African oil production accounts for 13% of total oil production worldwide. Experts believe that Africa is going to contribute 33% of total expected oil production growth in the coming years. The growth projection creates amongst investors as well as exploration companies an atmosphere comparable to the mining rush experienced by North America in the mid-1840s. The search for oil and gas has begun all over the African continent.

Dubai based company Black Marlin Energy is an oil and gas exploration company focusing on identifying overlooked or misinterpreted ground floor opportunities around the globe. The company emphasizes that it has long ago recognized the oil and gas potential of the East African Margin, which has been underestimated in the past. According to Black Marlin Energy, $ 500 million us dollars has been spent on research in East Africa and approximately 600 wells have been drilled from Eritrea to Mozambique with a high success rate.

Range Resources Ltd., another company engaged in oil and gas exploration from Australia, has directed its principle activity towards searching oil, gas and mineral resources in Puntland, Somalia. Range Resource could be described as a high risk taker considering the current situation in Somalia. However, some investors believe that there are large undiscovered oil fields off the coast of Somalia, which could provide a huge return in capital employed in the near future.

Interestingly, exploration of natural resources appears to be conflict resistant and bullet proof even in the most violent corners of this planet.

Coastal countries especially in the Horn of Africa are predestined for offshore oil exploration as they share the same geographical region as the Arabian Peninsula.

Eritrea has proven that mining could become one of the important pillars of its economy. In a recently published statement the Government of Eritrea has announced that the country will export gold and copper starting from autumn 2010.

This is a major step forward for the country because the export of gold and other metallic ores will significantly contribute to the earnings of much needed foreign exchange.

In 2008 the Government of Eritrea signed two agreements with Defba Oil Share Company on oil exploration and development. The company is supposed to undertake oil exploration activities in two blocks of the Eritrean northern territorial waters.  The Defba Oil Share Company has been set up through the partnership of the Eritrean government and Energy Alliance Company W.L.L. Thus, time will tell if oil and gas exploration could become another pillar, which will play an important role in the development of the country’s economy.

In financial investment overestimated risk can turn into huge profits, if detailed analysis has been conducted in understanding the facts on the ground when assessing a business, company or country.

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