Africa’s Growing Importance in the Global Energy Picture: Exxon Mobil Corporation (XOM), Hess Corp. (HES)

The company is in the process of transforming into a high-impact exploration company. It sees these high-impact discoveries in Ghana as being an important component in the company’s growth strategy. The company is combining lower-risk, unconventional development in the Bakken with its high-impact deepwater exploration actives in the Gulf of Mexico and Ghana to drive future growth.

Not to be outdone, fellow U.S.-based independent Anadarko Petroleum Corporation (NYSE:APC) is also investing heavily in the continent. The company, along with a consortium of partners, has made several discoveries off the coast of Mozambique that could extend to offshore Kenya as well. Contained among the discoveries are massive amounts of natural gas which the company believes holds 10 trillion-30 trillion cubic feet of recoverable gas, or more. Because of these discoveries, the company along with Eni (which has adjacent discoveries) is planning to construct an onshore liquefaction facility to produce liquefied natural gas in Mozambique for the export market.

These key projects ensure that Africa is destined to become increasingly important to the global energy picture over the coming years. These discoveries, and more that will likely be announced, are just a small sampling of the vast resources that lie underneath the continent, which will likely put an even greater spotlight on the region’s largely unstable political climate.

Companies operating in the area will likely be under tighter scrutiny, even as discoveries drive higher returns. Investors need to watch carefully that companies that they are invested in are first and foremost ensuring the security of their employees. It also goes without saying that ethics and environmental protection also must be kept to the highest of standards. If companies adhere to these important principles, then Africa will be a driving force for oil returns over the coming decades.

The article Africa’s Growing Importance in the Global Energy Picture originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Statoil (ADR).

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