Washington estimates the Gulf of Guinea will supply about a quarter of U.S. oil by 2015 and has sent military trainers to the region to help local navies secure shipping.
That quote up top is all you really need to know, when looking at how serious of a problem piracy could be for the world and for the US in the Gulf of Guinea. For that reason, I will start to focus more on that region, just because I have a hunch that we will see an increase in piracy there.
The thing is that these guys are learning from other successful models of piracy operation, and soon they too will achieve the same kind of success as the Somali pirates. Hell, I could imagine some Somali’s attempting to make an entry into that hunting territory. Although I am sure they will be edged out by equally aggressive criminals and investors. –Matt
Edit: I just came across this latest post by Tracking Energy Attacks. This is a great website and they are using Ushahidi to map all of these energy related attacks around the world. The author also expressed concern about this region, and here is a clip from the post:
I’m a little more interested in the developments in the Gulf of Guinea where based on my count there have been 24 reported successful attacks with the bulk of them coming off of the coast of Benin. Less than 10 attempted but unsuccessful attacks were reported. Piracy is also apparently a growing concern for Southern Africa with numerous attempted attacks occuring off the coast of Tanzania and north of Madagascar. Such trends have global energy supply implications given that “six million tons of oil are transported around South Africa’s western coastline every month” as well as regional energy production implications.
Italian tanker Anema e Core seized by pirates off Benin
24 July 2011
Pirates have hijacked an Italian diesel tanker off Benin in western Africa in an attack of the kind more usually associated with Somalia.
Assailants boarded the RBD Anema e Core early on Sunday in the Gulf of Guinea, officials in Benin and Italy confirmed.
Two of the 23 crew are Italians, the others Filipinos and a Romanian.
Benin’s navy said it was following the hijacked ship while Italy’s foreign ministry liaised with its owner in Naples.
Three pirates managed to board the ship 23 nautical miles (43km) south of Cotonou, the economic capital of Benin, Italian media said.
“Everything is being done to trace the pirates as quickly as possible,” Maxime Ahoyo, commander of Benin’s navy, told reporters in Cotonou.
The Gulf of Guinea has become increasingly important for its potential energy reserves which have attracted international interests, BBC West Africa correspondent Thomas Fessy reports from Dakar.
The US, for example, hopes to import about a quarter of its oil supplies from the region by 2015.
West African coast guards have been receiving US training to combat growing maritime insecurity.
Most recent attacks on shipping around Africa have been off its east coast, where Somali pirates have ranged deep into the Indian Ocean, but the danger in the west was already identified several years ago.
Story here.
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FACTBOX-Key political risks in the Gulf of Guinea
Tue Jul 5, 2011
By Richard Valdmanis
A stretch of West Africa’s coast spanning more than a dozen countries, the Gulf of Guinea is a growing source of oil, cocoa and metals to world markets.
But rising rates of piracy, drug smuggling, and political uncertainty in an area ravaged by civil wars and coups have made it a challenging destination for investors seeking to benefit from the massive resources.
The Gulf of Guinea runs from Guinea on Africa’s northwestern tip to Angola in the south and includes Nigeria, Ghana, Ivory Coast, Democratic Republic of Congo, and Cameroon.
NEW ENERGY FRONTIER?
Gulf of Guinea nations produce more than 3 million barrels of oil per day — about 4 percent of the global total — mostly for European and American markets, with the bulk coming from OPEC-member Nigeria (2.2 million bpd).
Smaller producers include Equatorial Guinea (300,000 bpd), Congo Republic (340,000 bpd), Gabon (230,000 bpd), Cameroon (55,000 bpd) and Ivory Coast (40,000 bpd).
While many of the region’s producers are struggling to maintain output, oil companies believe the deep seas along the coast west of Nigeria could be a new frontier.
Ghana joined the ranks of West African oil producers in December 2010 and is expected to ramp up output to 120,000 bpd by July and reach 250,000 bpd after three years . Further out, Sierra Leone and Liberia hope offshore drilling will spell oil riches for them as well.
Washington estimates the Gulf of Guinea will supply about a quarter of U.S. oil by 2015 and has sent military trainers to the region to help local navies secure shipping.
What to watch:
— Oil leases: Gabon decided to invite direct bids for investments in remaining oil blocks rather than auction them and is preparing new legislation for the sector . Rocky labour relations in the country are a risk, with the main oil union striking in early April and slashing operations . French oil major Total revived its exploration efforts in the country by purchasing stakes in three onshore licenses
— Exploration efforts: The results of exploration efforts by Tullow and Anadarko off Ghana, Sierra Leone, and Liberia, Bowleven and Victoria Oil and Gas in Cameroon could go a long way to defining the energy potential of the region.
