Italy just started its new era in Africa.
Italian fascist troops were vanquished in the Sahara during WWII, and Rome's control of swathes of the continent ended as Mussolini was lynched in Milan.
Now, more than 60 years later, Italy's national energy giant Eni (NYSE:E) is ushering in an era of Italian involvement in oil production in Africa...with $3 billion invested into Congolese oil sands.
Oil Production in African: The Third Period of the Oil Game
The world's love affair with oil has run in a few distinct phases:
- Find it (bubblin' crude)
- Use it up (gas guzzlers and suburbs)
- Scramble to find more (oil sand and shale)
Western oil companies have put billions into Canadian oil sands.
Those unconventional reserves made no sense to exploit just a few years back, but once oil broke $40, then $50, then $60 a barrel, billions of bucks came flowing in.
Now we're upwards of $130, and non-traditional crude sources get more attractive with each NYMEX futures increase.
Within the past several years we've also seen the likes of ExxonMobil (NYSE:XOM), Chevron (NYSE:CVM), and several national oil companies cozy up to relatively untapped traditional crude sources...
Places like Libya, Angola, and Kazakhstan are drawing the dollars for exploration and major pipeline construction, as Nigeria's oil industry teeters on the brink of chaos and many South American countries turn hostile to foreign management.
However, in the Republic of Congo, Eni's new plan for non-traditional crude recovery includes an all-encompassing community energy approach.
Eni Oil Production in Republic of Congo
The Republic of Congo (also known as Congo-Brazzaville), is smaller than the neighboring Democratic Republic of Congo, which used to be known as Zaire.
But Congo-Brazzaville's oil endowment is sizeable, with the continent's sixth largest production and increasing levels of natural gas output to boot.
Eni expects to recover 150 million barrels of oil equivalent on an investment of 3 billion U.S. dollars over four years.
That money isn't just going to Canadian-style tar sand extraction, though.
The investment period of 2008-2011 also includes Eni's Food Plus Biodiesel program, which will plant palm trees on 70,000 hectares of Congolese land.
Some 10,000 people are expected to be employed by the project, and their work will produce 250,000 tons of biodiesel per year.
That's after the palms provides vegetable oil that can meet all domestic demand.
In terms of household energy, Eni is using natural gas byproducts of oil sand processing to run a power plant that will generate 80% of the country's electricity requirements.
It's the kind of broad view that's necessary today, not only from an energy standpoint but also as part of a sound investment approach... many oil companies have failed to keep locals happy, and they've paid dearly as we're seeing in Nigeria, Ecuador, and elsewhere.
In the Global Growth Stocks portfolio, we're taking the broad view too.
That's why every single international energy stock we hold is up by more than 45%.
We're playing the worldwide growth trend from several angles and several geographical locations, and the winners just keep coming.
Check out Global Growth Stocks today, and make sure you don't miss another winning stock!
Sam Hopkins
www.energyandcapital.com
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