Issues

Africa and the Middle East Area Minerals Production Global Demand and Combination

• Print
• Email

Details

Category: Issue No. 95

Published: Friday, 22 June 2018 11:42

Written by Super User

Hits: 5721

Dr. James A. Harris, Sr.*

Africa and the Middle East Area Minerals Production,
Global Demand, and Combination

****************

Transcontinental Africa, including its territories and adjacent islands, possesses enormous wealth and huge natural resources, ranking Africa at the top among nations in terms of the amount of world reserves of bauxite, chromite, cobalt, diamond, gold, manganese, phosphate rock, platinum-group metals (PGM), titanium minerals (rutile and ilmenite), vanadium, vermiculite, zirconium and petroleum. Africa covers a land area of 30.3 million square kilometers representing a land area that is more than three times the size of the United States.

The Middle East Area encompasses a land area of 9.7 million square kilometers compared with 9.2 million square kilometers for the United States. Huge crude petroleum and vast natural gas exploration and production, and processing represent the most significant sectors of the wealth and natural resources economies of the Middle East nations.

The realities reported by the International Monetary Fund World Economic Outlook Spillovers and Cycles in the Global Economy (Table-A) make it apparent that the huge amount of wealth and vast quantities of natural resources in Africa and the Middle East Area, as well as the productive activities, have failed to narrow the wide gap that exists between the increasing magnitude of the Advanced Economies Shares in Aggregate Gross Domestic Product (GDP), Exports of Goods and Services and the smaller size in this Aggregate allocated for Africa and the Middle East Area.

In the Advanced Economies Classification by the IMF World Economic Outlook Group, the United States Gross Domestic Product (GDP) is 37 percent of the total for the group, followed by the Euro Area with 28.2 percent of the total for the group; Japan held 12.1 percent of the total for the group; the United Kingdom was 6.2 percent for the group; and Canada was 3.4 percent of the total for the group as presented in the IMF Table A. Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 2006 (1).

The Gross Domestic Product (GDP) wide gap between countries, in effect, should not exist. In this respect the Other Emerging Market and Developing Countries Classification by the IMF World Economic Outlook Group the result for Africa GDP is 7.0 percent of the total for group; Sub-Sahara is 5.4 percent of total for group; and the Middle East is 5.9 percent of total for group, thereby detailing the wide disparity Economic gap in the nations Gross Domestic Product, 2006 (2)

The Africa and the Middle East Ares did not produce at a required maximum output performance level as was noted in a study conducted by the United States Geological Survey (USGS). In the study by the USGS, which presents some results from the international mineral exploration activities from 1995 through 2004, the indications are that the leading regions for gold exploration, 1995-2004, were (a) Latin America, (b) Canada and (c) the United States. This same ranking order was maintained for copper exploration activity by region, 1995-2004; Latin America, Canada and the United States (3). The U.S. Geological Survey (USGS) study shows that the diamond exploration activity in Africa remained relatively at a constant level between the 1995-2004 period (4). Latin America, in 2004, led all regions in the classification of the region with the largest amount of exploration activity (5). Heightened interest in exploration activity by Africa was in the joint gold and diamond exploration, which represented a level of over 70 percent of the African total exploration.

In comparison with these developments the platinum-group metals (PGM) exploration sites gained momentum and reached the level of 40 exploration sites in 2004, a sharp increase from 3 exploration sites in 1995 (6).

The Africa and the Middle East Area, although endowed with enormous wealth and vast natural resources, have not produced multinational conglomerate enterprises or global corporations that rank among the top ten of the Fortune Global 500 World’s Largest Corporations. The prevailing global strategy of the Fortune Global 500 World’s Largest Corporations, namely the industrial and economic growth engine of the global economy, encompasses the optimum utilization and allocation of natural resources ands raw materials including 5 multinational enterprise oil companies concentration within the top 10 of the Fortune Global 500 (7).

The Africa and the Middle East Area Minerals needed global competitive advantage strategy demands have sought and pursued their own development of some multinational enterprises operations anticipating the engagement in international trade and investment inclusion in the exclusive Global 500 World’s Largest Corporations.

Globalization, which is accompanied by components of global networks-of-networks, produces its own concerted action, combination and collective control in the determination of economic policy and international trade and investment while being inseparable, in some instances, from receiving direct government sponsorship.

The most significant and distinguishing feature of this assessment by the author is that combination dominated and determined the origination, consolidation, mergers, and management which have resulted in the global institutions and enterprises of the Fortune Global 500 World’s Largest Corporations and, most notably, the Fortune 500 America’s Largest Corporations; the author’s assessment relates directly to the dynamics driving the current combination, and its historical (8) worldwide marketing arrangements in contrast with the wide dispersion of the Africa and the Middle East Area independent companies; it is an evaluation of the determination of the formation, methods and types of combination instruments of dominance; it is an appraisal by the author of the rapidly increasing demand for the urgent ascendancy of the pervasive combination in the Africa and the Middle East Area implementation of the processes of concentration similar to the Fortune Global 500 World’s Largest Corporations.

COMBINATION

Combination is the manifestation of concerted action, concentration of capital or securing concentration of control and management of great consolidations of horizontal integration, vertical integration, and circulate integration enterprises.
The processes of concentration of large and diversified industries are sources of the formation of combination. There are several types of combination and the following selection presents some insights on the utilization of combination.

