General Introduction

Formed underground between 20 and 350 million years ago, hydrocarbons (oil and natural gas) are and remain the most widely used primary energy source in the world, despite the emergence of renewable energies, which are now considered cleaner energies due to their low carbon footprints. They are a lever for development for nations because of the immensity of the products and by-products as well as the uses that result from the transformation of this raw material.

Over the years, the oil sector has become a real industry that has embraced for its development the engineering sciences (mechanics, electronics, physics, chemistry, mathematics, geology, etc.), legal, economic, political and also social sciences.

The negotiation of exploration and exploitation contracts and the management of oil conflicts require legal, geopolitical and diplomatic knowledge and skills.

The search for oil and its extraction require advanced and innovative technologies that have been developed over time and that are adapted to the geographical and geological environment in which it (oil) was formed.

The possibilities of its extraction and development (processing) are defined by researchers and engineers in petroleum geosciences (petroleum geology and geophysics, geochemistry, drilling, reservoirs), petroleum refining, petrochemicals and economics who carry out technical studies and evaluations of the economic and financial profitability of petroleum projects.

The main purpose of this reflection, which gives a global overview of the oil sector in West Africa, is to question the responsibilities and roles of States as well as to evaluate the benefits that the latter derive from this business vis-à-vis foreign investors from exploration to exploitation, so as to ensure that oil in Africa is no longer as Bruno Carton (2000) so aptly put it, “violence against peoples” or “rent (which) feeds rent and debt” but rather a pledge of peace and a source of prosperity.

This work, structured in three parts and six (6) chapters, deals with the various aspects and themes relating to the policy, governance and management of petroleum resources, as well as the strategy for the development of a viable, integrated and sustained petroleum industry in West Africa.

The first part is devoted to general information on the oil industry and the responsibilities of States in the monitoring and control of oil exploration and exploitation activities.

The second part deals with oil contracts and oil taxation and analyses the different tax regimes used in West Africa.

The third part examined the influence of political stability, governance and corruption on the performance of the oil sector in West Africa.

Specifically, the first chapter addresses the value chain of the hydrocarbon sector. The concepts developed in this chapter are intended for students of petroleum sciences but also for managers and decision-makers in the oil sector at the level of West African States. Mastery of these concepts will enable States to adopt policies and strategies based on the establishment of the necessary technical and infrastructural capacities at the level of all links in the oil chain, from upstream to downstream, in order to place on the market of the Community and world space finished products or, at the very least, semi-finished products resulting from the processing of hydrocarbons.

The second chapter devoted to upstream oil zooms in on oil exploration and exploitation strategies. This chapter thus develops the entire process and techniques that contribute to the allocation of permits as well as to the conduct of hydrocarbon exploration and exploitation operations. It is mainly aimed at students in petroleum geosciences.

The third chapter deals with tax regimes in the oil industry, a very essential theme for students of petroleum sciences but especially for managers and decision-makers in the hydrocarbon sector. The aspects discussed can serve as a guide or guidance in the context of the implementation of legislative and regulatory texts to govern the oil sector, particularly in its fiscal and economic aspects.

The fourth chapter uses the concepts developed in the second and third chapters to make a comparative study of the tax regimes used in six West African countries and to deduce the cash flow and revenues derived by each party (State and contractor) to the contract for the exploitation of petroleum resources.

The fifth chapter examined the socio-political determinants to ensure a good performance of the oil sector before identifying the roles of the various key actors, namely the State, operators or investors and international institutions to prevent political instability, bad governance and corruption in the sector. The topics discussed are useful for policymakers and all actors in the oil sector.

Finally, the sixth chapter provides an in-depth analysis of the situation of political stability, governance and transparency in the management of oil resources in some West African countries and their influence on attracting foreign investment and on the responsible management of oil rents for the benefit of the population.