Africa, at Least from the market-
ing viewpoint: Here consumption of petroleum products is at a standstill
and we expect no improvement whatever for the next few years. For my
colteagues who handle marketing in Europe, it's somewhat depressing and
especially difficult. In Africa, on the other hand, we foresee an annual -
increase of 7 to 8 percent in the demand for petroleum products during the
1980's. That's because we are starting from a v~ry low level and this de-
mand involves vital needs. At such a level it is inconceivable that people
will be rationed. Rationing is good for Europe. Africa, however, has not
experienced the "crisis" and "will not do so."
The figure~ back up the oil executive's opinion. African consumption of
~ petroleur.i products has indeed steadily increased these past few years
despite the quadrupling of the price of crude. That consumption rose from
~2 million ton~ in 1970 to 64 million tons in 1979. This progression is
even more remarkable in thaC these figures include South Africa's consump-
tion (15 million tons) which has declined because of the crisis.
As may be expected, this continuous growth in the demand for petroleum
products is swamping existing support facilities. Our "oilman " confirmed
tt~at "the refineries in Daka.r (Senegal) , Abid jan (Tvory Coast) , and Port-
Centil (Gabon) are no longer able to satisfy market requirements. These
are the principal refineries in West Africa and Equatorial Africa, and also
those on which countries in the interior depend for their supplies."~
He then explained: "~'he Dakar refinery was built by the companies, with the
Senegalese Government acquiring a 10 percent interest therein. It has an
annual capacity of 850,000 tons. Ma,rket demand, hawever, is for an ad-
ditional 100,000 to 150,000 tons of refined products, and these have to be
imported directly. The current policy of the authorities in Dakar i~ not
to oust foreign countries but to allow them a sort of supervised operating
- freedom. It is somewhat the same system as in France.
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"The supply process is one of 'purchase and sale,' to use the British and .
- American t~rm. This means that we, the oil companies, sell crude to the
refining co~mpany and our local subaidiaries purchase the finished product -
and handle its distribution. The government may also participate in sup-
plying the cruc3e whenev~r it can obtain oil at more favorable terms of pay-
ment. I do not refer to discount prices, because OPEC gives no discounts,
but to credit terms that are slightly less expensive than those in the
internation,al money ma.rket and that are related to oil purchases. The
Islamic DevE:lopment Bank, for example, grants this type of loan. Iran _
likewise wa:i, at one time, interested in Senegal on Islamic grounds."
Matter of Philosophy
Our oi.l executive added: "The situation in Abidjan is a bit different to
the extent that the govern,ment has acquired a much larger interest in the
refining company. Distribution of refinQd products is not state-control-
led, but the :Cvorian Petroleum Company, PETROCI, is trying to establish
its own distri.bution network that is still only a very small network.
"In this connec:tion, it should be noted that the Ivorian authorities have
_ benefited from the fact that the major oil companies did not have the same
policy on the i:~sue of governmental participation. Some of them, Shell
and British Petroleum (BP), agreed to 50 percent state participation in
their local distribution subsidiaries, Shell�~~Tvory Coast and BP-Ivory
Coast. So the Iv~~rian Government holds a 50 percent interest in each of
these subsidiaries. Conversely, Mobil and Total have retained 100 percent
control of their local subsidiaries."
As our "oilman" explained it, each of these two approaches has its ad-
vantages and disadvantages. The first approach--50 percent governmental
participation--provides privileged access to governmental markets. Further-
more, this seminationalization may possibly serve as a shield against ulti-
mate full nationalization. The disadvantagss ~f this approach are that the
- companies are no longer masters of their subsidiaries and must share half `
of their dividends. In addition, whenPVer the companies have to invest
funds in modernizing or expanding their facilities, they have to convince
the government authorities to share in these capital expenditures, and that
is no easy task. "As you know," the executive remarked, "there are not
many people in Africa who work on a long-term basis."
