The global demand for crude oil has risen dramatically in recent times, driven by sustained economic growth in industrialized economies, rapid industrialization in parts of the developing world, as well as continued political instability, particularly in the Middle East. This trend has sent shock waves into the global oil markets, triggering on upsurge in the market prices of the commodity, which has risen to its highest peak in the past couple of decades. The increase in the demand for crude oil has emerged against the backdrop of shifting global patterns of demand and supply, a development that presents policymakers with challenges and opportunities. Although the Middle East continues to dominate global oil production, policymakers in industrialized economies are intensifying efforts to diversify their sources of supply away from the crisis-prone region. Consequently, Africa has emerged as a region with growing reserve potentials to become an alternative source of crude oil supply, particularly in the Atlantic Basin. The discovery of huge crude oil reserves in a few African countries in recent times has enhanced the profile of the region as a potentially dominant source of supply to feed the rising global demand. Africa's oil reserves are concentrated north of the equator, with Angola as the major exception. Libya possesses the largest recoverable reserves in the continent, followed by Nigeria and Algeria. New oil reserves have also been discovered in Mauritania, Chad and Sudan, with steady increases in these countries projected into the future. In the Gulf of Guinea, where Nigeria is the dominant producer of crude oil, huge reserves have been discovered offshore, increasing the prospects of accelerated production in Angola, Equatorial Guinea and Gabon.
Global crude oil reserves are important measures of energy security and sustainability, which hold the key to global economic growth, increased industrialization and prosperity. In the course of the 20th century, global crude oil reserves increased steadily, spurred by the dominance of oil as the world's favored choice of primary energy source. Until the 1970s, the world's crude oil reserve increased steadily, aided by advances in seismic technology and novel exploration techniques. For many years, global oil reserves showed small but steady increases, a development that confirmed the discovery of new reserves, which kept pace with production (UNDP, 2000). However, industry analysts agree that relatively new oil fields have been discovered since the mid-1970s, and that most reserve increases have emerged from revisions of previously underestimated existing reserves, and improved recovery techniques.
Global trends also revealed that peak production lags behind peak discovery by several decades. They also showed that larger and more obvious fields were found first, leading to an early peak in discovery and diminishing returns in exploration; the more that was fond, the less was left to find. Production therefore followed in fields that were smaller and harder to find and to exploit, leading eventually to the exhaustion of the fixed stock. Table 1 shows the state of global oil reserves and depletion trends.
