Wednesday, March 31, 2004

Tourism + terror = tourorism 

The flow of tourists on the island of Lamu has declined. The situation of Lamu reflects what's going on in Kenya: the previous terror attacks have delt a hard blow to the Kenyan tourism industry. Somaliland is not in a better shape.

Mogadishu-Fallujah: Deja vu? 

The latest images from Fallujah have sent a shockwave in the American psyche and triggered memories of Mogadishu.

As more people are wondering what Iraq will become after June 2004, it's not a bad idea to check the situation in Somalia, Ten Years Later, and read about terrorism in the Horn of Africa.

US-Saudi Arabia: Tunis, Vienna 

Two events supposedly unconnected may actually be more related than it seems: the OPEC meeting in Vienna and the postponed Arab League summit in Tunis. I had started to connect some dots, but the big picture didn't appear before I learned that "In the Arab world, everything is interconnected", at least according to Nail Al-Jubeir, a spokesman for the Saudi Embassy in Washington.

"In the Arab world, everything is interconnected,'' Al-Jubeir added. "To resolve the Arab-Israeli conflict is a must, to reach justice and equality for the Palestinian people in the territories. Anything without (that) is not going to go anywhere." ... Arab analysts said a major reason for the Tunis collapse was Ben Ali's unwillingness to allow serious consideration of the Arab world's leading peace proposal -- [Saudi Arabia's] Crown Prince Abdullah's Arab Peace Initiative, adopted two years ago at an Arab League summit in Beirut. The initiative offers Israel full normalization of relations with the Arab world in exchange for a total withdrawal from all territory occupied since 1967. Israel has opposed the plan, and U.S. officials have avoided taking a clear position on it. In Washington, Secretary of State Colin Powell denied some Arab news reports that Ben Ali was acting under private orders from the United States to sabotage Abdullah's initiative.

Now, consider this: on the eve of the Vienna summit, it's now obvious that OPEC will push ahead with energy supply cuts. Inside the organization, Saudi Arabia was among those who favored the move.

Saudi Arabia, the world's biggest oil exporter, led the push for the cartel to implement cuts of 1m barrels a day from April 1, as first agreed in Algiers in February. ... "The Saudis have gone from being a reliable Opec price dove to Opec's arch price hawk," Mehdi Varzi, an energy consultant told Reuters. "That's because of the demands of the Saudi budget. They need higher and higher oil prices every year to meet current expenditure for a larger and larger population." Most in Opec blame speculative investment funds for pushing up prices by seeking to protect themselves from a weaker dollar by investing in oil futures, whose prices rise as the US currency falls.

In other words, the Saudis not only refused to comply with the US demand to increase production, but they pushed for cuts of 1 million barrels a day. This move reveals that the relation between the United States and Saudi Arabia is not what it used to be. Just read what Robert Baer wrote last year about the strategic partnership between both countries.

There's an extremely close relationship between the White House and the king of Saudi Arabia, along with the oil minister and the ambassador. You can call the ambassador up and say, "Look, we're forecasting a shortage in the world oil market because of speculation. Can you pump more?" In every crisis, the Saudis have come through. Let's be frank about it—they were our best allies in the Middle East. They banked this oil—2-3 million barrels—at a very high cost, they never got reimbursed for it, and they were always there. The Iran-Iraq war, they were there. When the Iraqis overran Kuwait, they were there. Strikes in Venezuela, they came through and pumped more oil. They had their own interests, but they also protected our markets as well. ... We pay market prices. But the point is that it's all based on supply and demand, and by increasing the supply, they keep down the price. It's something the Saudis have paid out of their pockets. We've never reimbursed them for this surplus capacity.

This time, when the White House called up the Saudis and said “Can you pump more?”, the Saudis just said “No”. I understand the budgetary explanations provided by some analysts as well as the currency issue. But oil is rarely far from politics, and the recent “postponement” of the Arab League summit teaches us another lesson: Saudi Arabia wants some change in US policy towards Israel. This issue, nevertheless remains a taboo in American politics.

Discussing the relationship between the U.S. and Israeli militaries, and how the U.S. military is using Israeli tactics while occupying Iraq, former CIA analyst Kathleen Christison writes on CounterPunch, "almost all influential individuals and groups in the U.S. political landscape still shy away from discussing the degree to which this Israeli connection has been a major factor in determining the entire complex of U.S. policies on Iraq and the Middle East since September 11. In the eyes of most Americans, the correctness of the ever stronger ties between the right-wing governments of the United States and Israel is simply not to be questioned."

John Kerry can keep on saying that “no young American in uniform ought to ever be held hostage to America's dependence on oil in the Middle East”, he nevertheless urges oil producing countries to increase production without bringing anything on the table that might send the right signal to the Saudis. Just like President Bush. And just like Senator Tom Daschle, the top Democrat in the Senate, who said Bush ought to tell American friends in the Persian Gulf (read Saudi Arabia) “to open up the spigot". In his view, the United States has done enough in the region to provide for “stability militarily” and run operations in the oil industry for OPEC countries in the Gulf not to “limit the amount of production.” What the current crisis shows is that the Saudis beg to differ: the stability in the region having gone through the Iraqi window, why should they increase their production when their American friends refuse to discuss what matters to them? In the answer to this question may lie the secret connect between Tunis and Vienna. As far as African oil politics is concerned, here lies also some of the keys to the new US-led political as well as energy order in North Africa.

Harvard scammer scammed 

Resisting sharing this story with you has been impossible:

A former Dana-Farber Cancer Institute researcher and Harvard University professor is scheduled to be arraigned today in Roxbury District Court on charges of bilking coworkers, students, and friends out of $600,000 they invested in a bogus Internet research company he claimed to have started in China to fight SARS, Boston police said.

Police said Weldong Xu, 38, of Brookline, persuaded a total of 35 people since last July to give him money for the research company, which he told them was dedicated to tackling severe acute respiratory syndrome, which caused an international scare last year. At Dana-Farber, where Xu was a researcher in cancer and AIDS vaccines, he persuaded co-workers to give him $160,000, with the agreement that the money would be returned within a few weeks, police said. When he was arrested, Xu told police he was investing the money in a Nigerian business venture in which he expected a $50 million return.

"I tried to tell him he had been scammed," said Detective Steve Blair, speaking at a press conference last night at Boston police headquarters. "His plan all along was this Nigerian investment."

CSIS report on African oil 

The report Promoting transparency in the African oil sector (pdf) is now available on the CSIS website. This study by the CSIS task force on Rising U.S. Oil Stakes in West Africa has been funded by the The U.S. Institute of Peace. It aims to examine political and humanitarian developments in West African oil-exporting states -- mainly Nigeria and Angola -- and the region's geo-strategic importance as a major supplier of U.S. oil. Co-chaired by CSIS Africa Program director J. Stephen Morrison and David Goldwyn of Goldwyn International Strategies, the task force has seek to determine how best U.S. policy can promote development (economic reform), democracy (good governance), transparency and improved respect for human rights, as well as environmental stewardship. Expect thorough analysis of the report on this blog.

Tuesday, March 30, 2004

OPEC latest dispatches  

* Playing with a headline from Reuters, I would say that "the United States faces OPEC showdown on oil cut". And I really mean it, as you will see if you read on: the Saudis want to go ahead with the planned production cut, whereas Kuwait and the United Arab Emirates (UAE) resist.

Analysts said the rare split across OPEC's core Gulf Arab membership suggests the United States, having failed to budge Saudi, now is focusing diplomatic efforts aimed at securing lower prices on Kuwait and the UAE. "The UAE and Kuwait are the guys that the U.S. can count on now," said Roger Diwan of Washington consultancy PFC Energy. The Gulf pair appear to back Washington's view that oil prices, recently at a 13-year high, should be allowed to ease to avert potential damage to U.S. and world economic growth. "Both the Kuwaitis and the UAE appear to be dancing to the U.S. tune but the market believes the Saudis will get their way," said Nauman Barakat of brokers Refco in New York. ... But [Saudi oil minister] Naimi said OPEC already had implemented the April cut to combat lower seasonal second quarter demand. "As far as Saudi Arabia is concerned April 1 has been implemented and I believe others have done so as well," the Saudi minister told reporters in Vienna.

* The jury still out about the outcome of tomorrow's meeting. However, the latest gesture from Saudi oil minister signals that production cut is likely. The NYT's comment on the issue doesn't lack humour:

There is little doubt that gasoline prices in the United States, which are expected to reach a record this spring, are bringing renewed attention to OPEC's 11 members.

You bet!

* Meanwhile, in America, US senators urges Bush to pressure OPEC to increase oil output as a means to lower domestic gasoline prices. John Kerry did the same thing.

* The big news is that the White House thinks the market should set oil price, not OPEC. No kidding!