Adherents of the second approach are in the exactly opposite situation: the '
oil companies are masters of their subsidiaries and encounter less manage-
ment difficulties. But they may be at a disadvantage in obtaining govern-
ment contracts and may also fear ultiniate 100 percent nationalization.
Consequently how is one to choose between the two approaches? Our "oilman"
diffidently replied: "It's almost a matter of philosophy ar~d temperament.
All things considered, everything depends on haw one views the long-range
future of these countries and the risks one is determined to take in that
future's interest."
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~
Seven Sisters
In any case, the Abidjan refinery's capacity is to be increased from 2 to ~
4 million tons. This is a large-scale project in that it will include the
last ~aord in hydrocrackers, an apparatus that will make it possible to
absorb current and future surpluses of heavy fuel oils. The entire pro~-
ect calls for a capital investment of 100 million CFA francs. It will also ,
permit laying the foundations of a petrochemical industry.
The third large refinery on the coast is at Port-Gentil, Gabon. It has an
annual capacity of 850 million tons. All of its stock is owned by Elf and
Shell. There are no plans at present to enlarge the refinery. On the '
other hand, a refinery is to be built at Victoria in Cameroon, a country
where something important ma.y be about to happen.
The problem in the inland countries is altogether different, because there
is nc thought of installing ref ineries there at this time. The level of
_ petroleum products consumption is such that refineries would not be a pay-
ing proposition. Our "oilman" explained: "Our capital investment in those
countries consists mainly of storage tanks and trucks. Our main problem
is avoi.ding running out of stock. Believe me, this demands a rather com- -
plex logistical system. Especially since transportation costs are enarmous."
How are the big oil companies perceived in Africa? According to our "oil-
- man," their refining and distribution activities show a"comfortable" mar-
gin of profit. When asked if there are ever any "oil scandals" such as
those uncovered in the United States and Europe fram time to time, he re-
plied: "Our subsidiaries are companies incorporated under local laws. As
a rule, 100 percent of their employees are African. In my opinion, there
is no fear of nationalization, unless there are very serious political dis-
orders.
In any case, such upheavals are unforeseeable. If we look at things solely
- from the economic viewpoint, we need have no fear of being ousted from any
country. And all the more so because there is the deterrent example of
those cc;~;.tries which did nationalize and ended up in disaster: Zaire,
Central African Republic, and Congo. In the Congo, for example, the re-
finery built at Pointe Noir is just simply not functioning. As a result,
the Congolese are now wondering how to go about calling upon the oil com-
panies to help them once again. The same is true with the Zairians. These
disastrous examples have made their point and the sensible countries have
clearly realized that it is better, in their enlightened self-interest, to
- remain associated with us."
The same view was expressed by the execucive in charge of exploration for
one of the other Seven Sisters. He said: "Our job is to search for oil.
We need to be encouraged by geological and not political considerations.
- What we consider to be crucial is the constitution or reconstitution of oil
reserves. Consequently, we do our utmost to achieve that objective."
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"But this oil you discover," we emphasized, "you are liable to have it con-
fiscated once it actually starts to flow." He retorted: "Of course, but ~
it is even less useful not to find any oil at all."
Thus in oil refining, distribution, and exploration, the companiea operat-
ing in Africa appear to be self-confident (and domineerin g?). They knaw
they are indispensable. They are prudent. They carefully nurture their
public image. And we ca.nnot avoid noting that they are returning to those
very countries from which they were earlier expelled.
Consumption and Distribution in 12 AFrican Countries
Increasing Consumption
The leading consumers of petroleum products (gasoline, ke rosene, gas oil,
and diesel fuel) in our sample of 12 African countries are Ivory Coast,
Tunisia, Senegal, Cameroon, and Gabon.
For the first time ever, consumption in ivory Coast reportedly rose in 1979
from 8 to 12 percent depending on the product. In Gabon, it rose from 2 to
9 percent. -
Despite successive price increases, conservation efforts have generally been
very insignificant. From 1977 to 1979, only three countr ies reduced their
consumption,of gas oil and diesel fuel: Gabon (-10 percent), Mauritania
(-7 percent), and Togo (-6 percent). But the latter two c ountries consid-
erably increased their consumption of jerosene and gasoline: 24 and 19
percent for Mauritania, 16 and 20 percent for Togo.
