Africa’s gas and oil riches on sale to the highest bidder

Improving co-operation on energy issues is one of the main priorities for EU-Africa relations.

A partnership on energy is one of the eight partnerships which form part of the EU-Africa strategy that is to be launched at the EU-Africa summit. The partnership aims to improve the access for both continents to reliable, affordable, ‘climate friendly’ and sustainable energy supplies and to increase investment in energy infrastructure, according to an action plan for implementation of the partnership. An information document drawn up jointly by the European Commission and the African Union commission says that improving access to electricity and reliable energy services would allow Africa to increase industrial production and add more value to agricultural products.

Algeria and Nigeria are already major suppliers of energy to the EU. The EU is the biggest buyer of Algeria’s oil, accounting for 90% of its exports of crude.

France, Spain and Italy take 15% of Nigeria’s oil exports with the largest share (42%) going to the US. Nigeria has the world’s seventh largest reserves of natural gas.

Andris Piebalgs, European commissioner for energy, has highlighted the need for additional gas supplies from Africa as the EU’s reliance on imports of gas is expected to rise from 50% in 2000 to 85% in 2030.

One project under discussion is the Trans-Saharan Gas pipeline, a 4,300 kilometre-long conduit, which would bring gas from the Niger delta to a terminal in Beni Saf or El Kala in Algeria. The pipeline could have a capacity of 30 billion cubic metres from 2015. But at a conference to discuss the project in July, Piebalgs pointed out that there was increasing demand for Nigeria’s estimated five trillion cubic metres of reserves to be liquefied and shipped to the US. In addition, regional African projects, such as the West African Gas Pipeline project involving Togo, Benin, Ghana and Nigeria, and a project to supply Equatorial Guinea, are also competing for gas supplies. But Piebalgs has cast doubt on whether the pipeline would have sufficient supplies to go ahead. He singled out issues such as capital expenditure and investment costs and operating expenses as questions which needed to be "very carefully assessed".

Piebalgs’s concern illustrates the limits of political ambitions for inter-continental integration of energy markets and networks such as that contained in the EU-Africa energy partnership. In an era of rising energy prices and growing demand, there will be increasing competition for supplies, without which major infrastructure investments will not happen. This would leave the noble ambitions of the EU-Africa energy partners as little more than aspirations.

Improving co-operation on energy issues is one of the main priorities for EU-Africa relations.