Darfur-related coup attempt 

Sudanese security forces have arrested military officers from the Darfur region and linked to the People's National Congress party:

Sudanese security forces have arrested 10 military officers who were plotting to overthrow the government, a high-ranking military official said yesterday. The official, who asked not to be named, told Reuters the officers were arrested on Sunday and were mostly from war-torn western Sudan. He said they all had sympathies to the opposition Popular Congress party, led by Islamist leader Hassan Al-Turabi. ... Turabi denied his party was involved in a coup bid but said his sources had told him around 27 officers had been arrested. The opposition leader is a former ally of Sudanese President Omar Hassan Bashir, who seized power in a 1989 military coup.

The peace talks over the Darfur crisis are to start today in Chad. Sudanese president Omar Bashir rejected the latest EU proposal requesting international human rights monitoring mission in Darfur. Without such monitoring, it's unlikely the ethnic cleansing in the region will stop.

Geopolitical social responsibility 

The set of events that took place last week in Tripoli (Libya) -- diplomatic handshake between Blair and Gaddafi, oil deal between Shell and Libya's National Oil Company -- is a striking example of the way oil links diplomacy (international oil politics), business (international oil business), and security (global war on terrorism). As such, the Libyan episode is the latest illustration of the rationale behind the ongoing new scramble for Africa -- "Going where the oil is" (pdf).

The dangers of such a scramble have been highlighted by NGO reports recently published by Global Witness and Transparency International. Interestingly, the reports put the blame on dictators (from Africa, Asia or Latin America) and Western oil companies. Next to nothing is said of the responsilibity of Western leaders and diplomats who acts as middle-men to their oilmen and promoters of their national energy security. They represent the third pary (national interest) in the dangerous liaisons between non-Western dictators and Western oilmen. The deal between Shell and Libya would be unthinkable without the handshake between Blair and Gaddafi. Charlotte Denny makes this point very clear in her story about the Transparency International's list of corrupted dictators:

Most of those on the list were protected by Western governments turning a blind eye to their criminal activities in exchange for support during the Cold War. ... Mobutu cleverly used the threat of an invasion from the then Marxist government of neighbouring Angola to quieten concerns in the West about his increasingly blatant looting from one of the most resource-rich countries in Africa.

What happened post 9/11 is that the war on terrorism has replaced the war on communism as the best convenient way to hunt for African oil. Global Witness and Transparency International have decided to ignore this very hot topic. We don't. However, it would be a mistake to think that corruption is limited to tropical dictators, western oilmen and leaders. The United Nations organization is being probed for the "oil for food" program after Claudia Rosett's investigation unveiled the case. The fact that Iraqi journalists were the first ones to break the story vindicates the view that local people are perfectly able to monitor their governments when given the means to do so.

US/UK African oil diplomacy 

Michael Meacher, former Britain's environment minister from 1997-2003, published an eye-opening article yesterday that sheds a vivid light on US/UK's oil politics in Africa and the war on terrorism:

So, "brave" Muammar Gaddafi has agreed on the importance of combating terrorism. A handshake with Tony Blair has sealed his re-entry into the international community. His compliance in opening up Libya to nuclear weapons inspectors has been spun as a major triumph in the "war on terrorism". The motives, however, are rather more cynical. An energy crisis is looming for Britain and the US. Libya produces high-quality, low-sulfur crude oil at very low cost (as low as $US1 ($1.3) a barrel in some fields), and holds 3 per cent of world oil reserves. It has vast proven natural gas reserves of 46 trillion cubic feet, but actual gas reserves are largely unexplored and estimated to total up to 70 trillion cubic feet. The problem of access to Libyan hydrocarbons was Gaddafi's record of running a state terrorist machine ... But none of the mutual hostility over the past two decades prevented a deal along these simple lines: we accept your acknowledgement of guilt over flight 103, you open up your WMD programs to inspection, and both of us can start benefiting from trading your oil again. The weakness of this deal as presented, however, is that it appears Libya didn't have any WMD, other than chemical weapons no longer likely to be useable.

Meacher then reveals that the Anglo-American support for the Kosovo Liberation Army (KLA) was a means to "to break Russia's monopoly over oil and gas transport routes and secure pro-Western governments in the strategic Black Sea-Caspian Sea oil-rich basin".

The US played a major role in creating and sustaining the mujahideen to fight the invading Soviet army in the Afghan war of 1979-92. Then from 1992-95 the Pentagon assisted the movement of thousands of Islamic fighters from central Asia to fight alongside Bosnian Muslims and remove the Milosevic barrier, and so extend US influence in a key area of oil geopolitics - a "pact with the devil", as Richard Holbrooke, America's former chief Balkans peace negotiator, put it. Before George Bush trumpets his dedication to his war on terrorism, he should reflect on his country's links with terrorism over the past decade where it has suited US interests.

Meacher shows that the US/UK quest for oil went hand in hand with Jihad. It's only after 9/11 that the war on terrorism became the main rationale for securing oil. As a matter of fact, Libya's entry into the anti-Jihad camp -- following other Arab petrostates such as Saudi Arabia -- is based on shared interests. There seems to be a kind of division of labor between the United States and the United Kindgom in the US/UK partnership for African oil. As for the role of Tony Blair, it became obvious when he shook hands with Gaddafi. According to Andrew Rawnsley, it proves that "only mad dogs and Englishmen go out in the midday sun":

Having resumed diplomatic links with Libya five years ago, Britain was the player best positioned - indeed, the only country so placed - to broker a bargain which needed the signatures of both Colonel Gadaffi and George W. Bush. This is a very British coup. In the eyes of the Prime Minister, this is also a quintessentially Blair coup: a vindication of his own approach to the world, a reassertion of his belief that Britain plays a pivotal role in global affairs. ... To the United States, the Libya deal makes the point that rogue regimes with ambitions to acquire WMD and histories of terrorist links can be dealt with by more than just military means. Intelligence and diplomacy are alternatives to fighting the menace with bombs and troops. The second term of Tony Blair's premiership has been heavily defined by war-war. War in Afghanistan, war in Iraq. The trip to Tripoli advertises his continuing belief in the vital place that should be accorded to jaw-jaw.

Convinced that "countries that trade together don't generally fight against each other", Patricia Hewitt -- Bretain's trade secratary -- said that trading in oil can help underpin co-operation against terrorism. She announced that British trade minister Mike O'Brien will be visiting Tripoli next month.

Reforming Africa's oil sector 

President Fradique de Menezes (Sao Tome and Principe), Finance Minister Ngozi Okonjo-Iweala (Nigeria) and Finance Minister Pedro de Morais (Angola) are discussing African oil today, in a forum sponsored by the Center for Strategic and International Studies (CSIS). General Charles Wald (EUCOM), Rep. Ed Royce (R-CA), member of the House International Committee and chairman of the Africa subcommittee will join other Africa and energy experts to discuss accountability and transparency in Africa's oil and gas industry.

CSIS will release two reports at the conference, including "Promoting Transparency in the African Oil Sector" focusing on US energy stakes in Africa.

Gen. Charles Wald will talk specifically on the last panel -- "How can the U.S. promote Stability and Security in the Oil Rich African Countries?" -- that (I guess) will probably deal more with Al Qaeda than with real West African threats such as military coups (Congo, Equatorial Guinea, Ivory Coast), lack of democracy and the unrest of young people inhibating oil rich regions in the south of Algeria and in the Warri region in Nigeria.

Monday, March 29, 2004

Oil [.biz] on monday 

* For China’s involvement with the Sudanese oil industry, the time for fake is now.

* Tullow Oil to take control of Energy Africa from South Africa.

* According to Hector Igbikiowubo, the appointment of Funsho Kupolokun as Group Managing Director of NNPC will trigger change at the Nigerian national oil company. A production sharing deal with Ocean Energy is already in the pipeline.

* Like other European firms (including Shell), Statoil is to invest in Libya’s oil and gas:

Libya's re-emergence as a place to do business looks well-timed for Western oil companies concerned about dwindling reserve levels. Like Iraq last year, it shows that on occasion politicians are not deaf to the necessity of driving through geo-political change to find more oil which will keep Western economies on the road.

* As for reserves concerns, Shell tries to shift blame on SEC.

* The Alien Tort Claims Act is transforming the United States into the place where human rights activists can sue oil firms for human rights abuse in Africa: Shell and ChevronTexaco are to feel the heat.

* All eyes will remain on Vienna this week.

Attempted coup in Congo  

After the attemped coup failed yesterday, it is quite difficult to know what really happened and who is behind the attacks.

Arab Leage summit postponed 

Andrew Borowiec gives us the behind-the-scene talks on the Arab League summit collapse.

Africa: the quizz 

My favourite US-based Indian humorist and stand-up comedian of the day knows how to tell this story.

Saturday, March 27, 2004

Fridayblog: no fun 

Being on the road, it was nearly impossible for me to follow conversations this week.