Gasoline consumption rose moderately in three countries: Chad (6 percent),
Tunisia (7 percent), and Senegal (9 percent). But ~uch h i gher increases in
f consumption:of the same product were recorded in Cameroon (29 percent),
Upper Volta (27 percent), Gambia (24 percent), Niger (22 percent), and
Ivory Coast (2 1 percent).
The greatest increases in kerosene consumption were recorded in Niger (38
percent), Cameroon (35 percent), Gambia (31 percent), Ivory Coast (28
percent), and Mauritania (24 percent). The lowest increases were in Gabon
(1 percent), Upper Volta (4 percent), Tunisia (9 percent), and Mali (10
percent).
Gas oil and diesel fuel consumption rose 51 percent in Ni ger, 37 percent in
Gambia, 28 percent in Tunisia, Upper Volta, and Ivory Coas t, and 25 percent
in Mali.
Oil Companies and the Market
Mobil ranks as the leading oil company in the domestic markets of our sample
of 12 African countries. Such is the finding of an analys is of 1978 statis-
tical data on consumption of petroleum products.
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~ Mobil leads some 10 oil companies by supplying the largest number of
countries at least 20 parcent of the products they consume. It is followed -
by Shell, British Petroleum, Total, Texaco, and Esso. The other companies
include Fina and Elf. The latter operates solely in Gabon.
Mobil is the leading supplier of aviation gasoline. Eight countries pur-
chase 25 to 100 percent of their consumption from it. These include:
Ivory Coast (25 percent), Gabore (33 percent), Niger and Mal~ (72 percent),
Togo and Upper Volta (100 percent).
British Petroleum maintains a very good position in the gas oil and diesel
fuel markets. Six countries buy 25 to 49 percent of their consumption from
it. These include: Ivory Coast (25 percent), Mali (36 percent), Upper
Volta (38 percent), and Gambia (49 percent).
Shell is an equally good position in the kerosene market (23 to 26 percent
in four countries) and in the aviation gasoline ma.rket (22 to 100 percent
in five countries). Texaco holds a good position only in the kerosene
market. It supplies 21 to 26 percent of the domestic kerosene consumption
in four countries.
Lastly, Esso's ~est standing is in aviation gasoline sales: 26 to 46 per-
cent in three African markets.
~ Oil and a Continental Policy
On paper, Africa has no oil problem. The continent's combined production
greatly exceeds its current requirements. One figure is enough to illus-
trate this fact: the consumption of African nonoil-producing countries is�
not more than 10 million tons, or 4 percent of total African production.
And a11 oil-producing countries are, i:n varying degrees, net exporters and
hence self-sufficient.
The trouble, hawever, is that Africa as a homogeneous economic space--or
one in the process of becoming homogeneous--exists only on paper, and even
such existence is questionable. With the result that any attempt to make
an overall approxima.ta:on quickly proves to be ridiculous.
The first point it is particularly important to bear in mind is
that the continent as a whole is still closely tied to the economic system
. established during the colonial era, a basic system of trade that con-
sisted in exchanging low-value ma.nufactured goods for Local products.
Everywhere in Africa, countries are primarily engaged in the export-import
trade. They sell their raw materials--mineral or vegetable, unmanufactured -
or semimanufactured, and incorporating more or less value added locally--
and they import what they need: food products, capital goods, etc. These
- exchanges will perhaps lead one day to the emergence of veritable national
or multinational industries capable of covering the needs of expanded
domestic markets. This is possible, but Africa has not yet reached that
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stage, even though some progress in that direction can be noted, especially
in the three countries of the ;faghreb.
The second point is just as important as the first. It is that this trad-
ing activity is mainly with the industrialized countries. How could it be
otherwise at the present time? The industrialized countries are the de-
manders of the raw materials offered and they also have the goods Africa
desires. The major African market is the port, a fact which accounts for
the tragedy of landlocked countries.
