This region now has the world’s fastest growth rate for new oil reserves, with $5-$10 billion a year being invested to develop its offshore resources. Oil industry experts speculate that by 2010, the seven top oil-producing “New Gulf States” – Equatorial Guinea (E.G.), Sao Tome & Principe, Gabon, Cameroon, Angola, and Congo, plus landlocked Chad -- may account for at least 10-15 percent of the world’s conventional oil and gas reserves, and an even larger share of US energy imports.
This means that, collectively, these tiny African countries may soon play a much greater role in world energy supply than Nigeria, Mexico, Venezuela, or Iraq.
In addition to raw economics, this shift is also being driven by political factors. The US is eager to free itself from OPEC, especially from dependence on politically-sensitive countries like Venezuela and Saudi Arabia. And alternative sources of supply like the Caspian pipeline, Central Asia producers, and Siberian exports have been slow to materialize. So it is not surprising that the development of Gulf of Guinea energy has recently received high priority, not only in Houston and Dallas, but also in Washington, D.C. As the recent attempted coups against Equatorial Guinea's dictator and Sao Tome's President indicate, they are also receiving increased attention from the world's "oil mafia" and their attendant mercenaries.
In principle, the region's new oil discoveries should also provide a gigantic windfall to the 41 million long-suffering inhabitants of these otherwise-impoverished West African countries. Their life expectancy now averages just 46 years, and more than half of them still survive on less than $1 per day. There is an unique opportunity for the Great Powers that are most active in the region – the US, France, the UK, China, and Spain, as well as multilateral institutions like the World Bank and the IMF -- to learn from the many previous negative experiences with the impact of oil wealth on development, and establish some “rules of the game” to insure that it really goes to support democratic development.
Unfortunately, rather than seize this opportunity, these Great Powers appear to be defaulting to age-old imperial practices. They are permitting their corporations to define investment and development strategy for them. With few exceptions, the result is a “winner-take-all” race for the riches, with the region’s corrupt local dictators and tiny private elites dividing the spoils with transnational corporate allies, private bankers, private armies, and other intermediaries.
There are already many “per-country” accounts of these developments in the Gulf of Guinea. But it is helpful for us to consider them collectively. Among the most important patterns:
All told, these patterns do not bode well for the future of democratic development for the “New Gulf States” --- even as the US invests so heavily to bring representative government and stable government to 25 million Iraqis.
Eighty-five years ago, at the end of World War I, when a similar approach was taken by that period’s Great Powers to the division of oil wealth in the Middle East, they could at least plead that they had little experience with the negative consequences of an elitist, laissez-faire approach to oil-rush based development. Today's Great Powers have no such excuse.
Article in The Age (Australia) 01/06/04
Africa's oil pool proves tantalising for sharks
Oil predators are keen to tap Sao Tome's reserves. Tim
Butcher reports.
Off the West African coast, the sharks are circling
the sleepy "chocolate islands" of Sao Tome and
Principe, eager to bite off slices of billions of
dollars of hoped-for oil revenues.
One of Africa's poorest nations - so undeveloped that
there are no traffic lights in the entire country - is
being spoken of as a new Kuwait following recent
surveys showing that up to 11 billion barrels of oil
lie under its territorial waters.
Prospects of an oil boom in the tiny former Portuguese
colony on the Equator have attracted a wave of
charlatans and swindlers, eager to cash in, and Sao
Tome is keen to avoid becoming the next African
country to prove that oil can be more of a curse than
a blessing.
Many of the people of Nigeria, Angola, Equatorial
Guinea and elsewhere grew poorer as vast oil revenues
were stolen by corrupt regimes and businessmen - a
situation that Sao Tome's chubby and affable leader,
President Fradique de Menezes, says he wants to
prevent. Oil has already led to unrest. It was said to
have helped foment an attempted coup last July, when a
group of disaffected soldiers temporarily seized power
from de Menezes.
Advertisement
Advertisement
He survived and has made progress. He has followed
the advice of western economists about how to develop
the oil sector, and has presided over a bidding round
among oil companies that is seen as the most
transparent in African oil industry history.
"This place really is on the map more than it ever has
been, but the sharks are already circling in the
water," said the former cocoa trader.
"We are trying to keep the process clean, but the
pressures are growing stronger and stronger every day.
It is becoming horrible."
Every few days, charter planes full of businessmen
from Nigeria, Angola and elsewhere fly into Sao Tome's
tiny international airport. Most of the visitors want
time with the president, who was recently diagnosed
with diabetes and for reasons of ill-health has
refused to confirm whether he will stand for
re-election in 2006.
"Sure, they offer me all kinds of things, but I just
listen to what they have to say and show them the
door," he said.
Sao Tome, with a population of only 140,000, is also
being wooed by the United States, which has deployed a
military liaison officer there as part of its war on
terrorism.
Britain is also increasing aid money, with £135,000
($A346,000) going to fund a project of public
education about how to use oil revenues.
For now, Sao Tome's government appears clean, but it
also seems somewhat out of its depth.
With oil revenues still years away, the country owes
£200 million in foreign debt - one of the highest per
capita levels in Africa - and remains seriously
under-developed.
Cocoa growing might have earned the place the
soubriquet of "chocolate islands" and Portugal
millions in earnings, but it now generates only £3
million in exports.
The rest of the £30 million national budget comes from
foreign aid. This seems likely to be swamped by oil
revenues. The rights to explore just one block of
seabed will earn Sao Tome £50 million later this year
from Chevron-Texaco and there are plenty more blocks
for tender.
"If you have high poverty, high expectations of oil
revenues and a low level of capacity to deliver, you
might have a bomb on your hands," said Rafael Branco,
the suave former oil minister.
"The challenge is to defuse that bomb."
- Telegraph
http://uk.groups.yahoo.com/group/saotome
Posted by: Rose | June 01, 2004 at 03:17 AM