Oil Supply: ExxonMobil Urges More US Aid for Africa
By Mike Oduniyi
The Chairman and Chief Executive Officer of Exxon Mobil Corporation, Lee R. Raymond, has called on the United States Government to evolve policies targeted at solving problems facing oil-producing Afican countries.
Raymond in a speech delivered recently in Washington and published by the US oil major, specifically called on the US to focus its attention on trade liberalization, continued support for sensible economic development assistance, and support for programmes that can lead to better governance and infrastructure improvements in the African countries.
The chairman noted that Africa is one of the areas from which much of US future petroleum energy will originate.
Many governments in Africa, according to Raymond, just like in the Middle East, face quite serious problems of governance, development, enormous social needs.
"Yet they are also ill equipped to address those needs because they lack money and expertise and have institutional frameworks that are still maturing," he said.
"In some places, these governments continue to face strong internal dissent and armed opposition. Where we rely upon these countries for a considerable portion of our petroleum supplies, the risks that they face become - albeit on a smaller scale - our risks," he declared.
The United States therefore, needs to continue a commitment to policies that recognize the challenges faced by many important oil and gas producing countries, policies that can play a significant role in addressing such challenges, said the ExxonMobil Chairman.
"I also think it is in the U.S. interest to continue to support international financial institution participation in energy projects in these areas, particularly where host-country governments and key private-sector participants seek it.
"Our experience with the World Bank in Chad and Cameroon has been a key factor in the successful development of our oil and gas project there - a project that offers the promise of being a major contributor of economic benefits to the local population," Raymond said.
ExxonMobil is Nigeria's second biggest crude oil producer, while the US is the chief importer of Nigeria's crude oil.
Raymond said said calls for U.S. energy independence were not a real option for now, adding that it must recognise that the rest of the world will also be petroleum importers - China, Japan, India, nearly all of Southeast Asia, all of Europe except Norway, and much of Latin America.
"These countries are competing with us for access to the world's supply pool. The US has no guaranteed or preferential supply rights. Similarly, we do not have the resource base to be energy independent. Even if we are prepared to develop more petroleum supplies here, we will still be far, far short of our needs.
"And in doing so, we simply cannot avoid significant reliance on oil and gas from the Middle East because the world's supply pool is highly dependent upon the Middle East. Of course, there are other regions that will be increasingly important as suppliers of petroleum. Sub-Saharan Africa will be one of these, as will Russia and the Caspian. Very heavy oil from Venezuela is also an important source.
Raymond said further that based on a realistic energy outlook, the US government develop further energy resources to be found in the United States. This he added, includes those that may be offshore California and Florida, in the Rocky Mountains and in northern Alaska.
"If we do not, as a nation, explore and develop energy from prospective areas in the U.S., and remain committed to use energy more efficiently, the consequence will be even greater dependence on energy from areas such as the Middle East. There is no realistic alternative, at least for the foreseeable future.
"Developing resources in any part of the world is meaningless if we cannot get these supplies to markets. You are all aware that natural gas prices have risen significantly, as regional supply is shrinking and demand is growing. Particular emphasis is needed today to ensure that liquefied natural gas, commonly called LNG, can be used to meet growing natural gas demands," he said.
The Exxon Chairman said projected overall global energy use growing by about 40 percent by 2020, as demand rises from about 215 million oil equivalent barrels per day (bpd) to almost 300 million oil equivalent bpd.
"That 300 million barrels daily total is a huge amount of energy. It is nearly 13 billion gallons per day. The scale of the world's energy system is truly enormous. that the energy investments required to meet the world's growing demands will be huge.
The International Energy Agency (IEA) he said, estimated that an average of $200 billion, or its equivalent in inflated dollars, would need to be invested each year to develop and supply the oil and gas that the world will need out to 2030. "The investments required for power generation are even larger."
"200 billion dollars annually is a lot of money, and the industry will need to compete with a host of alternatives available to investors for those funds. And it is investors that will be the primary determinants of whether the opportunities are attractive. At the same time, governments have much to do with creating the essential conditions necessary for favorable decisions by investors."
On future the energy outlook, Raymond said in the decades ahead, carbon dioxide emissions from greater fossil fuel use will climb. "We simply do not yet have the economical solutions or technologies that would permit us to meet future energy demands without carbon emissions growth.
"In my view, the most sensible and most fundamental avenue to meet rising energy needs throughout the world as well as to address greenhouse gas emissions concerns is through a long-term effort in energy research and development. Much if not most of this will be privately sponsored research."
The research he added, must addressed fundamental objectives including the following:
_It must improve our ability to discover and produce the increasing amounts of oil and gas the world will need.
_It must enhance our capabilities to reduce the environmental effects of fossil fuel use.
_It must lead to the development of new ways to generate energy for the long-term.
_Finally, the long-term research has to be attentive to real costs and to the practical ability of the developing world to use the new technology.
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