There is no modern inter-African trade. Such trade represents scarcely 5
percent of the international trade of the countries concerned. On the
other hand, there is some traditional inter-African trade: caravan routes,
speculation on grain crops, secondary traffic in oxen and cola nuts,
diamond smuggling, and more recently, mari,juana smliggling. But by
definition, there are no statistics or taxes on these trade activities.
They are more the relic of outmoded systems than the emergence of new
forms.
. Oil is no exception to this very specific conjun:ture. It is handled like
any other natural resource (copper, iron, phosphates, etc.). Except that
at the same time, it represents a necessary consumer good. Having oil
does not mean merely being able to sell it. It also means not needing to
buy it.
The refinery question is highly characteristic of the absence of an oil
policy at the continental level. Each country, oil-producing or nonproduc-
ing, wants its own refinery. The average capacity of each one of these
refineries is approximately 1 million tons. Yet it is 2n establishad fac~
tiiat a refinery of that size is not economically viable, especially when,
as is the case in Congo-Brazzaville, the lack of technicians precludes
putting the plant into operation. ln Africa, there is not one single re-
finery operated as a cooperative venture by several countries. This co- "
operative approach has been used for cement, in Togo for example, but not
for oi1. The only possible explanation is that oil is a sensitive product
involving considerations of national independence. If such is indeed the
case, then this situation is indicative of the level of mistrust that cur-
rently prevails in inter-African relations. Each country in Africa fears
the other African countries and has no desire to become too closely linked
_ to them on vital matters. The African petroleum industry consists solely
of individual cases that are, in fact, coordinated by the major oil com- -
panies .
Another characteristic of the African petroleum industry is that it has ~
three countries that are medium-size producers (medium-size on the inter-
national scale, of course), Libya, Algeria, and Nigeria (50 to 114 million '
tons), and six countries that are small producers (1 to 25 million tons).
But this division into two distinct groups is only very partially indica-
tive of the real situation.
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. 1
Libya is unqnestionably No 1 both by the s;.ze of its reserves as well as
its production capacity. The country's chief characteristic is that it
consists m~stly of arid desert and has a population of less than 3 million.
This weakness is a factor of strength, however: each Libyan has the income
from approximately 55 tons of oil per year and Colonel Qadhafi has a con-
siderable financial surplus that enables him, inter alia, to support his
foreign policy and maintain a large army. Libya is the only African
country to which oil has given a certain degree of external power.
Nigeria has a population of 67 million and a per capita oil production of
_ 1.4 tons. But here everything changes. What is a"gold mine" north of the
Sahara becomes merely a valuable supplement in the tropics, but a supple-
ment that is insufficient to alter fundamentally the state of affairs.
Especially since the battle over distribution of oil revenues does not
facilitate managing a country which, moreover, is suffering from an alarm-
ing drop in agricultural production (cocoa, peanuts, palm oil, etc).
Changing Living Conditions
Algeria is the smallest of Africa's three major oil-producing countries,
with an annual production of 57 million tons compared with 95 mill.ion tons
in each of the other two countries. But its ratio of production to popu-
lation is better than Nigeria's. With a population of 18 million, Algeria
has a per capita production ~f 3.17 tons. On the other hand, its reserves
- are sma.ll--15 years of oil at the present rate of production--and the
ch.ances of any new discoveries are almost nil. For this reason, Algeria
has chosen to allocate its oil revenues to a program of accelerated in-
dustrialization capable of supporting the national economy after the oil
runs out. Tne results of this policy are controversial. Will it, there-
fore, be continued? Up to now in any case, Algeria has had no financial
surpluses and its national oil campany, SONATRACH, the only one of its
kind on the African continent, has practically never taken action outside
of its own establishment, except in the case of a few refineries.