The Holding Company

The holding company originated and was developed after the U. S. Civil War by the House of Morgan through the creation, formation, operation and management of the Standard Oil Company of New Jersey, which is currently Exxon Corporation. The Holding company, by definition, is any enterprise, which is incorporated or unincorporated, that has the ability to control, or exercise power over, the organization and management of a single or several other companies through, in part at least, its ownership of voting stock and securities or other several companies (9).

Gramm-Leach-Bliley Act (U.S. Financial Modernization Act)

The prevalence and pervasiveness of the holding company have gained in importance and have succeeded in being part of the official United States government policy and administration particularly when the Gramm-Leach-Bliley Act was enacted by the U. S. congress and became Public Law 106-102 with President Clinton’s signature on November 12, 1999.
In effect Title 1 Facilitating Affiliation Among Banks, Securities Firms, and Insurance Companies ensures the legitimacy and makes operational the worldwide effects of the Holding company (10).
The Gramm-Leach-Bliley Act, and its advocacy of financial modernization, creates a New “financial holding company” under section 4 of the Bank Holding Company Act. Such new “financial holding company” can operate in a statutorily provided list of financial activities, among which are included insurance and securities underwriting and agency activities; merchant banking; and insurance company portfolio investment activities. The classification of activities as “complementary” to financial activities are authorized (11).
The enactment of “facilitating affiliation” when undertaken by the Fortune Global 500 World’s Largest Corporations and the Fortune 500 America’s Largest Corporations, galvanizes the intensity surrounding combination, consolidation, common control, and centralization financing, thereby heightening the production of global competitive advantage outcomes.

The global dimension of the holding company manifests itself, as reported on the ExxonMobil web site, through the creation of China’s first fully integrated refining and petrochemicals and fuel marketing international joint venture with foreign participation. In addition, the Fujian Petrochemical Company Limited (FPCL) is owned 50 percent by the China Petroleum and Chemical Corporation (Sinopec), a state-owned holding company, and 50 percent owned by the Fujian Government.
ExxonMobil China Petroleum and Petrochemical Company Limited (ExxonMobil) is a wholly-owned affiliate of ExxonMobil Corporation, which is a pure holding company, and Saudi Aramco SinoCompany Limited (Saudi Aramco), which is a wholly-owned affiliate of Saudi Aramco.
An inauguration ceremony held at The Great Hall of the People in Beijing marked the Formal government approval of the joint venture contracts and the granting of business licenses for their two international joint ventures in Fujian Province, namely, (1) Fujian Refining & Petrolelum Company Limited and (2) Sinopec SenMei (Fujian) Petrolelum Company Limited.
The joint venture company, formally registered as “Fujian Refining & Petroleum Company Limited (FPCL) (50 percent), ExxonMobil China Petroleum and Petrochemical Company Limited (FPCL) (25 percent), and Saudi Aramco Sino Company Limited (25 percent).
The multiplier effect is optimizing outcomes. Located in Quanzhou, Fujian Province, the Fujian Refining and Ethylene Joint Venture Project will expand the existing refinery from the 80,000 barrels-per-day (4 million tons-per-year) to the expanded 240,000 barrels-per-day (12 million tons-per-day). The upgraded refinery will primarily refine and process Sour Arabian crude, in addition, the Project will construct an 800,000 tons-per-year ethylene steam cracker; an 800,000 tons-per-year polyethylene unit; a 400,000 tons-per-year polypropylene unit; and an aromatic complex to produce 700,000 tons-per-year of paraxylene. The support facilities, including a 300,000 ton crude berth and power cogeneration, will also be built.
The investment demand and supply maximization of the “Facilitating Affiliation Among Banks, Securities Firms, and Insurance Companies” of the Gramm-Leach-Bliley Act also provides the foundation and formation and operation frame of reference for the financial modernization of Africa and the Middle East Area own-initiated combination and holding company.

Cartels

The cartels seek the unrestrained producers who avoid the role of competition market forces that are, in effect, subject to planned collective and concerted control specifically for the benefit of the producers. Some cartels have been created by negotiation through treaties between and by States and regional institutions (12).
Cartels are often described and characterized as international marketing arrangements that recognize the producer members who transact commercial activities or commerce in the same or identical scope or line of business activity while, at the same time, avoiding competition with each other (13).
The issue of cartels in comparison to or in contrast with the “Facilitating Affiliation” enactment in the Gramm-Leach-Bliley Act, which is examined in the preceding section, currently remains without determination or settlement.
From an historical perspective cartels have experienced a persistent and sustained period of market domination in conducting international business diplomacy and detailed through such studies as Cartels in Action; UK Foreign Trade Bureau Cartels 1944-1946; International Petroleum Cartel; and Cartels, Concerns and Trusts (14).
The U. S. Department of Justice is in the forefront of prosecution and leading the energetic and industrious antitrust investigations against unlawful cartels. In May 2003, and in the delivery of his statement before the British Institute of International and Comparative Law, the Acting Assistant Attorney General Antitrust Division, U.S. Department of Justice R. Hewitt Pate addressed the issue of “Antitrust-Cartel Enforcement: The Core Antitrust Mission.” Mr. Pate asserted that cartels are an attack against free market economies and he noted that the antitrust laws represent the most effective brake against the cartelization of industry.
The Organization of the Petroleum Exporting Countries (OPEC) is a cartel par excellence, being the best of a kind, and its members include Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, The United Arab Emirates, Angola, and Venezuela. The OPEC is an intergovernmental organization of producers.
The U. S. Energy Information Administration/International Energy Outlook 22006 reported international energy projections through 2030. The world oil demand projected growth is from 80 million barrels per day in 2003 to an estimated 98 million barrels-per-day in 2015, and by 2030 it is projected to reach 118 million barrels-per-day well above the 2015 level. The China and India anticipated sharp increase in the consumption of oil will account for a projected 43 percent of the total increase in the consumption of world oil (15).
OPEC’s expanding production capacity can meet the sizable increasing and rising demand for production which is demonstrated in Table 3a. OPEC Oil Production The largest market share of OPEC’s oil production is located in those countries that border the Persian Gulf. Iraqi production has not been a part of any OPEC quota agreements since March 1998, according to the Energy Information Administration (EIA) Country Analysis Briefs dated November 26, 2004.
OPEC collects price data on a basket of seven crude oils. In addition to the OPEC Basket, several other crude oil prices are used to follow world oil market conditions. The OPEC “Basket” collection of price data is used for the purpose of monitoring world oil demand and supply conditions. Table 3a OPEC Oil Production.

