1. 17 April 2009 Ricardo Silva African petroleum resources: The Chinese challenge and what to do about it

2. Historical evolution  27 August 1859 – Drake’s well Titusville, Pennsylvania 69 feet 25 bpd  World population 1850: 1,262,000,000 oAfrica:111,000,000 oAsia:809,000,000 oEurope:276,000,000 oNorth America:26,000,000

3. Historical evolution World population (millions)

4. Historical evolution Life expectancy

5. Historical evolution  Contribution from oil & gas Energy: oMachinery: consumables, food production; oHeating, cooling, lighting; Raw materials for production of: oPlastic; oFertilizers; oPesticides; oSynthetic fibers; oEtc.

6. Post-War years  Growth in the importance of oil: Reconstruction; Modernization; Expansion of automobile use; Luxuries; Etc.  Developing nations: China, India, Brazil...

7. Post-War years  Statistics: 1000 barrels / second; Consumption is 3 times higher than discovery; Peak in discoveries = 1960; Production peak?  Most populous nations:

8. Post-War years  World energy use

9. Why Africa?  USA 2007: 21% of US petroleum imports; January 2009: 54,242,000 barrels of oil; LNG Projects.  World 12% of World oil supply; 10 million bpd; Potentially 30% share; Gulf of Guinea producing more than Saudi Arabia in 10-years’ time? 8% of World gas reserves; Algeria supplies 25% of European consumption;

10. Why Africa?

11.  Oil and gas nations Algeria; Egypt; Libya; Chad; Sudan; Nigeria; Cameroon; Equatorial Guinea; Gabon; Ghana; Angola;...

12. Why Africa?  Africa’s advantages Open acreage; Increased security of offshore oilfields; Lower level of resource nationalism; Relative stability; Lower transport costs and risk of disruption; High quality oil; Huge unexplored resource deposits;...

13. Who’s who of African oil  First comers Gulf Oil Shell BP TotalFinaElf Exxon Mobil Marathon Petroleum...

14. Who’s who of African oil  New comers Petrobras CNPC Gazprom Sinopec Tullow Oil Petronas ONGC Videsh RocOil StatoilHydro Woodside Petroleum...

15. US presence  What the US offers: Around 1/3 of: oThe USD 20 billion invested in African E&P since 1990; oThe USD 50 billion estimated to be invested until 2010. AFRICOM; Western-style democracy and institutions; Disease control programs;...

16. US presence  What the US expects: Oil… o25% of US imports Commitment to Western ideals and principles; FCPA compliance; Liberalized access to reserves;...

17. Chinese connection  What China offers: Low interest loans and debt relief; High bonuses; Technology; Commitment to infrastructure (railroads, roads, refineries, pipelines, etc.); China-Africa Cooperation Forum; USD 32 billion in trade, growing at an annual rate of 50% since 2002; Health assistance; Cheap commodities; Joint ventures; Military assistance (peacekeeping);...

18. Chinese connection  What China expects: Hydrocarbons (16% from Angola in February 2009); Increased political influence; Export market for Chinese goods and equipment; Export market for Chinese labor;...

19. Chinese connection  How strong is China’s influence? Low production by Chinese NOC; Low interest of most acreage held by Chinese companies; Low return on high “government investment”; Lower level of high-tech E&P knowledge; Infrastructure quality issues; Human resources problem;...

20. How to deal with China  Increase political, economic and military involvement;  Promotion of energy cooperation;  Greater contribution to “local content”;  Increase added value;  Increase technology transfer;  Cultural awareness;  Cross-sector approach;  Western-Chinese dialogue to improve African institutions; ...

21. Thank You Ricardo Silva Ricardo.Silva@Mirandalawfirm.com