Among the small producers (11 million tons), Gabon holds a place apart be-
caus~ of its small population. Its production to population ratio is about
20 tons, a substantial figure as it is. This wealth coupled with its
uranium, manganese, and lumbering permit the country to live very well on
its income without worrying too much about the future. But Gabon is
actually a sort of principality, an enclave of prosperity in the midst
of poverty-stricken surroundings. Yet even if Gabon wanted, it has neither
the material nor human resources to play an important role at the inter-
African level.
As for the others--Egypt, Tunisia, Congo, and Angola--their production is
either too small to be really significant, as is the Congo's case, or their
population, like Egypt's, is too large for oil to "change living conditions"
at the present level of production.
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Lastly there is the case of Cameroon. Deposits have been discovered there
but their exact size is still unknown. There has been some talk of a pos-
sible production of 10 million tons, or 1.25 ton per each one of Cameroon's
8 million inhabitants. This would certainly be a positive development far
the country, but not a decisive ~ne. Other experta have called these de-
- posits a veritable "gold mine": 50 millfon or indeed even 100 million tons,
i.e. between 6 and 12 tons per capita.
Let us dwell for a moment on that last figure, not so as to give countenance
to it, but in an attempt to imagine what would happen should that figure
materialize. For the first time, we would see emerge in Tropical Africa a
geographically well-placed country with sufficiently diversified natural
resources, a country that would at the same time become a financisl power.
Such an emergence would probably bring about a new political bal.ance in
West and Central Africa; because Cameroon is at the junction of those two
r~gions. The Cameroon-Chad axis extending up to the Libyan border would
see its strategic power substantially enhanced.
Illusions
Would Cameroonians then take advantage of their new power to propose
creation, at QAU level, of an inter-African oil consortium responsible
for managing a small percentage of continental production in the interest
of those countries in the nonproducing areas? Establishment of such a con-
sortium would be doubly beneficial. It would solve the oil bill problem
of the poorest countries and make it possible to lay the foundations of a
future African oil company, the current nonexistence of which is a serious �
- shortcoming.
A narrow view of national self-interest has thus far blocked any move in
this direction despite the fact that it is the way to creation of a real
African economic space. The oil market's present structure results in
anonymous collection of oil by the major oil companies and a redistribution
that is just as anonymous, with all equilibrating readjustments being made
at a stri.ctly commercial level. This structure rules out any solution
other than creation of an African oil consortium. Africa can be sovereign
in this field only if it succeeds i.n attaining the same degree of inte-
gration as the campetition. When will we have an African oil authority
capable of undertaking such a project? As we have seen, no such authority
exists today.
The Old and the New
No less than 17 African countries are considered to be potential producers
of oil or natural gas. Those countries are listed in Table 1 at the end of
this article. This table was prepared from statistics published by the
World Bank. Significantly, Cameroon does not appear on this list, a fact
that shows just haw quickly things can change in this field, ~he discovery
of a large natural gas field in offshore Cameroon did occur, in fact,
after compilation of the data in Table 1.
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' In spite of these potentialities, which after all are far fram being all
- exploitable, AFrican oil and natural gas resources remain unequally dis-
, tributed, especially when considered in rela~ion to the respective popu-
lation figures of the different countries.
None of the countries considered to be without domestic resources have
large populations. The most populated of these countries is Upper Volta
with its 6.2 million inhabitants. Yet on tne other hand, the most heavily
populated countries are far from all being the most richly endowed with
"black gold." Admittedly nature has been relatively generous to Nigeria
- which produces 100 million tons of crude oil per year, but its population
of 80 million makes ~t the continent's demographic giant. Similarly the
18 million Algerians are not too poorly off, particularly when considering
their country;s rich natural gas resources. But what about the 40 million
Egyptians, 26 million Zairians, 29 a~illion Ethiopians, and 16 million
Sudanese? Even though there is possible hope for fruitful prospecting in
each of these nations, they are currently victims of nature's stinginess.
- Compared with the aforementioned populations, the inhabitants of Gabon,
and particularly of Libya, appear to be especially privileged by the
fortunes of geology and oil exploration. Gabon produces 10 million tons
for a population of 500,000. Libya produces 10 times as much for a popu-
lation of 3 million. Libya is, therefore, the only country really compar-
able to the "miraculous" oil-producing countries of the Persian Gulf.