I was fortunate enough to spot the "joke" of the week. When I had time, I visited the 911-commission site. Very deep. Too bad there was next to nothing said about this.

Also of interest is the idea of Yoishi Funabshi. That was the best way to celebrate the anniversary of both Joi Ito's and James Moore's texts on digital democracy.

Friday, March 26, 2004

Full circle (part 2) 

Gathering petro-dollar storm 

As US gasoline prices at the pump hit the American consumer's pocket, the climate of fear and uncertainty leads to a growing panic in the US administration. Jeremy Rifking gives a good analysis of the petro-dollar mechanism at work both within OPEC countries and in the United States:

Get ready for what might become the economy's version of the perfect storm later this summer. The devastation could quickly spread to the UK and the rest of the world, with dire consequences for the global economy. The first hint of what might be in store came last month when Opec announced its decision to withdraw 1m barrels of crude oil a day from the market. Opec is worried about the weakening value of the dollar: it has lost one-third of its value in just under two years. Since Opec sells oil for dollars, the oil-producing countries are losing precious revenue as the value of the dollar continues to erode.

That doesn't look too good. It get worse when you reach his conclusion:

So we have all the conditions coming together to create the perfect economic storm: record oil prices triggering a restriction in US economic growth and an increase in the federal budget deficit, accompanied by further erosion in the value of the dollar - with increased budget deficits and the diminished value of the dollar leading in turn to higher interest rates to convince foreign investors to lend the US additional money, followed by a further retraction of the US economy as rising interest rates lead to a drop in domestic investment and consumption. The cascade of events touches off a tsunami that engulfs the rest of the global economy, submerging the world in deep recession.

A barrel at $40? That explains why all eyes stay focused on Vienna:

"We are meeting on March 31 and expect the cut to take effect the following day, but the timing for the practical impact has slipped. There is effectively a delay in the announcement of the cut," Daukoru added. Nigeria, where rickety refineries limit domestic crude consumption, is set to produce around 2.45 million barrels per day of crude next month, well above its 2-million-barrel-per-day OPEC quota. U.S. Energy Secretary Spencer Abraham told reporters the United States is talking with OPEC members about the group's production ahead of the cartel's meeting next week in Vienna. But he declined to elaborate, saying the policy of the administration was to keep the discussions private.

Between terror and reform 

Washington Times journalist Andrew Borowiec has written two stories about the Arab world that deserve attention: the latest article focuses on the forthcoming Arab League summit which will gather officials from 22 Arab states next week in Tunis. The previous story analyzed the state of the Union of Greater Maghreb countries (Libya, Tunisia, Algeria, Morocco and Mauritania). Both organizations are going through a deep crisis phase that hangs like a shadow over oil politics and terrorism in the Middle East and North Africa. The complexity of these intertwined problems make it unlikely for Arab statesmen to talk with one voice and agree on a common strategy -- be it in economy or foreign policy. Their powerlesness creates a void that is easily exploited by outside powers -- the EU as well as the US -- and non-states actors (Al Qaeda).

Thursday, March 25, 2004

Full Circle (part 1) 

This is the first episode of the story of Shell in Nigeria. It starts few months ago, in Berlin...

* 7 November 2003, Berlin (Germany): Transparency International (TI), an anti-corruption NGO, celebrates the tenth anniversary of its history.

Olusegun Obasanjo is invited to make a speech. As a founding member of the organization -- he has been Chairman of TI's Advisory Council for several years -- and the current President of Nigeria, he wants to takes the lead on oil industry revenue transparency. In his speech, entitled Nigeria: from pond of corruption to island of integrity(pdf), Obasanjo declares that his country would be publishing openly the revenues it receives from the oil industry. He's determined to implement the measures advocated by initiatives such as the UK government-led Extractive Industries Transparency Initiative (EITI) and Publish What You Pay. Towards the end of his speech, Obasanjo dares even criticize western companies operating in Nigeria:

As I hinted earlier... in this global war against corruption, no nation can carry on as an island unto itself. The international community must recognize the key role it ought to play in moving international businesses towards non-corrupt competition for markets and procurement in developing economies by developing global standards and providing the technical and where appropriate the financial support that some of the developing countries require to adequately respond to those standards.

I note with sadness, the involvement of some corporations from the developed world that have, even in recent times, been heavily involved in criminalizing our business cultures, compromising our policy makers, contaminating our institutions, and subverting our due process.

Chris Finlayson, Chairman of the Shell companies in Nigeria, is also in Berlin to attend the press conference. He welcomes the move. Both men, Obasanjo and Finlayson, know how much their relation matter to Nigeria and Shell: oil represents 90 percent of Nigeria's export revenues while Shell pumps about 50 percent of the oil produced in Nigeria. The company has been operating in the country for 60 years!

* 2 December 2003, Abuja (Germany): Commonwealth Business Forum, theme: “Achieving Sustainable Development – Challenges for Business and Governments”

It is about 10 a.m. when Chris Finlayson, who represents the first co-sponsor of the event (Shell) starts his speech: The business case for sustainable development: Shell experience. In the middle of his presentation, he declares that "issues of transparency and good governance" are "consistent with the principles of Sustainable Development" and need to be adressed. He adds:

We in Shell recognize that this should include revenues paid to governments. So we are supporting the Extractive Industries Transparency Initiative, which is working to convince governments to allow such disclosure. Not that the government of President Obasanjo needs convincing. Shell in Nigeria already reports the taxes and royalties we pay here, in line with the President’s commitment to revenue transparency.

Apparently, Finlayson (representing Shell) and Obasanjo (representing Nigeria) are on the same wavelength. The talk the same language, they have the same goals as far as the war for transparency is concerned.

However, an internal Shell document circulated 6 days later will change shed a new light on the relations between both men and their respective constituencies -- the transnational oil firm --, and the seventh biggest oil producer worlwide: Nigeria.

Next episode: tomorrow.

Ivory Coast, West Africa  

The clashes that took place today in Ivory Coast, as well as the talks at the UN Security Council vindicate some of the views expressed here last week by Stephen Ellis about the security landscape in West Africa: MOST OF THE UNDERLYING PROBLEMS STILL EXIST, AND THERE IS A PERMANENT RISK THAT HOSTILITIES WILL RECOMMENCE...

Misery around "Little America" 

Little America is the name given to the compound of ChevronTexaco's Angolan operations in the enclave of Cabinda -- Cabinda Gulf Oil Company (CABGOC). Protected by tough perimeter fencing and land mines, the compound is surrounded by families living in shanty housing whose members are forced to collect firewood for cooking as there are no supplies of kerosene nearby. As elsewhere in Africa, the inhabitants of the region where oil is pumped live in misery.

According to reports, repression by the Angolan army in this northern region (home to a separatist movement) is so violent that entire villages are being emptied; locals who fear for their lives are fleeing Cabinda.

The situation in Cabinda has been complicated by its vast oil reserves, both onshore and offshore. Locals say oil is the reason why the [Angolan] government wants to keep the province as part of the motherland, but they argue it has done little to benefit the lives of ordinary Cabindans. ... "We die here every single day because of the oil. We've already told the [ruling] MPLA [party], 'If what you want is oil, you can just build a pipeline from here to Luanda and pump all the oil you want. Just leave us alone'," said Cabindan journalist Raul Danda. "They say we want independence because of oil – that's not true. They are not leaving us alone because of oil – that's the real truth," he added. Father Congo agrees. "We've never benefited from it, so oil does not make any difference in the struggle. What's happened is that Cabindans have become victims of the oil - that's for sure," he said. ... "We need to benefit from the oil – it's ours. But, more importantly, we need to be recognised as human beings. I think the international community should put pressure on the MPLA regime - because that's what it is - to tell them to stop killing us, to start talking to us," Danda stressed.

Revenue Transparency & Energy Security 

The latest Global Witness report, Coming clean on oil, mining and gas revenues, focus on resources revenue mismanagement and misappropriation accross the globe. The five major examples include three African oil and gas producers: Congo Brazzaville, Angola and Equatorial Guinea.

In these countries, governments do not provide even basic information about their revenues from natural resources. Nor do oil, mining and gas companies publish any information about payments made to governments. Huge amounts of money are therefore not subject to any oversight and crooked elites can extract all sorts of ‘facilitation payments’ from firms that would probably prefer not to pay bribes. Investigations also reveal that some companies have played a willing role in facilitating off-the-books payments, misappropriation of state assets, and other nefarious activities such as arms shipments, as part of an anti-competitive, under-the-table method of winning business with unaccountable regimes. Ordinary citizens, who often own a country’s resources under its constitution, are thus left without the information to call their governments to account over the management of their revenues. The end result is a litany of corruption, social decay, increased poverty, reinforcement of authoritarian government and political unrest, which can ultimately lead to state failure and the spread of instability across regions.