Anadarko announced in March it found more high-quality oil off Ghana from its Teak-2 exploration well, the latest in a string of discoveries in the area . Hess Corp said in April its exploration drill on its Paradise prospect encountered 370 feet of hydrocarbon, an early positive sign as it seeks commercial quantities .
Bowleven said early in June that its Sapele-1 well off the coast of Cameroon flowed oil at rates which it believes indicate a commercial development is possible, while Victoria Oil & Gas (VOG) said the first gas sale from its flagship project in Cameroon was on schedule for the fourth quarter.
— Security: The security of operations and shipping is a key risk, with piracy on the rise in the area. The security of operating contracts may also cause concern after Ghana’s government said last year Exxon Mobil’s reported deal to buy Kosmos’ stake in the Jubilee field was illegal. Kosmos reported in August 2010 the deal was scrapped.COCOA HUB
Two-thirds of the world’s cocoa comes from Gulf of Guinea nations, most of that from No.1 global producer Ivory Coast, and the rest from Ghana, Nigeria, Cameroon and others.
Cocoa output from the four producers during the 2009-10 season hit a three-year low below 2.4 million tonnes, but may rebound well over 2.5 million tonnes this season due to big increases in Ghana and Ivory Coast.
What to watch:
— Ivorian efforts to ramp up exports. Ivory Coast restarted port operations in late April after the end of a violent four-month power struggle. The country has since outpaced expectations and said it had shipped over half of the about 450,000 tonnes of cocoa that had backed up at the ports during the crisis. Ivory Coast’s acting agriculture minister said in May he expects full-season output to meet pre-crisis forecasts of 1.3 million tonnes .
— Ghana’s bumper harvest. No. 2 world cocoa grower Ghana is expecting official output to rebound this season to near 1 million tonnes, after it fell below 650,000 tonnes last season . Ghana officials have said the increase is due to improved husbandry and good weather, while analysts have said much of the year-on-year increase is due to a reversal of smuggling flows with Ivory Coast
Ghana’s Cocobod authorities plan to raise $2 billion for the next cocoa season, which would be used to boost crop output.
— Longer-term trend. Ivory Coast’s political crisis has called into question the longer-term security of supply from the world’s top producer. The government has said it is keen to revamp the sector that is suffering from years of neglect since the 2002-03 civil war, but years of turmoil have blocked reform efforts, leading to output declines.
IRON ORE AND OTHER MINERALS
Gulf of Guinea nations — already home to top bauxite exporter Guinea and major gold producer Ghana — have attracted billions of dollars of investments from resource firms eager to dig up its vast unexploited resources of iron ore.
The region could eventually produce nearly 10 percent of the world’s iron ore, up from under 1 percent last year, according to the U.S. Geological Survey.
Investments announced last year from BHP Billiton , Rio Tinto , Vale and Chinalco amount to around $10 billion.
What to watch:
— Mining companies are well aware of the risks common to West Africa, contract security being one of the chief worries.
— Iron-rich Guinea’s successful elections in November ended two years of military rule and could be a green light for investors to re-engage. However, the country plans to pass a new mining code within the next few months that would boost state ownership in the sector and toughen the rules for obtaining concessions — changes that industry players said could discourage future investment.
— Other risks in the region include tight power generation capacity — something which has interfered with mining investment in other countries such as South Africa and Chile.
Most notably, Cameroon is hoping to triple power generation by 2020 after shortages forced Rio Tinto’s joint-venture Alucam smelter to cut back operations in 2009.
Cameroon issued a treasury bond in December that it said was oversubscribed and plans to issue another by year-end. Proceeds from the bonds are meant to go towards hydropower and other infrastructure projects.PIRATES AND DRUG RUNNERS
Piracy in the Gulf of Guinea is not on the scale of that off Somalia, but analysts say an increase in scope and number of attacks in a region ill-equipped to counter the threat could affect shipping and investment.
Attacks by gunmen on ships off Cameroon’s major port of Douala have showed pirates are extending their range beyond the restive Cameroon-Nigeria maritime frontier, where Niger Delta rebels operate.
Cameroon blamed piracy for part of a 13 percent drop in oil output in 2009 to 73,000 bpd. Production has since fallen to 55,000 bpd and is expected to dip further. Nigeria suffered years of curtailed output due to rebel attacks.
West African drug trafficking is also having an impact on the region’s economies. The United Nations estimates that $1 billion worth of cocaine, destined for Europe from Latin America, passed through West Africa in 2008.
What to watch:
— Shipping, oil production, and investment trends will tell the tale of the economic impact of piracy. Cameroon is expected to hold an offshore lease sale in 2011 that might be a good gauge of the perceived risks of piracy to the sector.
— Analysts say the drugs trade is leading to a spike in regional money laundering, crime and corruption
Story here.