Community of Interest

The German giant Interessengemeinschaft Farbenindustrie A.G. (literally, Dyestuffs Industry Community of Interest, Inc.) was formed in 1925. The German phase of the Community of interest formation began in1904 when the following “Big Six” agreed to enter a fifty year agreement designed to transfer information patents and licensing, and to Supply all parties to the agreement with materials, to expand internationally in harmony, and to share profits (16).

a. BASF (Badische Anilin und Soda-Fabrik of Ludwigshafen)
b. Bayer (Farbenfabriken vorm. Friedrich Bayer & Co. of Leverkusen)
c. Hoechst (Farbwerke vorm. Meister Lucius und Bruening of Hoechst am Main)
d. Agfa (Aktiengesellschaft fuer Anilinfabrikaten of Berlin)
e. Cassella (Leopold Cassella & Co. of Frankfurt)
f. Kalle (Kalle & Co. of Biebrick)

A dominant strategy of the “Big Six” community of interest was the allocation of production and distribution without competition and share profits. After its incorporation in 1925, I.G. Farben Industrie A.G. exercised its domination over the world chemical industry and began the manufacture of rayon filaments and fibers, synthetic nitrogen, fertilizers, light metals and alloys, industrial gases, synthetic gasoline, synthetic rubber, and plastics, among other inventions and innovations.
The Bayer Company’s current web site, referring to “A Time of inventions,” revealed that within the network of I. G. Farben sites, it was the Leverkusen site that also developed into a key production location for basic chemicals and intermediates, as well as the largest dyestuffs production site. Rubber synthesis and modern polymer chemistry were the focus of research activities at the time.
In the early 1930s, the Bayer Company through the announcement on its current web Site, stated that polyacrylon itrile-butadiene-rubber (Perbunan) was developed at Leverkusen, and Otto Bayer invented polyethanes in 1937. The Wupperal-Elberfeld facility continued its successful research into drugs to control malaria. Among the Bayer Company numerous inventions and varied Nobel Prize winning discoveries is aspirin, the wonder drug.
With particular regards for Africa and the Middle East Area, the Bayer Company businesses and trade relations are represented throughout the region. Special emphasis and attention have been given to crop protection as a major focus and formulation plants are located in Kenya and South Africa. In Bayer’s Africa strategy, South Africa holds a key position with almost 50 percent of the African continent’s volume of sales being achieved in South Africa.
I.G. Farben Industrie introduced and advanced a successful and influential industrial organization behavior and business management strategy and practice, which most appropriately, is called the “Tarnung Program meaning what Joseph Borkin interpreted as “Corporate Camouflage,” or concealment.
The authors Gerard Aalders and Cees Webes have interpreted the “Tarnung Program” to mean cloaking (18) (the art of concealing the true ownership of a company from the authorities). For example, a common technique employed was that the (I.G.) owner transferred his firm’s assets, patent and licensing agreements, which are situated on the territory of the future enemy, to the identity of a neutral entity who performed as the nominal owner thereafter.
Corporate camouflage, according to Joseph Borkin, is the art or business management Decision making and management practice of concealing foreign properties and capital from enemy governments (19).
The U. S. Congress conducted investigations and published documentation detailing the meaning and structural characteristics of community of interest, which is one of the findings of the 1913 House Pujo Committee Report and a forerunner of the 1990 Gramm-Leach-Bliley Act. The House Pujo Committee Report, As Regards Concentration of Control of Money and Credit, made its decision and concluded that, with particular reference to the evolution of the controlling groups, “there is an established and well-defined identity and community of interest between a few leaders of finance, created and held together through stock ownership, interlocking directorates, partnership and joint account transactions, and other forms of domination over banks, trust companies, railroads, and public-service and industrial corporations, which has resulted in great and rapidly growing concentration of the control of money and credit in the hands of these few men” (20).

