In Africa, “there will be winners and losers”

Investors are pouring money into Africa’s energy sector, drawn by the continent’s long history of known hydrocarbon reserves and growing political stability.

But they’re also nervous.

The January attack on the Ain Amenas natural gas facility in Algeria, which left at least 37 foreign workers and 29 militants dead during a four-day standoff between al-Quaida-affiliated militants and the Algerian army, was a grim reminder of the risks.

The facility is jointly run by BP, Algeria’s Sonatrach and Statoil of Norway.

Lord Mark Malloch-Brown, FTI Consulting’s London-based chairman of Europe, Middle East and Africa, was in Houston last week to talk with potential investors about balancing potential risks and rewards.

Malloch-Brown, who served as deputy secretary general and chief of staff of the United Nations under Kofi Annan before joining former British Prime Minister Gordon Brown’s cabinet, has long-standing ties to Africa. He previously had worked for the World Bank and was knighted for his international service in 2007.

His father was South African.

And he said that the continent is more politically stable than ever, with a stronger middle class, higher literacy rates and lower rates of infant mortality.

Still, he acknowledged that with 48 of the 54 African countries in some stage of energy exploration, not all will come out on top.

“There will be winners and losers,” he said. And the winners won’t necessarily be those with the biggest reserves, but those whose governments provide the most efficient support for international investors.

Some governments recognize that, while others don’t, he said.

“There are governments which are unbelievably focused on it now because they see the opportunity. The Mozambique government, the Ugandan government. There are others who are waking up to it.”

But Malloch-Brown said other governments are in no hurry and think the oil and natural gas can be exploited whenever they are ready.

“I try to encourage them to understand they don’t necessarily have that luxury,” he said. “Investors are going to be making choices. Capital will be rationed.”

You can read more of the interview at HoustonChronicle.com.

Total oil production in 2011 Many Eyes