Africa 'cannot support demand'

22/10/2008

The prospect of sourcing cheap and abundant oil from African reserves is growing dimmer, energy experts have warned.

With recent sustained demand growth in emerging economies such as China, India and Brazil, global oil prices increased considerably in the early part of this year, creating new interest in exploration of new oil reserves and extraction techniques.

However, Fatih Birol, chief economist for the International Energy Agency, told the Wall Street Journal that the recent economic meltdown and internal problems have dampened the possibility of Africa supporting this invigorated demand.

"We have benefited from additional oil volumes from Africa, but given the production profile of offshore fields, we need to see significant new discoveries to sustain that trend," she said.

So too, the falling price of oil brought on by the current downturn has made extraction less profitable and new exploration less viable, the paper added.

Last week, oil prices fell to a 15-month low, something which may well soon impact upon spot prices for kerosene, diesel and gas oil.