Friday, April 30, 2004

Military clash between Chad & Sudan  

Obviously, what we feared most happened. Expect an analysis later this week-end.

Thursday, April 29, 2004

From Marrakech 

I'm in Marrakech now, at the 8th Africa oil & gas conference. I'll get back to you later. Here, it's 7:30 pm (GMT). Time to eat something: what about a Big Oil-sponsored dinner?

Tuesday, April 27, 2004

Algeria Unbound ? 

Walter Russell Mead wrote a personal account of his trip to Algeria. In his conclusion, he views North Africa (Algeria included) as a place where the United States is creating the right kind of anti-terror partnership:

As relations with Libya and Algeria improve, and with continuing close ties with Morocco, the United States has, despite the war in Iraq and tension between Israel and the Palestinians, been steadily working to create the kinds of partnerships and to press for the kinds of reforms that are so badly needed. In North Africa, and also across much of the Sahara, the United States is making real progress in building an effective coalition against terror.

Gaddafi in Brussels 

Last week saw the lifting of US economic sanctions towards Libya. Another historic date will take place in Brussels where Libyan leader Gaddfi will visit EU headquarters. While most Western media lists the Barcelona Process as the key issue of the visit to Romano Prodi, only Chinese Xinhua dares tell things like they are:

It is reported that during the visit, Gaddafi will sign several contracts on EU' investment in Libya's oil industry. Italy is a leading EU member spearheading the call to lift arms embargo against Libya so that it could sell military equipment such as helicopters, radar and night-vision goggles to the north African country. Since Libya is one of the jumping-off points for clandestine crossings by boatloads of illegal migrants heading to Europe, the EU is under pressure to offer help to Libya in its fighting against illegal immigration. Moreover, the two sides will discuss Libya's entry into the Euro-Mediterranean Partnership (Euromed), a political and security agreement between the EU and countries on the southern and easternrim of the Mediterranean.

Like the United States, the EU wants to integrate Libya to its new security architecture south of the continent.

Monday, April 26, 2004

Oil [.biz] on monday 

* Last week, Danish firm Maersk Oil was granted eight exploration licences for eight years by the Moroccan government off the southern Atlantic shores of Tarfaya:

The agreement provides for the acquisition of 2-D and 3-D seismic data and the carrying out of geologic studies to evaluate hydrocarbons potential in an area of 15,000 square kilometres. The "Tarfay Shallow" licences are part of the Moroccan office's strategy to encourage international oil companies to invest in the Kingdom's oil.

* Another Scandinavian company, Norsk Hydro -- from Norway -- signed a contract with Morocco to undertake studies on the Northwest Safi licence offshore Morocco: "The contract gives Norsk Hydro the opportunity to enter an exploration contract at a later stage."

* With 50 percent stake in bloc 01, ChevronTexaco became the operator of oil bloc 01, one of the nine oil blocks put on offer in the Joint Development Zone of the Gulf of Guinea being managed by Nigeria and Sao Tome and Principe. Another US major Exxon-Mobil was awarded 40 percent stake in the same bloc while a Norwegian company -- Equity Energy Resources (EER) -- got 9 percent equity interest under a joint operating agreement.

The award of the priced block is the highpoint of a six-month licensing process of nine offshore blocks which marks the first steps of the tiny island nation of Sao Tome and Principe into the world of big oil. ExxonMobil and little-known Environmental Remediation Holdings Corp had exercised pre-emptive rights to minority stakes in seven of the nine blocks, which the companies earned by doing preliminary exploration work for Sao Tome prior to the establishment of the joint authority in 2000. Exxonmobil took 40 percent in block one, while Texas-based ERHC, a subsidiary of Nigeria's privately-owned Chrome Energy, claimed a 30 percent option in block two, the second most sought-after acreage.

* After the killings of 2 US oil workers by armed youths, Chevron suspends its plans to resume oil production in the Benin River area.

The suspension will lead to further loss of 140,000 barrels per day of Nigeria's crude oil production, which in monetary terms will translate to a daily loss of $4.76 million revenue.

Saturday, April 24, 2004

Whose bias ? 

Reading reviews of NYT's Howard French book, A Continent for the Taking: The Tragedy and Hope of Africa, gave me some food for thought. I won't tell you what since I expect you to try the experiment:

First, check how he's reviewed in this own NYT, by Jeremy Harding.
Then, try Jim Rossi's review in the San Francisco Chronicle.
You're now ready to see what my friend Akwe's review in Allafrica said about the book.