Congo Brazzaville is one of the petro-states most closely associated with the legacy of influence peddling and dirty deals in Africa by the now-notorious French state oil company Elf Aquitaine (now Total). Elf treated Congo as its colony, buying off the ruling elite and helping it to mortgage the country’s future oil income in exchange for expensive loans. The company even financed both sides of the civil war, as it also did in Angola.

Although former senior Elf officials have been jailed in France for ‘misuse of company assets’, their legacy of opacity and hair-raising accounting endures. Despite huge existing debts and a supposed programme of cooperation with the international community to restructure Congo’s finances, the government has entered into ever more arcane and tortuous deals to avoid financial scrutiny from the international community and its own citizens. Indeed, the national oil company Société Nationale des Pétroles du Congo makes a multi-million dollar profit but, according to the IMF, does not pay a single penny of this money into the government’s coffers.

In Angola, new evidence from IMF documents and elsewhere confirm previous allegations made by Global Witness that over US$1 billion per year of the country’s oil revenues - about a quarter of the state’s yearly income - has gone unaccounted for since 1996. Meanwhile, one in four of Angola’s children die before the age of five and one million internally-displaced people remain dependent on international food aid. This report highlights the latest revelations from the ‘Angolagate’ scandal, in which political and business elites in France, Angola and elsewhere exploited the country’s civil war to siphon off oil revenues. Most recently, evidence has emerged in a Swiss investigation of millions of dollars being paid to President Dos Santos himself. The government continues to seek oil-backed loans at high rates of interest which are financed through opaque and unaccountable offshore structures. A major concern exists that Angola’s elite will now simply switch from wartime looting of state assets to profiteering from its reconstruction.

In Equatorial Guinea, oil companies appear keen to do business with the brutal regime of President Obiang Nguema. The country’s government has been tarnished by allegations of corruption, political violence, human rights abuses, and narcotics trafficking. Although the country’s oil boom has resulted in a dramatic increase in GDP, its living standards remain among the worst in Africa. This may be because much of the country’s oil money stays abroad: journalists have recently uncovered evidence that major US oil companies are paying revenues directly into an account under the president’s control at Riggs Bank in downtown Washington DC.

Corruption and secrecy are the main targets of the report which advocate new transparency policies and initiatives.

Oil curse & poor governance 

Michael Peel and Nicholas Shaxson published an interesting article in the Financial Times yesterday. They analyze events that took place in the last 12 months in three recent African oil states: Equatorial Guinea, Sao Tome, Mauritania.

In the past month, the dictatorship in Equatorial Guinea has claimed it was the target of a mercenary coup plot. In the neighbouring island state of São Tomé and Príncipe, the government - briefly overthrown last year by rebels who said oil was one of their reasons for acting - has narrowly avoided collapse over a controversial oil trading deal. In Mauritania excitement over imminent oil production is matched by instability. ... Equatorial Guinea is sub-Saharan Africa's third-largest oil producer, with an output running at more than 350,000 barrels a day. São Tomé and Príncipe is due soon to announce the results of an auction of blocks in a zone that is being developed jointly with Nigeria and has estimated reserves of billions of barrels. More than 800m barrels of reserves have been discovered after light exploration in Mauritania.

The authors argue that these three countries are following the same pattern already witnessed in two older African petro-states, Nigeria and Angola. After discussing the issue of corruption, Peel and Shaxson conclude on the virtues of transparency initiatives (UK government's Extractive Industries Transparency Initiative). Unfortunately, I'm afraid Nigeria's adoption of such initiatives have not produced the proper outcome yet. As for the Chad-Cameroon project, its monitoring mechanism didn't prevent President Idriss Deby to buy weapons with the royalties.

Blair, Gaddafi, WMD, terror & oil 

By now, you probably know that Blair is in Libya, shaking hands and chatting with his new buddy, Gaddafi. Here's a transcript of the conversation:

Muammar: You are looking good, you are still young.
Tony: It's good to be here at last after so many months.

Remember: Tony just arrived from Madrid where he was yesterday, mourning the victims of the Madrid bombings. Lockerbie seems very far now.

For many years Libya was effectively off-limits for British business, since it was under UN sanctions. Those sanctions were lifted after the Lockerbie admission. Now British companies, including Shell and the British aerospace firm BAE, have been looking for new business opportunities in the country. Libya has a large oil and gas industry that is still undeveloped, with plentiful reserves that are largely untapped. The country's proximity to European markets also makes it attractive to European concerns, who are eager to get into the country before American competitors do. On Thursday, Shell has said it signed a preliminary agreement with Libya for gas exploration rights. A spokesman for Blair told Reuters earlier that the deal was worth $200 million (€165 million) and possibly up to $1 billion (€823 million). BAE is talking with Libya about aviation projects, including possible aircraft sales. Tourism development is also under consideration for the sun-drenched, largely desert country. Reports say a British firm is negotiating permission to build a 500 hectare (1,235 acre) tourism complex, with a luxury marina, golf courses and fitness clubs.

Those who may be disgusted by such rabid commercialism have something to chew on: the war on terrorism.

Blair's spokesman said he and Gaddafi had "agreed on the need to unite together and to recognize the problems posed to the world by fundamentalism and what fundamentalism produces, which is terrorism and extremism." Foreign Minister Mohamed Abderrhmane Chalgam said Libya, like the West, opposed Osama bin Laden's al Qaeda network. "For us they are a real obstacle against our progress, against our security, against women...against any change in our region," he told reporters.

I'm afraid this only hides the biginning of the military cooperation program and economic sanctions lifting discussions already announced by Gaddafi's son, Saif al Islam, just before the top US envoy William Burns arrived in Tripoli on Tuesday. All these good news are the direct result of Gaddafi's decision to stop a WMD program that was more sideshow than substance. As we learned today in a NYT article by William Broad, a team of US scientists from the Institute for Science and International Security, based in Washington, said that such a program was far from posing an immediate threat to world peace - to say the least:

"The administration has distorted what was found in Libya, with the implication that it was very close to having a nuclear weapon"... After Libya publicly renounced its weapons program, the Bush administration and Britain tended to portray the project as large and aggressive, while the International Atomic Energy Agency said Libya was several years away from producing a nuclear weapon.

By the way, who really cares now? Oil has has been the key goal of all this scam: "A senior British government official said British business would gain from closer ties with oil-rich Libya", reports William Broad. Remember, we already knew that.

Wednesday, March 24, 2004

The face of US footprint 

In the wake of the recent revelations made by Richard Clarke about the Bush administration’s anti-terror policy, AOP brings you up to date about the US anti-terror strategy in Africa. In both cases, terror threats are hyped as a way to hide a specific political agenda. If re-election is the goal of the American presidential campaign, a long-lasting deployment in the heart of Africa is the aim of current US counter-terrorism activities on the continent.

Just like the global war on terror, this one is accompanied by a significant dose of exaggeration and deceit designed to focus attention on specific areas, while preventing questions about more straightforward issues such as human rights, democracy, transparency, corruption (remember Halliburton) and accountability in oil revenue management by US-backed dictatorial regimes such as Algeria, Mauritania, Niger, Chad or Nigeria. We don’t discuss the necessity for the United States to protect its oily interests in Africa: we just question the way such policy is marketed, transforming mainstream media and journalists into the echo chamber of a worldwide PR campaign.

There’s a consistent pattern in the way the US administration has been marketing its military deployment in Africa: it’s designed as a step-by-step program that tries to cure specific local African problems. This way, the program is made more sellable to the American citizen -- who might question such a steady return, in these times of change, into the “heart of darkness” (a decade after the Somali blunder). The message is very simple: the United States helps poor defenceless aids-stricken African countries with porous borders protect themselves (and the United States) against Al Qaeda. No African or American citizen would question such a move. And no one does, so far. This approach has the extra-advantage of preventing any discussion about the bigger picture:

* The US anti-terrorism strategy in Africa is run by military proconsuls like Gal. James Jones and his deputy Charles Wald. This follows a pattern first spotted by Dana Priest and recently described by Robert Kaplan.

* The object of the strategy is to increase the number of forward location bases on the continent: “I look at any place in Africa that has a runway or port that wants to be friends with the United States or we have a relationship with as a potential forward-operating location that we could temporarily use,” Wald says.

* The regional approach allows America to build a US-trained and equipped Pan-African army that share the same US counter-terrorism strategy, tactics methods and gear. Chad and Uganda are signs of things to come.

* Africa provides the United States with a new training ground for US special forces: The African soldiers are not the only ones to benefit from PSI. The SOCEUR [Special Operations Command Europe] forces are getting the opportunity to learn new cultures, terrain and languages that don't exist in Central Europe.

* The Pan Sahel Initiative helps transform formerly pro-French armies (Mali, Mauritania, Algeria, Niger, Chad) into pro-American forces.