MINERAL PRODUCTION TO WORLD DEMAND

The proportion of the world base metals production and consumption, which is Attributed to Africa, did not satisfy or equal the increasing demand. Africa has a huge Abundance of mineral reserves and leads in the top echelon among all countries, first or Second in the share of global reserves of metals such as bauxite, cobalt, diamond, phosphate rock, platinum-group metals (PGM), vermiculite, and zirconium (21).
World demand for metals increased at higher rates and volumes than the production of mineral commodities in Africa, in effect, a scenario indicated in TABLE 4. AFRICA PRODUCTION OF SELECTED MINERAL COMMODITIES IN 2004.
United States Geological Survey Minerals Yearbook—2004
The U.S. Geological Survey Minerals Yearbook—2004 issues the result that mine production of mineral commodities such as bauxite, copper, gold, and lead did not reach the 1990 level of production (22). Africa’s production of manganese mine output exceeded 25 percent of the global production and was just under one-fifth of the refined cobalt world output.
Without the competitive advantage of the utilization of nanotechnology and the applied nanoscale revolution components, where one nanometer is a billionth of a meter, the global leader in the commodities minerals production of chromite and ferrochrome, gold, manganese ore, palladium, platinum, and vanadium was South Africa. In the world’s output of manganese and ferromanganese, rutile, and zircon (23), South Africa ranked at the top and in second place.
The full utilization of production and capacity expansion and diversification in Africa demand the optimum application of nanotechnology and its application to Africa’s transcontinental industrial production activities. Nanotechnology is supraminiaturization and submicron-scale assembly; applications include the manufacturing of nanostructured metals, and nanofabrication on a chip (24).
Africa’s output of aluminum production in the world amounted to an estimated 5 percent in 2004 (see Table 4). The increase in output of refined aluminum is estimated to have a relatively constant rate of increase of about 7 percent annually for the period 2004 to 2011.
The 2004 structure of copper mine production in Africa is represented by Zambia with an allocation of 65 percent; South Africa accounted for 16 percent while the Congo (Kinshasa) produced 11 percent. In contrast with the Year 1990, Africa’s proportion of global copper mine production declined to a level below 5 percent in 2004 from the higher level of 14 percent in 1990 (25).
The modernization, expansion and technological advancement of Africa’s copper mine production have the delivery capability of the achievement of equilibrium with I\increasing world demand through combination with Mitsui Mining & Smelting Co., Ltd. (Mitsui Kinzoku) development and production of nonferrous metals to support all kinds of industries. Mitsui kinzoku’s copper operations are centered at Tamao Smelter which is run by Hibi Kyodo Smelting Co., Ltd. In addition to copper metallurgy, The company produces sulfuric acid and precious metals such as gold and silver as secondary products. The company also aims to boost operational development by business collaboration with Nippon Mining & Metals Co., Ltd (26).
Africa’s gold mine production share of world gold min production, between the 1990-2004 period, declined from the high of 32 percent in 1990 to a low of 23 percent in
1. The falling production levels of gold in Africa during 2004 covered several Countries including decreases in South Africa gold mine production, falling output in Ghana’s gold mine production, declining gold mine output in Mali, and decreases in Production in Guinea. In contrast with this pattern of decreasing output of gold Production in selected African countries, there were several African countries that Experienced increasing gold mine production, namely, Tanzania, Botswana, Niger, and Zimbabwe.
The Mitsubishi Materials Group Gold Label carries a worldwide reputation for trust in the market and, through the strategic alliance of the Tokyo International Conference on African Development (TICAD), already has in place the mechanism and instruments for supporting the acceleration of the modernization and technological industrialization of mining and minerals production in Africa’s transcontinental economy. The Mitsubishi Materials Group’s precious metals business activities possess solid brand power and proved reliability (27).
Iron ore, which is the iron content of ore, produced in Africa was led by South Africa’s production that registered at 71 percent, followed by Mauritania with 21 percent and Egypt’s allocation of 6 percent of continental output.
With reference to iron and steel production in Africa, covering the period from 1990 to 2004, South Africa’s proportion of total African ore output decreased to the level of 51 percent from 66 percent. During the same period, 1990-2004, Egypt’s proportion of iron production increased to 29 percent from the level of 15 percent; Algeria and Libya made up the remainder of the iron production increase (28).
The African production level of crude steel, in 2004, remained constant and about flat even though South Africa’s share of continental crude steel production was 58 percent of regional crude steel production; Egypt was 27 percent and both Algeria and Libya were at the 6 percent level.
The African proportion of world crude steel production, in 2004, totaled almost 2 percent (see Table 4) while Africa consumed just 2 percent of global finished steel consumption. The global scale industrialization of Africa’s transcontinental iron and steel production and consumption represent the African initiated engine of industrial regeneration, combination and economic growth when taking into consideration the optimum utilization of the Mitsui& Co., Ltd. Iron & Steel Raw Materials and Non-Ferrous Metals Business Unit strategy of investment aggressively in raw material sourcing projects that are based on the concept of develop and import and taking initiatives to develop new sources (29) .
African mine production of nickel, between 2003 to 2004, declined by about 4 percent from the higher level of production in 2003. The Southern African countries production of nickel dominated the output on the continent. In contrast with the trend, South African consumption of nickel gained in 2004 reaching the level of 25,000 t over the 2003 level of 24,000 t.
The major proportion of nickel production of South Africa resulted from a coproductr of Platinum-Group-Metals mining. South Africa represented 47 percent of African continental nickel mine production in 2004; Botswana accounted for 42 percent followed by Zimbabwe allocation of 11 percent.
The Platinum-Group Metals (PGM) consist of platinum, palladium, rhodium, iridium, ruthenium, and osmium. South Africa’s output of PGM accounted for the majority of PGM production in Africa, representing 97 percent and followed by 96 percent for the output of platinum and palladium, respectively. South Africa accounts for most of the world’s production of PGM.
The Africa Platinum-Group Metals (PGM) production and global demand require an Africa-owned-combination and investment demand which, if invited, would be ignited by the globalization “joint development contract” created by Mitsubishi Materials Corporation, Mitsubishi Corporation and Furuya Metal Co., Ltd. for the purpose of the development of Platinum-Group Metals (PGM) recycling technology applied to such scraps as used catalyst for feed material (30).