G7, IMF, World Bank talks 

As high oil prices and terror were the main topics of the G7 finance ministers' meeting on Friday, the war on US deficit and global poverty took the back seat. The only thing expected from African representatives is to support the EU-nominated candidate for the top job at the World Bank. Is this an example of transparency and good governance?

US oil workers killed in Nigeria  

Gunmen attacked a boat carrying ChevronTexaco employees in the delta region, killing two Americans and at least three Nigerians.

Friday, April 23, 2004

Fridayblog: AOP on the move  

Just like Zapatero
I'm on my way to Morocco
Checking few links before I go

Zapatero to visit Morocco 

Before his departure on a visit intended to improve strained ties with Morocco, Spain's new PM, Jose Luis Rodriguez Zapatero called for "respect and dialogue".

Libya: US Lifts sanctions 

Major diplomatic combat operations have ended. We're entering a new era: the free democratic flow of Libya's oil to the United States. This time, no barel will be left behing:Mission accomplished!


The Energy Tug-of-War 

Our friends at SEEN has done a remarkable job -- once again. They released a new report yesterday ahead of the World Bank Spring Meetings in Washington: The Energy Tug-of-War: Winners and Losers in World Bank Fossil Fuel Finance (pdf) will likely gives some welcome fodder to the World Bank-commissioned Extractive Industries Review (EIR) recommendation that "The World Bank Group should phase out investments in oil production by 2008. The report exposes the leading beneficiaries of 133 financial packages, worth over $10.7 billion, approved by the World Bank Group since 1992.

Thursday, April 22, 2004

Angola, Libya, Sudan vs. Iraq 

As expected, US oil politics in Africa is already being heavily influenced by the situation in Iraq.

* As Exxon Mobil announces a new discovery in deepwater Angola, president Jose Eduardo dos Santos is to meet with George W Bush "next month to discuss oil and plans".

* As for Libya, it took only four months for people to witness what we announced back in December: In a potential boon to Texas energy companies, President Bush will allow trade with Libya, including the purchase of oil and natural gas. In reward for giving up something that didn't exist in the fist place: WMD.

* In Sudan, the government has been helping butcher the black population in Darfur for two years now. The Bush administration started only recently to pressure the government because the US-backed peace talks hits snag. In order to get a piece of the action in the Sudanese oil boom, the United States is ready to compromise.

Expect more compromise with other African oil states (Algeria, Nigeria) on issues of democracy and oil revenue transparency.

* The failure in Iraq helps African oilstatemen get their way with the US:

''The United States hoped that a year (after the start of the war), Iraqi output would exceed three million barrels a day of crude oil that it could purchase for 15 dollars a barrel'' ... ''the United States obtained a military victory but a political defeat, because all signs indicate that soon there will be neither abundant oil nor low prices -- and particularly not in Iraq,'' Víctor Poleo, another professor who specializes in the economy of oil, told IPS. ''International oil prices will be dictated by scarcity. What will abound are conflicts over oil,'' said Poleo. Nor has the purported military victory ''brought dividends for the United States in OPEC, which has not recognized the Iraqi Interim Governing Council and has given it only a voice but no vote in its meetings,'' said [Francisco Mieres, a Central University of Venezuela graduate school professor who specializes in the oil economy].


''Geopolitics by force has brought a cruel paradox,'' said Poleo. ''(Vice-President) Cheney and (Defense Secretary) Rumsfeld's soldiers, who are Halliburton soldiers, are destroying Iraq, and Halliburton engineers, who are Cheney-Rumsfeld engineers, are rebuilding it.''

Travelblog: Democrazy? 

* Reading Patrick Smith's latest story on the BBC, Africans crazy for democracy, I realised that some of Washington's new best friends in Africa -- Algeria, Angola, Nigeria, Libya -- were all tyrannies a decade ago. Most were military-based dictatorships. Nowadays, most African countries are ruled by civil regimes. Does it mean they are democratic? I doubt it, but Smith makes an interesting point about technology, information and politics:

Independent local radio stations have unleashed a torrent of political debate calling governments to account. Technology has helped too: mobile phones and mini-video cameras are now part of the armoury of election observers, who can quickly record and report abuses. As Africa gets wired to the internet, the rapid dissemination of news and argument is shaping political agendas.