Malabo coup: the French connection 

According to the confidential letter Africa Analysis, the regime in Equatorial Guinea thinks that the failed coup was not organized by Ely Calil. A western secret service (France) has supposedly masterminded the coup with the participation of a regional player (Gabon):

Although Zimbabwe has indicated that captured material prove the involvement of Spain, Britain and the US in the coup plot, Malabo authorities are wary of this. They reckon that there is a French connection, but they have yet to figure that out. Africa Analysis has been told that Moto has been funded by Gabon and by France and that had the coup succeeded the plotters would have gone to Libreville, Gabon, to meet him before taking power in Malabo. Apparently, the coup was initially planned to take place in February when Spain sent its naval ships into the area for exercises.

This new theory doesn't sound as far-fetched as it looks. Not only does France possess a rather impressive track record in the field of African coups, but the country's oil firm Elf and Gabon had good reason to seek regime change in Equatorial Guinea:

Gabon, whose oilfields are mainly operated by the French multinational TotalFinaElf, is a mature oil producer which is struggling to maintain its current output of 250,000 barrels per day. A diplomatic source familiar with the region said that France, the former colonial power, had in the past lent strong support to Gabon's claim to the disputed islands, which could hold the key to bolstering Gabon's falling reserves. Equatorial Guinea, on the other hand, only discovered oil in 1995 and is increasing its oil and gas production rapidly. It has already overtaken Gabon and is currently producing around 350,000 barrels per day. However, whereas France controls the oilfields Gabon, Equatorial Guinea's offshore oilfields are mostly operated by the US oil giants ExxonMobil, Amerada Hess and Marathon.

Should the allegations made by Africa Analysis be evidenced, the person most likely to be involved in the plot is Ali Bongo, the Gabonese defense minister and son of President Bongo.

About mercenaries & Taylor 

According to South African daily This Day, Charles Taylor was the real target of the mercenaries arrested in Zimbabwe. Hard to swallow, one day after the group appeared in court.

African anti-terror talks at EUCOM 

After East Africa and the Western Sahel, US anti-terror initiatives will soon reach North Africa. As already announced on March 8 by Gen. Charles Wald, military Leaders from West and North Africa are meeting US Commanders in Stuttgart (Germany), at the headquarters of the U.S. military's European Command, which oversees American military activities in most of Africa. The talks will mainly focus on cooperation in the global war on terrorism.

The first-ever North Africa, Pan-Sahel Chiefs of Defense meeting is taking place in Stuttgart, Germany, headquarters of the U.S. military's European Command, which oversees American military activities in most of Africa. According to a spokesperson for the European Command, the participants include senior military officials from Algeria, Chad, Mali, Mauritania, Morocco, Niger, Senegal and Tunisia. The U.S. side is led by General Charles Wald, deputy commander of the European Command and a frequent visitor to Africa. The talks, scheduled for Tuesday and Wednesday, are to focus on military cooperation in the global war on terrorism. Speaking to journalists earlier this month, General Wald said specific topics would include intelligence-sharing and the ability of forces to operate together effectively.

African anti-terror centers 

Anti-terrorism is fast becoming a hot commodity in Africa. It both helps give a new edge to old military regimes (Algeria) and a pro-American veneer to countries that used to be pro-French (Senegal) or pro-British (Kenya, Uganda). With US investments in anti-terror efforts, appetites grew around the continent. In less than two months, two important initiatives have been announced – one in Kenya and one in Algeria.

* Kenya became the first African country to host a national counter-terrorism center:

The United States, Kenya's biggest partner in the war against terror, has welcomed Kenya's initiative. The spokesman at the U.S. Embassy in Nairobi, Peter Claussen, says helping to ensure the success of the counter-terrorism center will be a priority for the embassy. "The president has promised aid for east Africa counter-terrorism assistance and the embassy is committed to making that promise good," said Mr. Claussen. "The counter-terrorism center will give us a good place to start."

* Algeria that will host the African Union terrorism research center:

The idea of the anti-terrorism center was first conceived at an inter-governmental meeting held in Algeria in 2002. There, ministers came up with the African Union Plan of Action for the Prevention and Combating of Terrorism, which included establishing a research and information center. Mr. Ewi [The African Union's anti-terrorism specialist] says the Algerian government has agreed to provide the center's infrastructure. Funding for the center is expected to come from the Africa Union's terrorism fund, as well as from donors, who are currently in negotiations with the organization.

Tuesday, March 23, 2004

Shell Nigeria: showdown likely 

Jeff Gerth and Stephen Labaton publish a follow-up to the revelations they made last week in the New York Times. This new piece comes amid news that Nigerian oil worker unions threaten to take action if Shell cuts their jobs.

On Thursday, AOP will publish a detailed account of the events that led to the current situation at Shell, from November 2003 to this day. It is a bizarre tale of business principles gone bad, involving such crusty issues as OPEC quotas, oil reserves classification, securities regulations, social unrest in the Niger Delta region. The story takes place at the crossroads of oil politics, regional security, corporate social responsibility and sustainable development. The main characters are Chris Finlayson -- the managing director of Shell Petroleum Development Company (Nigeria) --, Philip Watts, Shell's former chairman, President Olesugun Obasanjo, OPEC, SEC, and many more people.

Terror and the "caring problem" 

Every Tuesday, Ken Wiwa -- the son of writer and activist Ken Saro-Wiwa -- authors a weekly column in the Canadian daily, Globe And Mail. Ten days ago, he published a piece that I just can't get out of my mind: entitled Inequality and the calculus of terror, the op ed instantly became a silent companion of my meditations. Each time I started to write something about it, I ended up thinking about something else that was only loosely related. On the other hand, each time I stopped thinking about it, trying to focus on something entirely different, I ended up drawing links with Ken's article. In a way, it's just a collage of different themes: the relativity of the value of life, the way media executives select the content of their programs, Wole Soyinka's meditation on the origin of the war on terror, the bias of international justice, the difference between dying over Scotland and dying over African soil, etc. All these bits suddenly come together in the middle of the essay and in its final sentences:

If life and death, like currencies, would appear to have a differential monetary value across the world, then we are heading for trouble — because it is on this arbitrage in the value of life that terrorists speculate: They know the difference, if you like, between a dead Canadian and a dead Cambodian, and they know how to play that market. ... Whether we like it or not, this kind of aggression thrives because of the asymmetrical world we live in. Ours is a world in which the inequalities of wealth have been institutionalized, where the differences that should encourage creativity are routinely manipulated and exploited by those who peddle fear. Ours is a world where moral relativism is casually used to service and justify all kinds of inhuman agendas.

What I found most remarkable in the text is the way it dramatizes the "caring problem", theorized in emergent democracy debates by Joi Ito, and discussed by Ethan and other people (myself included): Ken Wiwa basically says that as long as compassion is evenly distributed and media agenda highly selective, prejudice will thrive and terror will rise. This is evidenced by the way the Darfur crisis -- "the world's greatest humanitarian crisis and possibly the world's greatest humanitarian catastrophe" -- is ignored by international media: our attention was focused on the Madrid bombings, then the Middle East, then something else that was ranked higher than the Darfur tragedy.

Bettina Ambach published an excellent account of the terror threat in Spain: in Spain's Muslims: Living on Society's Edge, she somehow echoes Wiwa's concern in the way she tries to understand how terrorism can be the effect of social inequatlity and humiliation:

Now people are asking themselves how a minority in the Muslim community could have become susceptible to Islamist propaganda. The disparities between Spain's Catholic and Muslim societies could provide some clues. A look at Ceuta, one of the two Spanish cities on the Moroccan Mediterranean coast, is revealing. Ceuta is the gateway to Europe. The border between Africa and Europe, between Islamic Morocco and Catholic Spain, is here. Half of Ceuta's 72,000 residents are Christian, while the other half are Muslim, mainly of Moroccan origin. ... The fact is, Ceuta's Muslim residents have dramatically lower standards of living and levels of education than Christian residents. They mainly live in the El Principe district, a poor, entirely Muslim neighborhood right on the border to Morocco, where integration doesn't exist. Young Muslims born in Spain to Moroccan parents live here. They don't feel Moroccan, but they aren't fully accepted by Spanish society either. Many fear the promises of the "real Islamic message" may be received with open arms in communities like Ceuta, creating the kind of dangerous backdrop that could breed future terrorism.

In a world where so many people live in society's edge, extending "the borders of our compassion" becomes a new moral as well as security imperative.

