Oil producing African countries relies on crude oil exports for a substantial percentage of their revenue.
The Middle East, Asia, and North America are the world’s major oil-producing countries, and these are the locations most often associated with oil production. A few African countries, also produce considerable amounts of crude oil each year. Indeed, countries in this part of the world have 3.6% of the world’s oil reserves.
However, oil-producing countries in Africa have been very reliant on crude oil exports for a substantial percentage of their revenue. They have been badly impacted by the COVID-19 pandemic, with some nations, such as Nigeria, warning of impending recession and demanding international emergency funding to stay afloat.
Africa has seen a considerable drop in oil production during the last decade. Here are the top 5 African countries that produce crude oil.
Nigeria produced more than 1.9 million barrels of oil per day in 2014 to rank as the 11th-largest oil producer in the world. Fluctuations in annual oil production, especially since 2005, can be attributed partly to security problems connected to violent militant groups in the country. In 2021, Nigeria’s crude oil reserves were at $36.9 billion. Nigeria is home to the second-largest proven oil reserves in Africa. However, the U.S. Energy Information Administration (EIA) reports that security issues and other business risks in the country have reduced oil exploration efforts.
The Nigerian National Petroleum Corporation (NNPC) is in charge of regulating and growing the country’s oil and gas sector. The NNPC relies significantly on multinational oil firms to fund development and give expertise.
The majority of the country’s significant onshore oil production operations are run as joint ventures between the NNPC and commercial oil companies, with the NNPC holding a majority stake. Production-sharing contracts are commonly used to organize somewhat expensive and sophisticated offshore oil developments.
The conditions of these contracts can be changed to give international operators sufficient incentives. The top oil firms with operations in Nigeria include Chevron, Exxon Mobil, Shell, Total, and Eni.
Angola is one of the African countries that produce crude oil. In 2021, Angola’s crude oil reserves were at $7.8 billion barrels. In 2015, the country produced roughly 1.8 million barrels per day, but output fell significantly over the rest of the decade. Part of the reduction was due to a cut agreed upon by the country as a member of the Organization of Petroleum Exporting Countries (OPEC). In the South Atlantic, Angola has large offshore and deep-water oil reserves. However, due to substantially decreased oil prices in 2020, the exploitation of these oil resources may be postponed.
Sonangol, or the Sociedade Nacional de Combustiveis de Angola, is Angola’s state-owned oil corporation. It used to be in charge of almost all oil and gas development in the country.
President Lourenço, on the other hand, made significant efforts to establish a new independent regulatory body, the Agência Nacional de Hidrocarbonetos e Biocombustibles (ANHB). The multinational corporations active in Angola are BP, Chevron, Exxon Mobil, Total, Statoil, Eni, and China National Offshore Oil Corporation, also known as CNOOC.
Algeria’s crude oil reserves were $12.2 billion barrels of oil in 2019, maintaining its place among Africa’s top oil producers. However, since 2005, when Algeria’s output was about 1.7 million barrels per day, production has dropped significantly. The country’s falling oil output was largely due to OPEC production limits and a lack of foreign investment. Algeria also exports a lot of natural gas, most of which goes to Europe.
Algeria’s state-owned oil and gas business is Enterprise Nationale Sonatrach. Sonatrach continues to dominate the Algerian oil industry. Lower oil prices, on the other hand, resulted in some improvements in 2019, including a lower tax burden. The international oil giants active in Algerian oil include BP, Total, and Exxon Mobile.
In 2021, Libya’s crude oil reserves were at $48.4 billion barrels of oil. This phenomenal rise was mostly due to a temporary cessation of violent fighting within the country. Libya was also excluded from OPEC’s 2016 production curbs because its output had already dropped from 1.7 million barrels per day in 2010. Unfortunately, as the civil war in Libya worsened, production dropped substantially in early 2020. Despite its problems, the country has Africa’s greatest proven oil reserves.
Libya was engulfed in a civil war between the Government of National Accord (GNA) and the Libyan National Army as of June 2020 (LNA). Before the battles that followed Muammar Gaddafi’s removal, international oil firms were active in Libyan oil production. However, until the instability is remedied, the future will be cloudy.
Egypt, crude oil reserves in barrels of oil was at $3.3 billion in 2021, a remarkable level of consistency.
Between 2014 and 2019, the country became substantially more stable.
Egypt is also Africa’s largest oil producer who isn’t a member of OPEC. The government’s pro-market initiatives, on the other hand, eliminated oil industry subsidies.
Egyptian General Petroleum Corporation (EGPC), Egypt’s state-owned oil firm, has historically dominated the country’s oil output. In Egypt’s offshore and onshore production operations, EGPC collaborates with a number of multinational oil firms. Eni and BP are big investors in Egyptian offshore producing assets. Furthermore, Egypt’s administration has attempted to improve the country’s appeal to foreign investors. Reforms include lowering EGPC subsidies and lowering the amount of money owed to multinational oil firms.