Western oil firms face growing troubles in African countries

COTONOU, Benin: Big foreign oil companies are finding it harder to make money in Africa because of the region
African producers such as Nigeria and Angola now ship about as much crude oil to the US as Arabian Gulf producers like Saudi Arabia, according to the US Energy Information Administration.

To meet this rising demand and improve their own growth prospects, companies like ExxonMobil and Total and smaller firms such as Anadarko Petroleum Corp have plowed billions of dollars into the continent at a time when they are effectively shut out of drilling in tightly protected energy sectors in much of the rest of the world.

In Russia and Latin American countries such as Venezuela, governments buoyed by high oil prices have recently moved to take control of energy exploration projects and raised taxes on foreign operators.

Some of these same problems are now popping up in Africa. Governments in Algeria, Chad and Equatorial Guinea have rewritten contracts or oil laws to advance national interests.

Operational risks, including security of staff and infrastructure, have swelled in places like Nigeria. State-run oil companies less focused on profit are snatching business from their Western peers.

Gulf Times