Collateral damage 

In terms of oil politics, a pipeline that is to carry gas from Egypt to Israel will be the first likely casuality of the assassination of Hamas leader Yassin. This is not the first time the project is jeopardized for political reasons:

The negotiations for the purchase of Egyptian gas, which began a decade ago, have experienced ups and downs, and were halted several times for political reasons. The parties were close to signing an agreement in 1999. The negotiators on the Egyptian side were British Petroleum (BP) and Italian energy company ENI, which own the Egyptian gas. The negotiations were broken off at the order of Egyptian President Hosni Mubarak, then renewed a year later. The new negotiator on the Egyptian side was EMG, which was given a franchise by the Egyptian government to export the gas, while BP and ENI were ousted from the negotiations. The new negotiations, which began in 2000, were again broken off by Egyptian when the intifada began. The negotiations were once again restarted in August 2003, after Prime Minister Ariel Sharon ordered the IEC to give priority to Egyptian gas over the Palestinian gas offered by Britsh Gas.

Libyan diplomatic dispatches 

Libya, Libya, Libya - the country has never seemed so attractive to diplomats and oil executives.

* The biggest news of the week is Blair's visit to Tripoli on Thursday, if we are to believe Saif al Islam - an we do. Military cooperation and sanctions will be high on the agenda.

* The announcement of Blair's visit came amid new assessments by analysts and diplomats of the motives behind Libya's decision to stop its weapons program. Diederik Vandewalle's account of the Origins and Parameters of Libya's Recent Actions confirm what AOP has written since December 2003:

Some have described Libya's recent shift as a reaction to Washington's muscle flexing during the Iraq war. In reality there is no direct link between the war and Libya's decisions. The back channel diplomacy that led to the denouement started almost two years before the Iraq war. It was initiated by British policy makers and only later did U.S. officials join. In a carefully orchestrated carrot-and-stick campaign that took place in several venues across the globe, Libya, Great Britain and the United States reached a consensus on a number of outstanding issues—including the 1988 Lockerbie bombing—that led to the breakthrough agreement on WMD. ... The pragmatism that the new technocrats [Shukri Ghanem et al.] have urged upon Qadhafi, concern over the economic and political toll of sanctions, and the need for international investment in the country's deteriorating oil infrastructure and in developing new oilfields slowly moved Libya to act upon western demands.

Stanfor scholar Thomas Gale Moore echoed the same idea, with a special reference to Clinton diplomat Martin Indyk:

In claiming to make the U.S. safer, President Bush has pointed to Muammar Gadaffi’s willingness to disarm as evidence that the war is producing peace. Martin Indyk, who as assistant secretary of state in 1999 opened negotiations with Libya, asserts that Gadaffi was trying to open up to the West and to the U.S. in particular well before the Iraq conflict. The war, he concludes, has nothing to do with Libya’s disarmament.

* Meanwhile, the French rush to Libya was heavily criticized by American writer Kenneth R. Timmerman:

No U.S. trade delegation can go to Libya until the Bush administration lifts U.S. sanctions on trade with the country. The French know that. ... "I would say this to the Americans: Don't let France beat us back into Libya," Republican Rep. Curt Weldon of Pennsylvania told me after he met with Colonel Kadafi in Sirte. "We will not take advantage of the Libyan people the way the French have." ... But America's voice cannot be heard if we are not present. It's time to press forward aggressively, to challenge the Libyans to meet our concerns, but also to reward Libya with trade and a visible U.S. diplomatic presence. One thing is sure: If we allow the French to set the boundaries for Libya's new relationship with the West, it won't be long before Colonel Kadafi is back to his old tricks.

Timmerman has become the most vocal French-basher in the United States. Having a book to sell may give him an extra motive to launch attack on Chirac and Villepin:

Americans need to remember that France is not a free-market economy, as we still are... When French businessmen go abroad, they often travel in delegations led by the prime minister, or the foreign minister, or some other top official. The French government gets involved not just in opening doors, but in negotiating contracts. Often, these contracts have involved substantial kickbacks to French political parties. Even today, French companies can declare as an expense on their income-tax declaration the bribes and commissions they pay to foreign agents. This was banned in the United States in the 1970s under the Foreign Corrupt Practices Act. This is one of the reasons the French like to do business with dictators. In a free and fair market, their companies can't always compete.

As far as Elf's dealings with African oil is concerned, he may have a point. But, what about Halliburton? In these matters, national politics seems to play a lesser role than corporations' social irresponsibility.

African oil seminar at ACSS  

The DoD financed Africa Center for Strategic Studies (ACSS) hold a seminar earlier this month that dealt with African oil issues:

Recognizing the growing potential for West Africa’s petroleum-producing countries to greatly enhance output and their share of U.S. imports in the coming years, a Brown Bag Seminar held on 9 March 2004 examined and analyzed strategic implications for Africa’s development prospects, as well as broader security implications in the region and beyond. ... Key policy conclusions of the speakers included: (a) the need for sustained commitment in African countries to use petroleum resources to benefit their citizenry; (b) the importance of corporate transparency, consistent with the framework developed by the “Publish What You Pay Campaign”; (c) the centrality of regional security; and (d) the role of capacity building in the crucial area of resource management.

Sound conclusions. Too bad it took them 9 days AFTER the conference to finally announce what happened. It wasn't even mentioned in their calendar. The next Sub-regional seminar is to take place in Cameroon (9-14 May 2004). What happens in the meantime will remain a mystery until the next press release.

PS: Among the guest speakers was Vincent Kern, the Department of Defense official who tried so hard last month to convince African military officials that "Africa has been, is now, and will be into the foreseeable future ripe for terrorists and acts of terrorism". This shows once more how terrorism and oil are intertwined topics in the US Africa policy.

Sudan: Bush wants peace now  

After sending his special envoy to Sudan with a plan of his own late last week, Bush phoned Sudanese leaders yesterday to tell them to hurry up and made interesting promises:

President Bush on Monday urged both sides in Sudan's 21-year civil war to reach a peace agreement, promising the country's president and the leader of the rebel forces that doing so would bring a new relationship with the United States. In separate phone conversations, Bush told Sudanese President Omar el-Bashir and John Garang of the Sudan People's Liberation Army ``to work with a sense of urgency to finalize an agreement,'' White House press secretary Scott McClellan said. ``The president indicated to both President Bashir and Dr. Garang that there were moments in history when leaders must rise to make a big difference for their countries. This is that moment for Sudan,'' McClellan said.

Such a gesture confirms at one thing: the guy wants the peace deal signed NOW, not later. More details in our previous post on the same topic.

Monday, March 22, 2004

Devon Energy's license offshore Nigeria 

The production sharing contract signed on March 19 covers block 242, offshore Nigeria.

Devon will operate the block with a 75 percent working interest. The Nigerian Petroleum Development Company Limited holds the remaining 25 percent working interest. The initial lease term of block 242 is five years. During that period Devon is committed to conduct a seismic survey and drill one exploratory well. A second five-year lease extension is optional. The company plans to solicit joint venture partners in block 242 and in block 256 that Devon also operates. ... With the addition of block 242, Devon has ownership in 12 exploratory blocks in West Africa, nine in deepwater. In addition to Nigeria, Devon holds leases in Angola, Equatorial Guinea, Gabon and Ghana. Devon is also an active oil and gas producer in West Africa, with production licenses in Cote d'Ivoire, Gabon and Equatorial Guinea. From these properties, Devon produces about 65,000 net equivalent barrels of oil per day.

LNG potential in Mauritania 

British Gas, Hardman and Woodside are upbeat after preliminary estimate -- 3 trillion cubic feet of recoverable gas -- on the offshore reserves at Banda.

"So, the Banda reserves are possibly already large enough for a stand-alone LNG development," Mr Ellyard said. "However, we're optimistic that substantially more gas reserves will be discovered in other prospects during the forthcoming drilling program. "Mauritania is well located for a short transport route to supply LNG to the east coast of USA and into Europe." If Banda is developed there is also likely to be a domestic market on the small African nation.

Through its private sector subsidiary IFC, the World Bank has already reviewed the project and may fund it. That would be the latest confirmation that the Bank ignores the recommendations of their own Extractive Industries Review's findings. Is this really a surprise?

China buys more African oil 

Africa is becoming the main target for China's oil buyers -China Petroleum & Chemical Corp., Sinopec Corp), with Angolan crude imports jumping 57 percent from levels recorded in January.

China is importing increasing amounts of crude oil from Africa, and in February Angola overtook Saudi Arabia and became its main supplier that month, customs data released Friday showed.

oil [.biz] on monday 

* Last week, high energy prices hit the stock market and threatened the US economy and are likely to stay high this week according to analysts - the Chinese included.

* OPEC keeps its options open before the March 31 meeting: all eyes will be on Vienna. Geopolitical uncertainties, like the assassination of Hamas leader Sheikh Yassin, will add to the volatility of the market. Saudi Arabia's concern with high prices may lead to a decision to postpone the output cut.

* With plans to cut jobs and squeez operations in Nigeria in mind, Shell directors will meet the Association of British of Insurers, which represents an important group of investors. The pressure to shed more executives and the possibility to downgrades reserves for a third time since January remain high on the agenda. We'll get back to the Nigerian side of the agenda later today.

