Anadarko Petroleum Corporation (APC), Petrobras Argentina SA ADR (PZE): Offshore Africa – The Next Oil and Gas Hotspot?

For instance, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) reported a reserve replacement ratio of just 85% last year, while Total SA (ADR) (NYSE:TOT)‘s came in at 93%. A ratio that is consistently under 100% generally indicates trouble further down the line. As the majors continue to struggle to boost their oil and gas production, future growth will increasingly come from unconventional sources, such as offshore Africa and Brazil, U.S. shale, and Canada’s oil sands.

According to the consultancy Wood Mackenzie, sub-Saharan African nations could be pumping out an additional 400,000 barrels of oil per day by 2018. That would bring the sub-Saharan region’s total crude oil output to 6.6 million barrels per day, equivalent to daily field production of crude oil in the U.S. last year.

In my view, it will be most interesting to see whether or not the wealth generated from sub-Saharan Africa’s oil and gas production will translate into higher standards of living for its citizens, or whether the region will fall prey to the infamous “resource curse”, where wealth is accumulated by just a handful of already wealthy politicians, their circle of privileged friends, and the companies they hand out contracts to. Unfortunately, the latter looks more likely to be the case.

The article Offshore Africa: The Next Oil and Gas Hotspot? originally appeared on Fool.com and is written by Arjun Sreekumar.

Motley Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Chevron, Petroleo Brasileiro (NYSE:PBR) S.A. (ADR), and Total SA. (ADR).

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