However, Patrick is aware that when it comes "to real political power" the AK-47 rules supreme. But dash is a powerful weapon as well: "politics remains too often an expensive game with the spoils of office being shared between members of the same elite wearing different political colours. Economic uncertainties chip away at idealism and new style regimes find it easier to co-opt and corrupt rather than to bludgeon their opponents." Oil makes it very easy to co-op, corrupt and acquire AK-47.

* Realism leads western elites to find a modus vivendi with the so-called "new style remiges". The outcome of such shaddy intercourses is that local African elites and their friends from Global Inc. easily co-opt and corrupt each other. That describes quite well the phenemenon political scientist Jean-François Bayart call the "reciprocal assimiliation of elites". It's a key driver and consequence of globalization. Which brings us back to the African oil travelblog and our friend Chief Kolawole.

* In his first posting from Abuja, he shows how the administration works through a careful description of the people who manage the foreing journalists' clearing process at Radio House. He wants to know why it took so long before he got he got his visa application cleared: "they tell us that it's because of the changes, but don't say anything specific," he writes. He then asks a second question, this time about a free lance journalist for Fortune and The Economist who have been deported from Nigeria. This time, they have a very simple answer: the rules of immigration.

- But she was accredited, wasn't she?
- Yes but Forbes, not for The Economist

Protocol is a serious business in Nigeria, says Chief Kolawole. Not all the 4 agents (two ethnic Ibos, one Yoruba, one Haussa) and their female secretary are that stuborn.

Agent number 2 reads my passport ten times as a way to assert his position, agent 3 cheks the calendar to know how long we'll be allowed to freely do our job, except security zones of course. He's the youngest, the most efficient, he doesn't wear any ethnic sign, he wears civil servant clothes, and I wonder how long he will be proud of what he does. The others seem trapped in the bureaucratic routine... that turns this country into the most strictly bureaucracy-friendly country on planet earth. And that most people grease with dash (in order to get things done).

However, nobody specifically mentions bribe money. Chief Kolawole hopes the young civil servant will remain honest and will resist social pressure. He then goes describes the incredible city of Abuja. But his impressions on Abuja are more vivid in his latest posting.

* Entitled Abuja: miror and reality, the story wraps up the themes of globalization, nation building and democracy in a very original way.

Abuja is miror that reflects the image Nigeria would like to impress on investors. They are not naive. But they are not here to cry on the burden of a population that grew poorer than it was since my last tour around the country. They are here as a proof that Nigeria is the winner of the highest ROI (return on investment) contest. They are here to tell you that this country may have a civil regime, it will never be a democracy. They are here to tell you that, maybe, the transparency promised by the Obasanjo administration will be felt in the oil industry, but elsewhere, it will be business as usual. They are here to make money. Not humanitarian work.

The description of the city of Abuja, and the satellite towns surrounding it symbolises Nigeria's connection to the global system: on one side you've got oil, investment, images of nation building and unity, corruption, flashy buildings; on the other side, shanty towns without electricity nor water. Chief Kolawole then leaves the city. He's on his way to Kano.

AOP's Earth day song 

This is what you want?
This is what you get!
Hummer at home?
Humvee abroad!

"This is what the public wants and we give them what they want." (chorus)

Personel changes 

The U.S. Senate will soon hold hearings for several nominees for Africa-related policy positions.

Constance Berry Newman, who has been tapped by President Bush as assistant secretary of State for African Affairs, and Jendayi Frazer, who the President named as his ambassador to South Africa are both moving through the cumbersome clearance process.

Newman is currently the head of the Africa Bureau at the U.S. Agency for International Development and Frazer is the senior director for Africa at the National Security Council, the White House body that coordinates foreign policy for the president. Changes at the top have left the Africa Bureau at the State Department operating with one less senior official than usual, following the departure last October of Assistant Secretary Walter Kansteiner, who resigned to return to the private sector. His former principal deputy, Charles Snyder, who has had a long career as an Africanist in the Department, has been serving as acting assistant secretary, working with two deputies, rather than the allotted three - Pamela Bridgewater and Don Yamamoto.

Snyder's future role after Newman is confirmed remains unclear, and Bridgewater, who is responsible for the volatile West Africa region as well as the Bureau's public outreach, will leave in August to become diplomat in residence at Howard University.

At the White House, no successor for Jendayi Frazer has been named. Frazer and Meece are two of eight newly appointed ambassadors to Africa posts going through Senate confirmation. Others include nominees for Sierra Leone (Thomas Neil Hull, III), Swaziland (Lewis William Lucke), Gambia (Joseph D. Stafford, III), Cote d'Ivoire (Aubrey Hooks) and Cameroon and Equatorial Guinea (R. Niels Marquardt).