Paradox
Strictly speaking, most African countries have such small populations that
a small level of prodnction would be enough to make them self-sufficient in
energy. Of the 34 nations listed in Table 1, 26 have a population of less
than 15 million, and 17 have a population of less than 6 million. But this
Balkanization, this pa.rceling out of Africa has one drawback: energy-
related capital investment, particularly in oil prospecting, exploration,
and production, ;.s uncertain and costly. Such costs can be borne better
when they can be spread over a large population. The table clearly shaws
_ that many of those lightly populated countries are currently still in-
capable of impor~ing crude oil (note the number of zeros in the tab'le's
first two columr~s) .
These countries are obliged, therefore, to import already processed products,
because a refinery on their territory is not an economically viable option
at this time. Noteworthy in this connection is the advantage possessed by
countries with access to the sea, because transport by ship costs a great
deal less than by road. This explains why a number of these coastal
countries, even when not oil producera, are net exporters of refined
products--see minus signs in 3d and 4th columns of the table--because they
refine oil for others, and in this way refining does become profitable.
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If we now total these different import and production figures, we can bring ~
out the paradox of African oil even more clearly. Africa as a whole pro-
duces nearly five times more oil than it consumes. If this oil Frere equally
distributed or else if Africa constituted but one and th~ same nation, there _
would be no oil problem in Africa. The same paradox applies to Africa's
total energy balance.
~ Operations of Large and Small Oil Companies
All of the large oil companies have operations in Africa. All of them
participate in African oi1 exploration, production, refining, and dis tri-
bution activities.
At the present time, however, their African operations are but a sma.ll part
of their total worldwide activities. To measure that part, we are actually
, obliged Co use the data compiled by the Chase Manhattan Bank which publishes
a yearly economic and financial study of the world petroleum industry.
The most recently published data show the geographical distribution of ex-
penditures by the companies for geological and geophysical surveys in 1977.
This information is an excellent indicator of their oil exploration efforts.
That geographical distribution, in millions of dollars, is as follows:
United States, 1,645; Canada, 450; Venezuela, 50; other Western Hemis phere
countries, 150; Western Europe, 450; Africa, 300; Middle Ea.st, 125; and
Far Eas t, 225.
Thus, according to these figures, in 1977 the oil companied allocated less
than ane-tenth of their world geological and geophysical survey budge t to
exploration of the African continent (including South Africa), and less than
a fifth of what they spent on exploration in the United States alone.
Nevertheless, this figure of 300 million dollars is rather favorable to
Africa, and it has certainly increased since 1977. Africa's share of the
world petroleum industry's total capital expenditures is even much smaller:
3.8 billion dollars versus 65 billion dollars for Che entire world (1977
f igures), or about 20 percent. Another noteworthy point is that two years
- ago exploration outlays for Africa had already exceeded outlays for the
Middle East (only 125 million dollars).
In Table 2 at the end of this article, we have attempted to depict the way
the major oil companies have shared the risks of exploration and production
in Africa. It will be noted im~ediately that the countries in which foreign
companies have explored and drilled the most are the oil-exporting countries:
Nigeria, Libya, and Gabon. Algeria, however, is an exception to this situ-
ation, because that country is knawn to have taken almost complete control
of all exploitation of its mineral resources.
Also noteworthy is the special interest shown by the companies not on ly in
countries like Angola, Cameroon, and Tunisia, countries which have shawn
themselves to be medium-size oil producers, but also in Kenya, Morocco,
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Somalia, and Zaire where prospecting has been quite disappointing up to
now. On the other hand, the ma~or companies have rather neglected Chad
and Niger which are at least as promis ing as Zaire.
Gamble on the Future
According to Table 2, British Petroleum is without doubt the least African
of the Seven Sisters. It had established itself in only one country, but
admittedly that country is an oil giant, namely Nigeria. Bad luck for BP,
hawever: it was recently nationalized by the Nigerian Government, along
- with Shell, the other sister that had taken an interest in that country.