The multiplier effect of the recommended Africa-owned combination, if it is entered an African initiated and requested participation in the “Joint Development Contract,” would add international consolidation and expand the industrialization of the three parties aim at early commencement of the most competitive Platinum-Group Metals (PGM) recycling business through the utilization of Mitsubishi Materials Corporation’s copper smelting technologies and Furuya Metal’s processing know-how of PGMs, as well as the combining of Mitsubishi Corporation’s PGMs investment transactions expertise (31). PGMs have a vast array of applications and uses, among which are chemical catalyst, auto catalyst, glass making furnace, electrical parts, and magnetic memory devices (32).
INDUSTRIAL MINERALS PRODUCTION
The U.S. Geological Survey Minerals Yearbook - 2004 recognized an essential point That Africa is an important producer of many industrial minerals. For example the Number one country in the global output of diamonds by value was Botswana. The Single leading country in the production of tanzanite worldwide was Tanzania, while the Leading countries in the industrial minerals output of ruby, sapphire, and emeralds were Kenya, Madagascar and Zambia, respectively. In the worldwide output of the industrial mineral known as vermiculite, South Africa’s share was 40 percent (33).
Africa’s proportion of world diamond output by volume amounted to 48 percent. The diamond production levels increases were prevalent for African countries including Angola, Botswana, Central African Republic, Congo (Kinshasa), Guinea, Namibia, Sierra Leone, South Africa, and Tanzania (see Table 4).
The global value of rough diamond production, in 2004, attained the level of $10.6 billion and Africa’s share registered at 60 percent. The delineation of this structure encompasses Botswana representing 24 percent of the value of global rough diamond output, followed by both tied in second place South Africa and Angola with a level of 11 percent each, Congo (Kinshasa) at 10 percent and Namibia accounted for 5 percent.

MINERAL FUELS

In 2003 the leading oil and gas companies in Africa were made up of enterprises that included Sonatrach (Algeria), Sonangol (Angola), Egyptian General Petroleum Corp. (Egypt), National Oil Corp. (Libya), Nigerian National Petroleum Corp. (Nigeria), and Sasol, Ltd. (South Africa) (34).
The UN Security Council lifted a more than three-year-old ban on diamond imports from Liberia, applauding the Government’s cooperation with the “ Kimberly Process,” which is a mechanism set up to keep so-called “blood diamonds” from reaching world markets., Re.: Security Council, SC/9006, 27 April 2007. Begun in 2000 by Southern African diamond producing countries, the Kimberly Process led to the adoption in November 2002 in Interlaken, Switzerland, of the international Certification Scheme for rough diamonds, based primarily on national certification schemes and on internationally-agreed minimum standards.
The world coal reserves are distributed over a substantially vast area. More than two-thirds, or about 67 percent, of the world’s recoverable deposits are found in four countries, namely, the United States (27 percent), Russia (17 percent), China (13 percent), and India (10 percent). In the ranking of the order by priority shares the anthracite and bituminous coal, in 2004, represented 53 percent of the world’s estimated recoverable coal deposits (on a tonnage basis); the sub-bituminous coal made up 30 percent, and lignite’s share was 17 percent (35).
South Africa is the major coal producer in the Africa region representing 98 percent, in 2004, of the African continent’s production of coal (36). Some other African countries with sources of coal production include Botswana, Zambia and Zimbabwe. Africa represented an estimated 5 percent of the total world anthracite and bituminous coal output (37).
In the Energy Information Administration/International Energy Outlook 2007, World Coal Production by Region, 2004-2030, the continued production of coal by the dominant three countries, China, the United States and India, will insure the domination of the trend in sustained coal output.
Natural gas is a critical fuel in the electric power and industrial sectors. It is also a preferential selection for utilization in the power sector application for new generating plants promotion of relative fuel efficiency. The industrial sector represented, in 2004, a 44 percent share of world natural gas consumption (38).
In 2004 the Africa regional production of dry natural gas reached about a 4 percent rate of increase over the level in 2003. The major share of the increase was do to the production from Nigeria. There were some gains in output accounted for by other countries, i.e., Libya, Ghana, Tanzania, Mozambique, Equatorial Guinea, and Tunisia.
The structure of African dry natural gas production indicated that Algeria’s proportion of Africa’s dry natural gas production in 2004 was 59 percent; Nigeria’s share was 21 percent followed by Egypt’s share at 11 percent (39).
The African region’s natural gas production, which lacks the technological capability and the capacity utilization to satisfy the magnitude and rising global demand for natural gas consumption, requires the multiplier effect connected with technological advancement that increases, expands plant capacity, and diversifies natural gas production. The technological readiness is available. For example, the ENEOS-Nippon Oil Corporation (NOC) Group, which is Japan’s largest integrated oil company, conducts exploration for and the development of oil, natural gas and other mineral resources, as well as the extraction, processing, storage, sale and shipment of petroleum, natural gas, and other mineral resources. The maximization of TICAD is the priority demanded.
The Nippon Oil Corporation (NOC) develops and markets high quality lubricants for vehicular and industrial uses. NOC has established international joint venture lubricant manufacturing and international marketing relationships in various countries around the world (40).
In the Oil & Gas Journal Data Book 2005 Edition the major African countries Estimated Proved Reserves in gas included Nigeria with 176,000 (billion cubic feet) in 2005, an increase of 17,000 billion cubic feet (bcf) over the level in 2004. Algeria’s Estimated Proved Reserves were 160,500 (bcf) in 2005 which represented a gain of only 500 (bcf) above the 2004 level. Some other African countries with smaller quantities of Estimated Proved Reserves in gas, in 2005, were Egypt (58,500 bcf); Libya (52,000 bcf); Mozambique (4,500 bcf); Cameroon (3,900 bcf); Congo, Brazzaville (3,200 bcf); and Sudan (3,000 bcf) (41).
The petroleum industry industrial organization encompasses the totality of relevant Market and lines of commerce that include the distinguish characteristics such as (a) crude oil and natural gas production industry; (b) exploration; (c) the refining and marketing; (d) the transportation (pipelines, oil tankers, etc.) industry; (e) production sharing agreements; (f) patents and licensing agreements; and (g) strategic alliances. In the field of industrial organization the Exxon Corporation is a conglomerate, which is a non-industry that supersedes the classification by industry, and originated uniformity encompassing horizontal integration, vertical integration and conglomerate integration.

