An Angolan worker watches over a floating oil platform Photo: Getty Images
By Thalia Griffiths | Published: 05 March, 2012
Another major NOC player is Algeria’s Sonatrach, which has a power base rivalling that of the energy ministry and produces well over 90 percent of Algeria’s export revenue. Like Sonangol, it is a major driver of national development and one of the strongest institutions of the state.
Sonatrach has a reputation as a centre of excellence within Algeria, and its employees are sought after by other companies. Traditionally many Sonatrach-trained Algerians sought lucrative careers in the Gulf, and in recent years the government has had to step in to stop international oil companies operating in Algeria from poaching Sonatrach staff. The company also has international ambitions, with exploration acreage in Mali, Egypt and Libya, as well as stakes in downstream bottled gas and fuel supply in Mauritania.
By contrast, Nigeria’s state oil company is mired in corruption and inefficiency. Repeated attempts to reform it have met with only partial success, and the latest effort to tackle the sector’s woes, the Petroleum Industry Bill, is now in its fourth year of debate. Despite being the conduit for flows of oil money to the government, Nigerian National Petroleum Corporation still suffers from major financial troubles, to the point where former junior finance minister Remi Babalola
described it as “technically insolvent”. NNPC is notorious for hemorrhaging government funds and failing to pay its dues to central government. One recent estimate put its backlog of unremitted crude oil receipts at $2.9bn. Top posts are political appointments and management turnover is high.
But NNPC’s failings have not hampered the growth of Nigeria’s indigenous energy industry. In the absence of a state-owned standard-bearer, a handful of privately owned players are spreading their wings outside the country. Oando Petroleum’s shares are listed in Johannesburg as well as Lagos and the company is active in products supply, trading, gas and power, and exploration.
Oranto and Atlas Petroleum, owned by Prince Arthur Eze, have a portfolio of exploration acreage including Sierra Leone, Liberia, Mali, Equatorial Guinea and Côte d’Ivoire. Much of the acreage has been in the companies’ hands for some time, but its attractiveness has been heightened by recent offshore discoveries in Ghana and Sierra Leone by Tullow Oil, Kosmos Energy and Anadarko Petroleum, putting Oranto in a strong position to attract partners with the necessary skills and funds to advance the exploration process.
Big changes are expected in Libya, whose National Oil Corporation (NOC) was in need of thorough reform even before the radical changes brought about by the uprising against late leader Muammar Gaddafi. NOC’s immediate priorities are to repair damaged facilities and to reassure foreign partners, but it also hopes to put an end to a longstanding problem of underinvestment.
Under Gaddafi, NOC had no autonomous budget. All oil income went directly to the treasury, which met only a fraction of funding requests by NOC or its subsidiaries, leaving them unable to pay their share of joint venture development plans.
The Benghazi-based NOC subsidiary Arabian Gulf Oil Company became accustomed to a high level of autonomy when it operated as the de facto national oil company for the National Transitional Council, but longstanding mistrust of eastern Libya by Tripoli means greater freedom is a politically charged issue.