* The international situation (OPEC, oil prices, Shell, oil reserves) generated much debates and declarations at the Offshore West Africa conference that took place last week in Abuja (Nigeria).

Sunday, March 21, 2004

Nile river states hydropolitics  

World Water Day will take place on Monday 22. It's the perfect time for us to focus attention on the Nile river dispute. The background of the dispute can be traced back to a controversial colonial-era treaty that gives Egypt control of the river. Ten countries are involved in the controversy: Kenya, Tanzania, Egypt, Uganda, Sudan, Burundi, Rwanda, Congo, Ethiopia, and Eritrea. A new treaty will soon be announced. Just like for other resources such as oil & gas, local communities -- through their MPs -- want to have their views heard. Given the importance and the location of the countries involved in the dispute, we will report future developments. You can find an account of the big picture here.

Saturday, March 20, 2004

Sudan: why Bush gets nervous? 

For the first time in the already 2-year long Sudanese peace process, US President George Bush intervened directly through his special envoy, John Danforth.

"President Bush has instructed me to express his concern that the longer this process drags out, the more possibilities there are for a real breakdown within Sudan," he said. "So he believes time is of the essence." Mr. Danforth said President Bush is required under U.S. law to report back to Congress on the progress of the peace talks, and whether or not the parties are negotiating in good faith. The president has until April 20 to do so.

The April 20 deadline is the official reason. The less official motive for speeding up the peace process is the US presidential election. Here are the five main reasons behind the presidential intervention:

* The situation on the ground is getting nastier by the day: an escalating fighting has started in the southern kingdom of Shilluk, and the deadly muslim-on-muslim war in the western region of the Darfur is ongoing. The situation there got so desperate that the crisis is now labeled "the worst humanitarian and human rights crisis", not unlike Rwanda. That's not a nice picture to show on CNN during a peace process that started before these clashes. But as time goes by, the pressure to include these new actors and their grievances into the deal under discussion will mount, threatening to bring to an end the already elusive US-led peace process (pdf).

* As far as Bush is concerned, that perspective would be a disaster. He desperately needs a win in his global war on terror, and the latest developments don't look good on the record: having Spain leave the coalition and pullout troops from Iraq one year later sends a very bad signal to the US voter who may think that the war on terror is being lost. Not a good thing at all for an incumbent who views himself as "the war president". Being a war president is fine if the war is being won. Being the president of a defeat is something else. Hyping Africa -- which is not the most pressing target on Al Qaeda's hit list -- as a the next front in the war on terror makes sense, given the Libyan decision to stop its so-called "WMD program" and the soon-to-be-declared peace in Sudan. Libya and Sudan have long been on the US list of rogue states and state sponsors of terrorism. Rightly so: in the case of Sudan, the regime once gave refuge to Ben Laden before he went back to Afghanistan.

* In case the "war president" image becomes too difficult to sustain in the campaign, Bush would like to project a more positive image: being a peacemaker in a conflict that lasted 25 years is not such a bad thing. The role of the United States in the peace process has been very important. Bush only makes clear to everyone that he keeps an eye on the prize. The Sudan Peace Act was an important step towards this.

* Last but not least, Bush needs to give something to chew on to three key constituencies: the oil lobby that finances his campaign and wants a share of the oil business in Sudan, the Christian fundamentalists who have pressed for such a peace in Sudan as a way to free the Sudanese christian population from muslim tyranny, and the African-American community that wants complete freedom autonomy for their African brothers enslaved by Arab rulers. Last year, Dansforth recognized the importance of the US christian lobby:

Most of the people in the United States who know about Sudan and who are interested in Sudan are American Christians. Many of these American Christians are conservative Christians. Their view is that the southerners are the aggrieved party and that the government has persecuted the south. That’s their view.

With so much at stake, it seems understandable that Bush wants to visit both Sudan and Libya as soon as the peace deal is signed. June is the most likely date. In the masterplan to designed to extend the US influence in Africa, the peace process in Sudan is just too important to ignore.

Friday, March 19, 2004

Fridayblog: big time trouble 

Let's start with something funny.

Once you've had enough fun, you can join this debate: Joi and others will discuss Creative Commons. If I ask you to join such discussions, it's mainly because I think blogging is an excellent way to test trends such as emergent democracy and collective deliberation. And if they matter so much to me, it's because they are the last hope to check some options -- like the war in Iraq -- which are decided by a small minory, though they impact everybody: As Blix writes about the decision to go to war:

It is an interesting notion that when a small minority has been rebuffed by a strong majority, it is the majority that has failed the test.

If we don't take care of these people, they'll take of us. Similarly, oil politics should be discussed by as many people as possible. That's why I thank those who allowed this blog to host interesting discussions you can't possible read elswhere, because some media executive have decided that these issues were not worth the while.

Most memorable discussions of the week were of course the ones with Arnaud de Borchgrave, Abiola and Stephen Ellis. I view this as a vindication of blogging’s ability to foster digital transparency. Beside its mere content, the point of the discussion with Arnaud is this: on the internet, especially with blogging, the sourcing of information through links is taken for granted, whereas journalism-as-we-know-it (and foreign policy analysis follows such a script) still relies on the fact that the writer can make allegations based on *secret* leads he gets from *insiders* without having to disclose them.

How are we to behave as responsible citizens and make informed decisions if we can't check the facts alleged? As a matter of fact, there’s a lot of things insiders send me in my inbox. The only reason why I don’t report all those leads is that you won’t be able to source them. I just don’t see the point of publishing information that can't be sourced. Kathryn agrees with me on this, and I think this rule should be followed by others -- non bloggers included. It's the best way to have genuine discussion and avoid the most obvious form of manipulation: eh, buddy, listen to that; I can't tell who's my source, but I assure you that... Please, don't assure me anything if I can't source what you say. Get lost! It's as simple as that.

My point with Abiola and Arnaud is this: I do understand the danger of terrorism, but I don't discuss the danger. I discuss some of the actions being taken in the name of such a danger when the facts alleged can't be sourced nor checked. Blogging levels the playing field in a way that makes the voice of authority less authoritative when that voice has nothing else to convey but "this is the truth, believe me I know what I'm talking about." We just don't live in that world anymore. And, that's the double truth - Ruth.

Do you remember last week’s fridayblog? Apparently, the messy times are here to stay. I wish I had more funny stuff to report, but I’m afraid this week has seen more of the dark side of AOP -- a futuristic film noir, similar to the cyberpunk novels. When I started reading strategy books back in 1990, I didn't expect being in a position where I would follow online -- realtime -- a strategic shift in the only superpower's attitude towards the international community's basket case: Africa.

Shell-Nigeria: how low can they go? 

Jeff Gerth and Stephen Labaton just published an explosive investigative report in the NYT. They have uncovered an internal Shell report that confirms the majority of our views on the company and oil politics in Nigeria. AOP will get back to this hot breaking news later today.

The Royal Dutch/Shell Group has kept secret important details of its sharp reduction in oil and gas reserves, particularly in Nigeria, for fear of damaging its business relationship with the government there and the Nigerians' desire to produce more oil, internal company documents show.

While Shell has acknowledged that the biggest adjustments in reserves include those in Nigeria, it continues to conceal the extent of its problems. But confidential documents from late last year show Shell concluded that more than 1.5 billion barrels, or 60 percent of its Nigerian reserves, did not meet accounting standards for "proven reserves."

The scale of the revision is important because Nigeria is a significant source of oil for Shell and the country is seeking to increase markedly its production quota within the Organization of the Petroleum Exporting Countries. The size of proven reserves is a basic consideration when OPEC sets quotas for its members. At stake for Nigeria are billions of dollars in revenue annually.

That's just a small part of the article. Once you'll read it you can search AOP and see what we wrote about Shell in January and February.

Thursday, March 18, 2004

Stephen Ellis speaks 

We discussed the current security landscape in West Africa with Stephen Ellis, the director of the International Crisis Group (ICG) Africa program. A historian by training, he has wide experience as an academic and a journalist. He is the former director of the African Studies Centre, Leiden, the Netherlands, and former editor of the well-known newsletter Africa Confidential. He currently co-edits African Affairs, the journal of the Royal African Society. He has written several books on African history and politics; the most recent is The Mask of Anarchy: the destruction of Liberia and the religious dimension of an African civil war (Hurst & Co., London, 1999). Worlds of Power, Religious Thought and Political Practice in Africa, the forthcoming book he has co-authored with Gerrie ter Haar, shows how religious and supernatural ideas dominate African politics and culture, how they shape the ways that Africans both rich and poor view the world.