African Union Transcontinental Petroleum Basin (AUTPB)

The African continent is situated in a basin of petroleum, an African Union (AU) transcontinental petroleum basin, encompassing the African continent’s independent nations, adjacent territories and islands that cover a land area of 30.6 million square kilometers, which measure more than 3 times the size of the United States (42).
The African countries “producing oil wells,” and ranked in order of the number of operational oil wells in 2003, have revealed a structure consisting of Nigeria (2,586); Algeria (1,346); Libya (1,470); Egypt (1,267); Angola (1,073),; and Congo, Brazzaville (445) (43).
In 2004 the major oil production African countries were Nigeria, Libya, Algeria, Angola, Egypt, and Equatorial Guinea. Nigeria’s estimated oil production in 2004 was 2.3 million barrels per day (b/d), which represented a 9.6 percent change above the actual 2.1 million barrels per day (b/d) in 2003. Libya held estimated oil production at 1.5 million barrels per day (b/d) in 2004, an increase of 8.6 percent beyond the actual oil production of 1.4 million barrels per day (b.d) in 2003. Algeria held the estimated oil production level at 1.2 million barrels per day (b/d) in 2004 that achieved a gain of 8.5 percent over the 2003 level of actual oil production of 1.1 million barrels per day (b/d).
Angola held estimated oil production of 980,000 barrels per day (b/d) in 2004, reflecting a sharp increase of 11.4 percent above the 2003 actual oil production level of 879,000 barrels per day (b.d) (44).
The current and future directions of the African countries strategic petroleum and petrochemical industries exhibit some industrial transformation achievements arising through increases in capital formation in oil exploration, larger oil production capacity utilization, investment diversification, and rising levels of output.
More specifically, the Mitsubishi Corporation (MC), which is Japan’s largest general Trading company, is at the present time actively promoting upstream businesses in conjunction with MC Exploration Co., Ltd.,, focusing mainly on West Africa and, in the meantime, have commenced oil production as an operator. In Libya, the Mitsubishi Corporation won the tender for several oil exploration blocks with partners, and acquired a participating interest in a gas exploration and production (E & P) block located in the Republic of Tunisia (45).
Some African countries competitiveness in the petroleum and petrochemical industries performances have improved as a result of the delivery of technological capabilities. More specifically, the Nippon Oil Corporation (NOC) and Nippon Oil Exploration Limited (NOEX), a wholly owned subsidiary, successfully concluded the Exploration and Production Sharing Agreement (“EPSA”) for Area 2 Blocks 1 & 2 with National Oil Corporation (“NOC”), the state oil company of the Great Socialist People’s Libyan Arab Jamahiriya (“Libya”). The partners in the blocks are NOEX (90 percent: Operator) and Mitsubishi Corporation (10 percent). The Nippon Oil Group is expanding its upstream operations and conducting exploration, development and production activities around the world. It is keen to expand its upstream operations in Libya, where one of the world’s largest oil and gas reserves are found (46).

China National Offshore Oil Corporation (CNOOC)

