Picking on 60 Minutes
19 July 2004
60 Minutes last night led with a rebroadcast of a 2003 story on Equatorial Guinea—The Kuwait of Africa? Part of the emphasis of the story was on the country’s “vast reserves” and the potential as a future strategic source of petroleum for the US, part on the corruption of the local government and the corresponding behavior of the international oil companies—specifically ExxonMobil— in exploiting the country.
Nice juicy story. Too bad some of the facts were wrong and as a result, misleading in the overall context of energy stability, ultimately performing a bit of a disservice.
The “Kuwait of Africa” tag comes from the country having so few people and so much oil. However, in 1998, the BBC ran a special report on the French in Africa in which they called Gabon the “Kuwait of Africa”. Swap out the Americans for the French, and the basic story line is pretty similar.
But let’s look at some actual numbers (and I’ll include both African Kuwaits). (Reserves and production numbers from the BP 2004 Statistical Review of Energy and the US EIA.)
First, a baseline. For 2003, Kuwait had listed reserves of 96.5 Billion barrels; Gabon, 2.4 Billion; Equatorial Guinea, 1.1 Billion. (The BBC was closer to the mark, based on these numbers.)
In their piece, 60 Minutes states that Equatorial Guinea has the third-largest reserves in Africa. Hmm. Here is the list of current African reserves from the BP Statistical Review:
Equatorial Guinea didn’t even make the list aside from being included in Other; probably because until only recently, it was thought to have much less—more on the order of 12 million barrels. If we take the US EIA’s revised estimate of a 1.1 Billion reserve for Equatorial Guinea, and rank it with the others, it certainly isn’t third. Wonder from where they got that statistic.
This isn’t to pick on Equatorial Guinea, and if they can actually figure out how to use the oil income responsibly for developing their impoverished country, that would be outstanding.
But when a major news organizations refers to a “Kuwait of Africa”—doesn’t that trigger an association that is equivalent, rather than relative? In other words, don’t you immediately think of another country with the same amount of oil as Kuwait? In fact, Equatorial Guinea reportedly has 1% of the oil reserves of Kuwait.
So what? So if consumers believe there are multiple Kuwaits, entire new Middle Easts to be tapped, then efficiency, conservation and energy planning drop to the bottom of the priority list. “What’s the problem? Party on, dudes!”
Africa, and particularly West Africa and the Gulf of Guinea area (of which Equatorial Guinea is part), are becoming more critical oil and gas sources for obvious reasons, with the accompanying geopolitical implications. It’s also can be a very difficult area, with a dangerous imbalance between oil revenue and the good of the populace. It is not a replacement for the Middle East either in terms of quantity of oil, or stability of society.
In other words—offshore oil discoveries in Africa don’t get us off the energy hook. We need to work hard for efficiencies in use of fossil fuels, and in transitioning to the next energy economy as rapidly as discovery and development allow.
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