In this email interview, Stephen Ellis expresses a significant dose of scepticism about the current situation in the region that contradicts other analysts rosy views. You can listen to his latest conference at RIAA (London) entitled An End to Africa's Wars? His scepticism extends far: he's not convinced by the current Pentagon's allegations about Al Qaeda's activities in West Africa. The interview thus usefully complements the discussion with Arnaud de Borchgrave.

[African Oil Politics]: How do you assess the current security outlook in West Africa, based on the ongoing UN peacekeeping missions in Sierra Leone, Liberia and Ivory Coast?

[Stephen Ellis]: International interventions have succeded in halting the wars in West Africa, at least temporarily. But most of the underlying problems still exist, and there is a permanent risk that hostilities will recommence or that a new conflict will emerge in another country, such as Guinea. West Africa remains a very dangerous region that will require intensive efforts, both regional and by the international community, for some time to come.

[African Oil Politics]: David Crane, the chief prosecutor at the UN's Special Court for Sierra Leone, declared recently on the BBC: "We know that, specifically up until last year, that there was a 10-year plan to take down Liberia, Sierra Leone, Cote d'Ivoire, then move to Guinea and then elsewhere as the situation developed. ... The 10-year plan was to put in surrogates who were beholden to Muammar Gaddafi." Do you agree with David Crane on this?

[Stephen Ellis]: David Crane is quite correct in saying that the Libyan government, and Col. Gaddafi personally, gave assistance to key actors in the West Africa's wars in the 1990s, notably Charles Taylor and other Liberian dissidents, and also the Revolutionary United Front in Sierra Leone. So too did other governments, such as that of Burkina Faso. The purpose of this support indeed seems to have been to encourage the emergence of a series of Pan-Africanist revolutionary governments. However I would be surprised if this strategy was ever sufficiently precise as to envisage a 10-years process. In practice, aid from Burkina Faso and Libya was used by political entrepreneurs in their own interests, and the wars in the region were caused as much by local tensions as by the Libyan intervention.

[African Oil Politics]: If, as US officials believe, Al Qaeda is operating in West Africa, is it thinkable that the same kind of "political entrepreneurs" might be working with the terrorist network for purely financial as well as (local) political rewards - as some did with Gaddafi?

[Stephen Ellis]: The link with Al-Qaeda remains somewhat unclear. My own impression, based on quite extensive research, is that Charles Taylor sold some diamonds to Al-Qaeda people, possibly without knowing who they were. All sorts of strange people buy diamonds. In general, the CIA is unconvinced of the connection, with the Pentagon and FBI being somewhat more believing. I do not believe any of the principals has any ideological connection to Al-Qaeda.

[African Oil Politics]: If David Crane is right, does it mean Gaddafi, Taylor and Compaore could be charged at the UN court in Sierra Leone?

[Stephen Ellis]: Gaddafi, Taylor and Compaore could all be charged by the prosecutor at the special court in Sierra Leone. However, it would be most difficult to bring them to justice. This is already apparent in the case of Charles Taylor, who is no longer a head of state but who remains at large.

[African Oil Politics]: What's your opinion on the current US quest for African oil and military anti-terror deployment in the Sahel (Mali, Mauritania...)?

[Stephen Ellis]: The US sees West Africa as a long-term strategic asset on account of its oil supplies. However, the deployment of US forces in the Sahel countries (the "Pan Sahel Initiative") is motivated more by fear of Islamic militants infiltrating the region from North Africa.

[African Oil Politics]: Do you think West Africa is witnessing a new (peaceful) security landscape or is it business as usual?

[Stephen Ellis]: I regret that peace in West Africa remains very fragile.

Arnaud de Borchgrave writes back 

This week, African Oil Politics published a post entitled Al Qaeda in W. Africa: hype as a 2nd language. The opinion piece was a reply to a commentary by Arnaud de Borchgrave (Al Qaeda in Africa) that's been widely circulated on the web. In the name of fairness, honesty and AOP's (digital) transparency agenda, a mail was sent to Arnaud de Borchagrave.

He reacted like a real gentleman -- what French people call a "grand messieur" -- and replied to AOP's mail. Here's a transcript of the conversation. Disclosure: 99 percent of the conversation is hear; you won't have to go through all the "dear sir", "regards" stuff. Once again, AOP thanks Arnaud de Borchgrave for playing fair. Let's hope the line of communication stays open; AOP values and enjoy such a frank conversation very much. As a matter of fact, you are invited to read the forthcoming interview with Stephen Ellis who can be viewed as the third member of this colletive assessment of West African security.

[Arnaud de Borchgrave]

I read with great interest your commentary. Thank you for e-mailing it otherwise I would not have seen it. As a foreign correspondent -- 30 years with Newsweek as Chief Foreign Correspondent -- I have been covering sub-Sahara Africa and North Africa on and off since 1952. My father-in-law was a U.S. Ambassador to several African countries. My wife was brought up in Libya until the age of six. I knew Senghor, Houphouet Boigny, Lumumba, Tshombe, Nkrumah, Sekou Toure, interviewed Ghadafi six times etcetera. I have good sources all over the African continent. And we keep in regular touch by telephone.

[African Oil Politics]

I know your reputation as well as your work and readyour commentaries quite often. Be assured that myintention is not to question your integrity as ajournalist and foreign policy analyst. Given the sensitive nature of the information you haveaccess to, I understand that it is (often) difficultfor you to make your sources available in a publishedcommentary. Since I don't have the same access to suchsources I can only use my brain and the publishedsources I can access online.I hope my piece didn't cause any irritation to you, as I respect and value your views. I would be glad to stay in touch. I would be more than honored to have you accept an interview on the topics discussed in the blog.

[Arnaud de Borchgrave]

Not irritated. Just astonished that some people don't seem to understand that Al Qaeda is shorthand for a much wider geopolitical phenomenon in the world. It is an ideology, just as implacably hostile to American and western values as Communism was during the Cold War. If I were living in abject poverty in sub-Sahara Africa and a marabou proselytized me I would want to become a jihadi volunteer for war against the infidels. This politico-religious ideology loves death as much as we love life. And that's why I said on FOX last night (Greta's Show) that we should be prepared for a struggule that will last just as long, if not longer, as the 45-year Cold War did.

[African Oil Politics]

I agree with the point you make about Al Qaeda's ideology and the threat such on organization -- that
declared war on the United States and its allies -- represents for US interests. I have no doubt about that. As a matter of fact, I didn't question that view: Al Qaeda's attacks, writings, audio and video tapes are known facts. I also understand that the organization will try to use soft spots in Africa as
safe havens.

What I don't understand is how "attractive" Al Qaeda's message can be in West Africa. I simply tried to say that -- so far -- the people likely to follow the organization's call are a minority. If you have heard of cases in West Africa involving marabous funded by Al Qeada (or islamist charities), spreading the message to their students (in Senegal, they are called "talibes"), and if some of these students have been found in Jihadi training camps (Afghanistan, Pakistan, Bosnia, Chechnya, Kossovo), I really would be glad to have some details.

In the last 12 months, I have listen carefully to EUCOM Commander Gen. James Jones, his deputy Gen.
Charles Wald, and EUCOM's director of plans and policy Gen. Jeffrey Kohler. I have also read the declaration made last month in the Africa Center for Strategic Studies by Paul Wolfowitz. I could name more names and dates and resources. All these distinguished people have said more than once that Al Qaeda's threat in Africa is real. But never was it possible to actually get facts, estimates that one can check. You are actually the first high level official who says: look, this is what's going on down there. This is what the marabous are doing. I give you credit for that and understand that you can't be TOO specific for obvious national security reasons.

(1) However, given the huge credibility gap between the current US administration and the rest of the
world, and given the Spanish PM's decision to pullout from Iraq, how can the United States expect some goodwill on allegations of Al Qaeda's presence in West Africa if no evidence is given? Should people in the
United States and Africa accept EUCOM and DoD's declarations as facts when no details are given?

(2) Let's assume that the threat is real, that some marabous are recruiting Jihadis in West Africa, is the
military approach the best (or the only) way to counter such a threat? My sources tell me that local governments allied to the US are using the war on terror as a way to get rid of and silence political oppositions. They think that the risk of a backlash is real in Mauritania and Kenya. What can we tell them?

(3) In my investigation -- on US energy security policy in Africa and the war on terrorism -- I realise
that some people in Africa (West as well as South) are starting to ask questions that I have summarized as follows: what's in it for us? In other words, what will they get if they side with the US-led coalition?
They say that what they see in Iraq, Turkey or Spain may happen to them. And they ask, why should we join the battle?

Mr. de Borchgrave, I know your long-time interest for Africa and your friendship with African heads of
state. I respect your professionalism and your experience. I would be very happy if you or any other
official at CSIS or in the administration can help me on this issue. We all know deep down in ourselves that US energy stakes are high in Africa. Adding the war on terror in such a mix can be quite explosive. I hope you understand my concern and will continue to help in my investigation.

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