The African countries current and future directions in the strategic and critical petroleum and petrochemical industries have accelerated the industrial and economic growth driving forces, and expanded the industrialization processes in connection with investment injections funneled through the China National Offshore Oil Corporation (CNOOC), a state owned Chinese company, announcement that its subsidiary, namely CNOOC Africa Limited has signed some production sharing contracts (PSC) for six blocks in Kenya. The six production sharing contracts (PSC) cover blocks identified as Block 1, Block 9, Block 10A, Block 12, Block 13, and Block 14 in Kenya. The blocks are located in three basins of LAMU, ANZA, MANDERA, with a total area of 11, 343 square kilometers. The signing of these six production sharing contracts indicate China National Offshore Oil Corporation Limited (CNOOC) has successfully extended Its overseas exploration activities to East Africa. This vast area has attractive and untapped exploration potential according to the Web Site CNOOC Limited Expands Overseas Exploration to Kenya Web Site (47).
The African countries current and future directions in the strategic and critical Petroleum and petrochemical industries became even more operational when CNOOC Africa Limited, a subsidiary of the China National Offshore Oil Corporation (CNOOC) Ltd., signed a production sharing contract (PSC) for an oil block in Equatorial Guinea. The contract for Block S was signed with the Ministry of Mines, Industry and Energy, and the National Oil Company of Equatorial Guinea (GEPetrol). The exploration period of the contract is set at five years and CNOOC Ltd. Acts as the technical operator. Under the terms of the contract, the CNOOC Ltd. is committed to conducting seismic data interpretation and drilling exploration wells (48).
The United States Congress Congressional Budget Office has reported that China, with the United States ranked in first place, represented the number 2 biggest consumer of oil in 2004. In the above Figure 2-1 Petroleum Consumption and Domestic Oil Production in China, 1980 to 2005 (millions of barrels a day), China’s petroleum consumption registered at the annual rate of 15 percent China, the world’s most rapidly growing major oil-consumer, has made oil security a top priority for China, and energetically has pursued a “go-out” strategy for new and stable sources of oil in the international market (49).
More specifically China’s biggest offshore oil producer, which is the China National offshore Oil Corporation (CNOOC), will pay US $2.3 billion for a stake in a Nigerian oil and gas field. The CNOOC signed a definitive agreement with South Atlantic Petroleum Ltd. to acquire a 45 percent working interest in an offshore oil mining license, OML130. The deal required the approval of the Nigerian Nation Petroleum Corp. (NNPC) and the Chinese government. The oil block, operated by the oil company TOTAL contains the A Kpo deepwater field, which is about 200 kilometers off the coast of Port Harcourt, and will have the capacity to pump 225,000 barrels per day after 2008 (50).
The CNOOC has acknowledged that its purchase of this interest in OML130 provides some advantages and helps to gain access to an oil and gas field of huge interest and upside potential while located in one of the world’s largest oil and gas basins. The multiplier effect of rising aggregate demand for substantial increases oil production and the aggregation of consumption spurred increases in the level and size of oil exploration activity and petroleum output from several other African countries, i.e., Cameroon, Chad, Congo (Brazzaville), Gabon, Mauritania, Niger, Sao Tome and Principe, Ivory Coast, Sudan, Eritrea, Somalia, and South Africa.
One determination of the measurement of the impact of crude oil production is to examine optimum allocations or derivatives from that are yielded from one barrel of crude. The following frame of reference, “Petroleum Products Yielded from One Barrel of Crude, 2005, was issued by the United States Energy Information Administration (EIA) (51).

MINERAL INDUSTRIES OF THE MIDDLE EAST

The 15 countries of the Middle East that are included in the U. S. Geological Survey Minerals Yearbook Area Reports: International 2004 Africa and the Middle East Volume III, are representative of a land area of over 6 million square kilometers, which is an estimated 66 percent the size of the United States. This area is nearly 4 percent of the world’s land mass.
The production and processing of crude oil and natural gas, where crude oil is measured in barrels and a barrel of 42-U.S. gallons of crude oil yields more than 44 gallons of petroleum products, form the core upon which the Gross Domestic P most of the countries in the region rely, see the preceding TABLE 4 MIDDLE EAST PRODUCTION OF SELECTED MINERAL COMMODITIES IN 2004 (52).

The investment data and political risk frame of reference focused on the fact that the Area’s minerals were dominated by state owned business enterprises. The upstream prospects included the expected construction or expansion of regional developments that involved the alumina refinery, aluminum smelters, ammonia and urea plants, cement plants, coke manufacturing plants, crude oil refineries, liquefied natural gas (LNG) plants, methanol plants, natural-gas-processing plants, and natural-gas-to-liquid facilities (53).
The Organization of the Petroleum Exporting Countries (OPEC)
The Organization of the Petroleum Exporting Countries (OPEC) possess or control 75 percent of the oil reserves in the world. In 2005 the Middle East member countries represented the bulk of the oil reserves of OPEC, especially with countries such as Saudi Arabia, Iran and Iraq proportions that make up 56 percent of the OPEC total proven reserves now amounting to a level of more than 900 billion barrels.
The following Figure, OPEC Share of World Crude Oil Reserves (2005), presents a graphical depiction of the strategic and critical role of The Organization of the Petroleum Exporting Countries in decision making involving world economic oil and gas input and output relations, oil production, and trade and investment in the world economy.
The U. S. Energy Information Administration (EIA) provided a statistical analysis of the production of oil by OPEC countries in Table 3a. OPEC Oil Production as part of the EIA Short Term Energy Outlook April 2007. The OPEC 10 dominated oil production.

OPEC Share of World Crude Oil
Reserves
Table 3a. OPEC Oil Production

The OPEC member countries, due to their substantial proven oil reserves, engage in industrial activity and capacity utilization that enables the increases and decreases in output that match the fluctuating global demand for oil and natural gas. Iraq’s degree of the determination of the level of output of oil by OPEC remains risky due to on-going war conditions. Iraq’s uncertain delivery capability to produce petroleum output expectations in 2007 has the possibility of approaching an estimated 2.0 million barrels per day (56).
Iran’s oil capacity and petroleum output in 2004 was 4.1 million barrels per day and is anticipated to grow rapidly at rising levels up to 2015. Kuwait and the United Arab Emirates (UAE) oil production growth trends are estimated to increase and rise rapidly in the long run. In 2004 Kuwait produced 2.5 million barrels per day and at the same time period the UAE output of oil was 2.8 million barrels per day. They are estimated to experience rising rates of oil production over the long run.
The total OPEC oil production in March 2007 was 34.7 million barrels per day, reflecting an increase of 150,000 barrels per day above the level in February 2007, which was 34.6 million barrels per day (Table 3a. OPEC Oil Production).