Mobil's exploration activity is relatively limited. On the other hand, as
we showed earlier, that company does p lay a most important part in refin- _
ing and distribution operations throughout West Africa. The other sisters ~
' are all well represented, with a marked preference for the best known oil
"provinces," Tunisia, Libya, and Egypt on the one hand, and the Gulf of
Guinea on the other. It will be noted, however, that the leading sister,
E~ton, having arrived after the others and probably too late, had to make
shift with Ivory Coast and its small deposits. Yet in dealing with the
Ivorian deposits, E~son had to display remarkable perseverance. After
drilling three successive dry holes, E lf of France, a partner in the oper-
ation, withdrew from the project. But Elf had cause to regret its action,
because the fourth well brought in oil. Shell, the most African of the
Seven Sisters, also held on, though it did reduce its participation some-
what. The result is quite paradoxical: Ivory Coast, Africa's most
"Frenchified" country, now awes its oil to Exxon, the all-powerful multi-
national company par excellence. -
It is true, however, that the French campanies, CFF' and Elf, did do con-
siderable work in other countries and consequentl.y are on a par--this is
especially true of Elf--w ath their inf initely more powerful big sisters.
It must be noted, however, that the effort of each French company is com-
parable to that made by the Italian company FNI that has made its presence
felt particularly in North Africa.
Two other companies--known as "independents" because they do not belong to
the Seven Sisters club--have succeeded in penetrating Africa. The fruit is
Occidental whose fortune stems from its miraculous discoveries in Libya,
but which is also established in Angola and Niger. The second is Continent-
al, the only company to have taken the risk of being an "operator" in Chad.
It has also tried its luck in Tunisia and the Western Sahara. Its efforts
in Chad and the Western Sahara, are totally compramised for the moment
because of the political difficulties in those areas. Bu~ Continental's
very risky gamble on the future may we 11 prove to be profitable in the
long run.
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Tab le 1
AFRICAN NON-OPEC COUNTRIES
Domestic Popu-
Net Imports Production lation
Crude Ofl of Petroleum of Crude (in mil-
Imports Products & Nat.Gas lions)
(in millions of inetric tons)
1972 1976 1972 1976 1972 1976
Oil or Natural Gas Producers
~ Cameroon 0 0 0.26 0.31 0 0 '~;6
Morocco 4.76 2.63 0.05 0.1 0.03 0.08 17.8
Potential Oil or Natural Gas
Producers net exporter)
Benin 0 0 0.12 0.10 0 0 3~2
Cent. African Rep.
Chad
_ Ethiopia 0.6 0.5 -0.16 -0.2 0 0 2g.7
Ghana
_ Guinea
_ Ivory Coast
Kenya
Madagascar
- Ma lawi
Ma li
- N,auritania
Mozambique
Niger
Senegal
Sudan
Tanzania
Uganda 0 0 0.4 0.3 0 0 11.9
Countries WiChout Domestic
Resources
Burundi 0 0 0.12 0,02 0 0
Gambi4 3 � 9
Mauritius
Rwanda
Upper Volta 0 0 0.06 0.07 0 0 6.2
Net Exporters of Oil and/or
Natural Gas
Angola 6.8 3.8 -0.1 0.05 7.1 4.5 5.5~
Congo
Egypt
Tunisia
Zaire
- 19
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APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200100021-5

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200100021-5
~
Table 1 (continued)
AFRICAN OPEC COUNTRIES
Crude and Natural Exports Population
Gas Production
(in millions of inetric tons)
1972 1976 1972 1976
Algeria 49 52 47 46 18.3
Libya 106 94 106 89 2.9
Gabon 6.1 11 5.8 10
Nigeria 82 100 80 9g 7g,5
20
FOR OFFICIAL USE ONLY -
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200100021-5

APPR~VED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000200100021-5
FOR OFFICIAL USE ONLY
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