Angola Leapfrogs Nigeria As Africa's Largest Oil Producer Paul Maidment, 05.15.08, 6:17 PM ET
Angola overtook Nigeria as Africa's largest oil producer in April. The switch is a result of continued insecurity in the Niger Delta, where militant groups are waging a long-running violent campaign to press for greater local control over oil revenues.
In April, Angola reached a production rate of 1.92 million barrels per day (b/d), slightly below its potential of 1.93 million b/d, according to the Organization of Petroleum Exporting Countries (OPEC). Nigeria produced 1.88 million b/d in April, three-quarters of what OPEC estimates to be Nigeria's production capacity of 2.5 million b/d,
Angola, one of OPEC's newest members, has gradually increased its production with new offshore oilfields, while Nigeria has been plagued by persistent supply disruptions.
A strike by ExxonMobil (nyse: XOM - news - people ) workers in Nigeria took about 800,000 b/d out of production for several days. But the decline in its output mostly reflects the effect over the past two years of increased militant activity in the Niger Delta, which has taken out a fifth of the productive capacity of what has been Africa's top producer annually since 1978.
Nigeria may retake the top position this month as much of its shut-in production has been restored with Exxon Mobil settling its strike and Royal Dutch Shell (nyse: RDSA - news - people ) repairing two of its Bonny Light field facilities damaged by militant attacks.
There is a question about the long-term commitment of foreign oil companies to the delta unless the unrest is reined in. There is scant sign of new exploration in the region and no new reserves have been discovered there recently.
That is a faint echo of what happened in Angola during its civil war in the 1980s when oil companies pulled back from exploration as a prelude to shutting down production as fighting became more intense.
What little exploration there is now in Nigeria is in deep waters offshore, where Chevron (nyse: CVX - news - people ), ExxonMobil and Total (nyse: TOT - news - people ) all have fields due to come onstream over the next 18 months.
Oil producers in Nigeria also face regulatory, legal and financial challenges. The government, which like Russia's and Venezuela's wants a bigger slice of the profits from $100-plus a barrel oil, is attempting to overhaul the industry and turn the state oil company Napcon into a clone of Brazil's Petrobras or Norway's StatoilHydro.
While the government is unlikely to abandon its foreign-investor-friendly approach to energy regulation, the large international oil companies will find their high profit margins under scrutiny, while their ability to pump oil in the delta remains repeatedly interrupted by those taking matters directly into their own hands.
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