- The industry
- Benefits and pitfalls
- Puma Energy which acquired BP service stations in several African member states
- Vitogaz, S.A which acquired Texaco (Chevron) service stations in nine Commonwealth Caribbean member states
- KenolKobil, a Kenyan-based oil marketer expanding into the rest of Africa
- Pacific Petroleum Company, which took over BP’s and Shell’s concerns in the South Pacific
- London-based Tullow Oil which has expanded to a number of Commonwealth countries
- Chinese company Sinopec with its stake in Canada’s tar sands
- Ghanaian outfit EO Group which has a stake in the country’s oil.
The oil and gas industry in the Commonwealth
The Commonwealth has an estimated 232 billion barrels of oil reserves, about 17% of the world’s total. Reserves from 17 member countries contribute to this total. Canada has the most reserves, the bulk of which are made up of oil sands. Nigeria has the second largest reserves and the largest in Sub-Saharan Africa*.
The bulk of Canada’s reserves are made up of oil sands (or tar sands) an ‘unconventional’ oil reserve – a mixture of sand and bitumen (a thick, heavy form of petroleum). Oil sands projects are quite controversial due to, apparently, the extremely high levels of carbon emissions they generate.
The upstream subsector, which entails the exploration and production of oil and gas, is dominated by the private sector in the developed part of the Commonwealth. In developing and emerging economy member states, joint collaborations between the state and transnational oil companies are more commonplace. Global oil company Shell has been working in partnership with the Government of Brunei for many years through equal ownership of Brunei Shell Petroleum. Similar partnerships are seen in Ghana and Nigeria.
For a long time oil and gas enterprises BP, Chevron and Shell dominated downstream services, essentially the retail and marketing of petroleum products, throughout the Commonwealth. They have since divested and have sold most of their holdings in Africa, the Caribbean and the South Pacific. Extensive holdings though continue to exist in South Africa, Malaysia, Australia and the UK.
With the divestment of retail assets by major corporations and the discoveries of new oil in countries such as Namibia, Canada, Ghana and Uganda, the past decade has seen the emergence of relatively new local and international players in the Commonwealth such as:
*Estimates of proven oil reserves are controversial and should be treated with caution; a variety of events affect future oil supplies.
Benefits and pitfalls
A successful oil and gas industry can reap many economic and social benefits for a country. Having achieved sustained and rapid economic growth in the 1990s and the 2000s Trinidad and Tobago in the Caribbean is now among the wealthiest nations in the Commonwealth. Due to its abundant oil and gas reserves and smaller population Brunei is among the world’s richer countries and, partly because of the revenues it earns from the industry, the government does not charge its citizens income and capital gains taxes.
Yet the abundance and dependency on oil can come at a price. Oil spills are common and widely known. The extraction and production of petroleum-based products has adverse effects on the environment. Competition for resources has also led to human conflict. Oil and gas economies such as Brunei, Trinidad and Tobago and Nigeria are vulnerable to fluctuations in international prices and the demand of oil and gas. Oil often accounts for a significant proportion of their export earnings and government revenue.