Equatorial Guinea 
Equatorial Guinea Africa's fourth largest US investment receiver

afrol News, 9 April - The small Central African dictatorship Equatorial Guinea has become "the fourth largest destination for American investments in sub-Saharan Africa, behind only South Africa, Nigeria, and Angola," according to a new UG government report. Recent offshore oil discoveries, and the prospects for additional finds, now make Equatorial Guinea "one of the leading areas for oil exploration in sub-Saharan Africa." 

According to the new "Country Analysis Briefs" on Equatorial Guinea, published today by the US government agency Energy Information Administration (EIA), the oil boom in Equatorial Guinea has made the country a major African destination of foreign investments, above all, US investments. US investment - almost exclusively in the oil/energy sectors - had "increased dramatically since 1996," when the oil boom started. 

Recent economic developments in Equatorial Guinea have been dominated by rapid growth in the country's oil sector. Real gross domestic product (GDP) growth was estimated at 65.0 percent in 2001, up from the 16.9 percent growth in 2000, and narrowly missing the amazing 71.2 percent GDP growth witnessed in 1997. EIA reports that economic growth is "expected to remain strong with Real GDP growth of 33 percent in 2002 and 12 percent in 2003." 

Equatorial Guinea recently had "emerged as an important oil producer in the Gulf of Guinea, one of the world's most prospective hydrocarbon regions," the EIA analysis goes. Oil production from Equatorial Guinea averaged 181,000 barrels per day (bbl/d) in 2001. Equatorial Guinea's oil production had increased more than tenfold since 1996. 

The US agency expects that continuing exploration activities and field development "could see production again increase dramatically over the next few years." The Norwegian company Norland Consultants had estimated that an estimated US$ 3.4 billion would be invested in offshore field development projects in Equatorial Guinea between 2000 and 2004. Production currently comes from three offshore fields, with two located offshore Bioko and the third offshore the mainland enclave of Rio Muni.

The Zafiro field (located on Block B, northwest of Bioko) is Equatorial Guinea's largest producer. A consortium comprised of Exxon Mobil and Ocean Energy (Ocean) discovered Zafiro in March 1995. The field now produces more than 100,000 bbl/d, EIA reports. With the beginning of the production from the Jade field in June 2000, Block B's total production now has increased to more than 112,000 bbl/d - but it is expected to increase to 160,000 bbl/d by mid-2002 with further wells from the Jade field.

Blocks F and G, which are both located offshore Rio Muni, include the Ceiba field, where production started in November 2000 and further investments seem most promising. The US-based Amerada Hess (who purchased Triton in 2001) and South Africa's Energy Africa share the exploration/production rights to the blocks. Production from the four Ceiba wells stood at 45,000 bbl/d last year, but large investments are set to elevate this number. The promising the Okume and Oveng discoveries - announced in the fourth quarter of 2001 - are also on Block F. 

The smallest field is found on Block D, including the Alba field, just north of Bioko. The Alba field is also the oldest, discovered in 1991 by the Spanish firm CEPSA. With production at maximum 6,700 bbl/d (in 1999), the field is operated by Marathon Oil, in partnership with minor share owners. Plans currently are underway to expand the utilisation of natural gas from the Alba field.

Government's share of the revenue was also increasing, EIA noted. Government oil revenues increased from 13 percent of receipts earned from oil exports to 20 percent in 1998 following the implementation of the new Production Sharing Contracts with the oil companies. President Obiang has announced plans to renegotiate hydrocarbon contracts to increase the country's participation in oil licences even more. EIA assesses that "the government's share is relatively small by international standards."

Although the EIA report provides a small summary of the political situation in the country, the systematic human rights violations are not mentioned. However, the report clearly informs potential investors of the corruption charges against the Equatoguinean government. EIA refers to foreign aid programs, which had been "suspended in recent years due to allegations of government mismanagement and corruption." The European Union was willing to resume aid "in step with democratic reforms in Equatorial Guinea." 

EIA also quotes the 2001 recommendations made by the International Monetary Fund (IMF) in "a tersely worded statement." These included improving fiscal discipline and transparency; refraining from extrabudgetary spending; fully disclosing government bank accounts abroad; and conducting independent external annual audits of the oil sector. "With oil revenue increasing rapidly, the government may continue to resist donor pressure for economic reforms," EIA observes laconically.

The Equatoguinean opposition earlier has told afrol News that it opposes the strong increase in foreign investments while the country is governed by dictator Obiang and the oil revenue does not reach the country's citizens. Investing in the country was "marginalizing our people together with the Equatorial Guinean opposition," the oppositional party UDI stated. "Not one dollar arriving from the oil and gas exploitation and commercialisation figures in neither the national budget nor in the accounts of any other public agency," a party spokesman said.

Sources: Based on EIA and afrol archives

 

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