Energy of Africa Draws the Eyes of Houston
By SIMON ROMERO

HOUSTON, Sept. 22 - When Angola recently opened its only consulate outside New York, few people here were surprised that Houston was chosen. 

Texas already leads the nation in trade and commerce with Africa. More than 1,000 Houston companies do business there, and 60 have significant subsidiaries on the continent, according to the city of Houston.

The city may have a way to go before it becomes a de facto commercial capital to Africa the way Miami is for much of Latin America, but it is becoming increasingly important to African commerce and diplomacy. And the city is becoming a significant starting point for affluent Africans seeking to do business in the United States.

The reason is oil. This is the energy capital of the United States, and West African countries like Angola, Equatorial Guinea and Nigeria are increasingly important suppliers of oil. They already account for about 14 percent of all American oil imports, and are forecast to supply 20 percent soon.

That has drawn giant energy corporations like Exxon Mobil and ChevronTexaco to the region, as well as midsize companies in related fields, like Bivac International, a company that inspects cargo at ports, and the Hanover Compressor Company, a provider of natural gas compression equipment.

"We already have a presence in Nigeria, but we want to be in Angola," said Steve Russom, Hanover's vice president for product development and technology. "The domestic oil and gas market is kind of flat, but Houston's still the epicenter for the energy industry, essentially the place where we can put together deals anywhere."

The interest of energy companies in West Africa is encouraging ventures in a variety of fields. EDI Architecture, like dozens of other companies here, is betting its future on strengthening ties to Africa. It designed the Angolan consulate here, a luxurious corporate suite discreetly decorated with the burgundy and gold colors of the nation's flag.

The hunger for additional deals is not lost on Houston's leaders. Mayor Lee P. Brown, for instance, led the first trade mission of any American city to Luanda, the Angolan capital, this month. He went with 20 executives interested in reaching business agreements in Angola, a southwestern African country about twice the size of Texas and rich in oil. 

Mr. Brown also visited neighboring Namibia, a mineral-rich former German colony of two million people. The port of Houston concluded the trip with an agreement to provide consulting advice to the Namibian port of Walvis Bay.

EDI Architecture was among the more experienced participants, having already built American-style residential compounds in Angola for Exxon Mobil and Angola's national petroleum company. It is currently building a 20-story office tower in Luanda.

"It's not like there are Wal-Marts or Home Depots in Africa where people with money can consume," said Darcy Garneau, associate principal at EDI, which has opened an office in Luanda. "When we build a residential compound there we bring in everything down to the forks and knives, and that's an opportunity for us."

Whetting the appetite for more opportunities are expectations that the expansion of West Africa's oil industry is just beginning. It is expected to account for one of every five barrels of growth in global oil production capacity in the next decade, according to Cambridge Energy Research Associates. 

New ventures in smaller countries like Chad, the Congo Republic, Gabon, São Tomé and Príncipe, and Niger are expected to account for much of the growth.

"Conducting business in the region requires a healthy appetite for risk," said Rogers Beall, a businessman here with a contract to help negotiate oil exploration agreements for Guinea-Bissau, a West African country of 1.3 million whose president, Kumba Yala, was ousted in a bloodless coup last week. Mr. Beall said he expected the military officers in charge of the government, led by Gen. Veríssimo Correia Seabra, or other transitional leaders to continue to use his advice on moving forward with oil exploration plans.

Despite such complications along the way, prospects in Africa are drawing many companies in Houston that are not in the energy business but are related to it. Charter airlines, construction companies, port inspectors and transportation companies based here are trying to seize on Africa-related opportunities.

Among the companies represented in the Angola mission were large energy concerns like Exxon Mobil, ChevronTexaco and Devon Energy. But so were smaller companies, including Hanover Compressor, Bivac and Houston Express, a new airline that is offering nonstop service from Houston to Malabo, the capital of Equatorial Guinea, and to Luanda.

The airline is backed by Sonair, the aviation subsidiary of Angola's national oil company. The Luanda flights are not cheap, running $3,615 for a round-trip ticket in coach, $5,915 for business class and $8,240 for first class. The airline is clearly focused on business travelers, with its MD-11's outfitted with 12 first-class seats, 78 business-class seats and 21 coach seats.

There are several other reasons Houston, the nation's fourth-largest city, has been quick to establish ties with Africa. Largely because of the need for employees of energy companies to travel back and forth from drilling areas, Houston has some of the nation's best transportation links to Africa, including direct flights to African capitals like Johannesburg and Lagos, Nigeria, as well as the service to Malabo and Luanda.

At the same time, the port of Houston, the leading American port in terms of foreign tonnage, exported more goods to Africa last year, 33,374 tons, than to Asia, 23,346 tons. Over all, Africa accounted for 5 percent of the port's total trade in 2002, more than the Middle East, Central America and or the Caribbean.

Influential émigrés like Kase L. Lawal, a Nigerian-born businessman and owner of Camac Holdings, a Houston-based oil company with interests in Nigeria and South Africa, are another reason Houston's influence in Africa is growing. There are about 20,000 people from just one country - Nigeria - here already, for example. More are attracted each year by Houston's warm climate and its reputation as a relatively easy place to establish a business.

While the African immigrant community is still dwarfed by the larger communities of Latinos and Asians who poured into Houston in the last 20 years, the Africans are for the most part better educated than other immigrants - and even native-born Americans in the city. Nearly 35 percent of Africans in Houston have college degrees and 28 percent have postgraduate degrees, compared with 28 percent of American-born whites with college degrees and 16 percent with postgraduate degrees, said Stephen Klineberg, a professor of sociology at Rice University.

This has allowed some Africans to advance in areas like banking and publishing as well as energy. And that suits Chido Nwangwu, the publisher of USAfrica, the nation's largest African-owned newspaper, just fine.

"The main problem with the relationship between Houston and Africa is that it is predominantly based on the energy industry," said Mr. Nwangwu, a native of Nigeria who recently created a magazine called Class for affluent Africans in the United States. "We're at risk of becoming too dependent on one area if we don't achieve a wider mix of transactional interchanges."

To be sure, most of the investments in Africa by companies from Houston are focused on extracting natural resources like oil, gas and timber. Few involve direct investment in factories or manufacturing plants that create jobs and lay the foundation for sustained economic growth.

Still, such efforts are part of Houston's aspiration to become a global city like New York and Los Angeles. Mr. Klineberg said Houston's best chance of achieving this was through a "realization that our location near depleting oil fields won't cut it anymore."

"Houston was a biracial city dominated by white men for much of its history," Mr. Klineberg said. "If we're to get beyond that system and capitalize on our diversity, it has to be done by thinking internationally."
 

Copyright 2003 The New York Times Company