OPEC Combination

The objective of The Organization of the Petroleum Exporting Countries (OPEC) includes “to coordinate and unify petroleum policies among Member Countries in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations, and a fair return on capital to those investing in the industry.”
OPEC is a permanent intergovernmental organization that was created at the Baghdad Conference on September 10-14, 1960. The five founding members included Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. The current members are the following nations shown on the OPEC Web Site.
The OPEC Statute stipulates that “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourth of Full Members, including the concurring votes of all Founder Members”. OPEC describes and characterizes crude oil, which is the world’s strategic and critical mineral fuel, as a naturally-occurring substance found in certain rock formations in the earth. It is a dark, sticky liquid which, scientifically speaking, is classified as a hydrocarbon. This means, it is a compound containing carbon and hydrogen, with or without non-metallic elements such as oxygen and sulfur. Crude oil is highly flammable and can be burned to create energy. Along with its sister hydrocarbon, natural gas, derivatives from crude oil make excellent fuel.
The OPEC combination, with a targeted “control of oil mission”, encountered global competitors who are the Fortune Global 500 World’s Largest Corporations, and Fortune 500 America’s Largest Corporations.

OPEC Pricing

OPEC collects price data on a “basket” of seven crude oils, including the following countries, Algeria’s Saharan Blend; Indonesia Minas; Nigeria Bonny Light; Saudi Arabia Arab Light; Dubai Fateh; Venezuela Tia Juana; and Mexico Isthmus (a non-OPEC oil). The OPEC price, which was introduced on January 1, 1987, is an arithmetic average of these oils. OPEC uses this price to monitor world oil market conditions.
In order to respond to changes in world oil market conditions and the global demand for petroleum, OPEC set up a price band mechanism that is triggered by the OPEC basket price. In accordance with the price band mechanism, the OPEC basket prices above $28 per barrel for 20 consecutive trading days or below $22 per barrel for 10 consecutive trading days would result in production adjustments, thereby allowing OPEC members to manage oil production more efficiently.

OPEC Multinational Enterprise Diplomacy

The Organization of the Petroleum Exporting Countries (OPEC) is not the first association of independent producers to enter voluntary agreement between producers of oil and natural gas multinational enterprises with the aim to dominate international marketing arrangements as well as international business diplomacy control of petroleum.

Any activity designed at domination of the world trade in the flow of oil must take into major consideration the control of OPEC, the supplier of crude oil to match the global demand for petroleum.
The classic frame of reference and foundation, or the best of its kind, for the formation of international business diplomacy or formation of cartels, which are aimed at emphasizing noncompetitive behavior, the United States Congress, Committee Staff Report, “The International Petroleum Cartel” (57).
The system of determination of production quotas and the utilization of interlocking directorates regulate oil output ratios. An in-depth examination of the international noncompetitive behavior mechanism is placed under scrutiny in John M. Blair’s The Control of Oil (58).

OPEC, in recognition of maximizing huge oil exploration and the enormous growth in Petroleum production realities, integrated its energy independence mechanism comprising East and West Asia in the Second Asian ministerial Energy Roundtable held In Riyadh, Saudi Arabia, May 2, 2007. The East and West Asia energy combination is already established, clearly defined and mutually supportive. For example, as stated in remarks issued by OPEC’s Secretary General, if you take the total of crude oil exports for Asia, Europe and the United States, OPEC supplies more oil to Asia than to Europe and the United States combined (59).
India’s Minister of Petroleum & Natural Gas addressed the Third OPEC International Seminar on “OPEC in a New Energy Era: Challenges and Opportunities,” and delivered the keynote address: “Petroleum and Sustainable Development.” He emphasized the changes sweeping “the global hydrocarbon economy” with the acknowledgement that “the Middle East countries supply about 70% of Asia’s oil consumption. Asia accounts for about 65% of total exports from the Middle East. In the emerging oil world order where the Asian economic growth is widely acknowledged to play a pivotal role, there are major opportunities for OPEC. Forging partnerships in developing knowledge base in Asia for optimum exploitation of hydrocarbons, for expansion and modernization of refineries, for augmenting regional oil and gas transportation infrastructure and exchange of information, are examples of such new opportunities for OPEC. We are confident that OPEC will utilize these opportunities for betterment of the global economy (60).

On December 21, 2005, while on a visit to China, the OPEC Conference President and Secretary General Sheikh Ahmad Fahad Al Ahmad Al-Sabah emphasized the realities and the necessity for the institutionalization of the OPEC-China Energy Dialogue. He gave special attention to the 10 percent rapid economic growth rate of China as well as China being a huge importer of petroleum and natural gas. The OPEC President advocated even more substantial improvements, greater volume, and increasing advancement in bilateral investment and international trade relations between China and several Member Countries of OPEC.
The Africa and the Middle East Area minerals production, global demand, and combination encompass the full-scale acceleration of industrialization, and the supra-maximization of combination in the achievement of global management.

-----------------------------

*Adjunct Professor of Management, New York University School of Continuing and Professional Studies, New York.

-----------------------------

#Tables