Eight additional U.S. ambassadorial posts in Africa will be filled over the summer.

Wednesday, April 21, 2004

African force 'R US  

What sounds like conspiracy theory few months ago when I started writing about the project now makes headlines in mainstream media: the Washington Post revealed the existence of a new Bush campaign called the Global Peace Operations Initiative. The plan is clearly designed to help the United States recruit foreign forces for peacekeeping missions:

Facing a chronic shortage of foreign troops for peacekeeping missions, President Bush has decided to launch an international drive to boost the supply of available forces -- a move that if successful could relieve some of the pressure on U.S. soldiers to join such operations, defense officials said. A plan approved by Bush earlier this month calls for the United States to commit about $660 million over the next five years to train, equip and provide logistical support to forces in nations willing to participate in peace operations.

* The plan: peacekeeping force, expeditionary army

One thing should be clear by now: Africa is the focus of this new plan. Although the continent will be the main theater of opeation of a the growing US-led, trained and equipped African force, you will see it keep the peace and do more elsewhere.

The campaign, known as the Global Peace Operations Initiative, will be aimed largely at Africa by expanding the peacekeeping skills of African forces and encouraging international military exercises in the region, where U.S. officials said much of the need exists. But African forces developed under the program could be used in peace operations anywhere in the world, officials said. ... The goal of Bush's initiative is to train about 75,000 additional foreign troops who could be deployed on short notice and perform a wide range of peacekeeping activities, including the most dangerous and demanding ones. (our emphasis)

* Bipartisan support

The plan, which will be announced soon by Bush, will likely receive broad bipartisan support because it grew also from initiatives that go back to the Clinton administration and blends together ideas from two think tanks as apart as the Brookings Institution and the Heritage Foundation.

In their October 2003 backgrounder, U.S. Military Assistance for Africa: A Better Solution, Heritage scholars James Jay Carafano and Nile Gardiner advocated the idea of a US support to the establishment of an "African intervention force".

More recently, Brookings' fellow Michael O'Hanlon wrote two articles on the issue this month. The first one was written with his colleague Susan Rice and proposed the United States help boost the AU's African Intervention Force. The latest piece is a longer essay written with Bookings' Private military expert Peter Singer. Entitled The Humanitarian Transformation: Expanding Global Intervention Capacity (pdf), the essay has just been published in the Spring 2004 issue of Survival. It constitutes the most comprehensive analysis of the issues at stake.

After reading O'Hanlon & Singer, you can go back to EUCOM's General Charles Wald speech at the American Enterprise Institute that outlines the vision, mission and goal of the plan: 5 battalions of 3000 troops each in each one of the 5 African regions (North, South, East, West, Center) makes a 75,000 strong highly trained, equipped and deployable African Force.

* La Force Noire, US-style: a cautionary tale

Make no mistake: what we are witnessing before our own eyes is the creation of an expeditionary force similar to what French Lt Colonel Charles Mangin called the "Black army" or the "Black force" that was to compensate the numerical deficit of the French army with respect to its German adversary. This time the enemy is not the German, but the Islamist terrorist. It's time to turn back to some old-school French colonial nostalgia (pdf):

A character of the writer Melchior de Vogüé says: « When you have finished the transformation of the metropolitan army into a national guard, we will give you an auxiliary army, and I can guarantee that it will make our European adversaries reflect. If you would consent to provide us the means, tomorrow we would put at your disposal 100,000, 200,000 unmatched soldiers, Senegalese, Sudanese, Haussa; bayonets that do not reason, do not forgive; obedient and barbarian forces that one will always need to win this barbarian and inescapable game: war »

Whether called a "spahi soudanais", a "milicien congolais", or a "tirailleur sénégalais", the black battalions created by Faidherbe in Senegal in 1857 were seen as civilization's new followers and defenders, the best outcome of the colonial undertaking. Tamed, trained and equipe, those African savages became civilized faithful soldiers --obedient, steadfast, cheerful than he!

In light of the benighted views on African wars described by Gary at Ocnus.net, The US Global Peace Operations Initiative is a good move forward. My fear is that it could prove just too good.

Oil plant attacked in Bayelsa 

As a new wave of violence erupts in the Warri region, armed youths in the remote Nigerian oil-producing state of Bayelsa have attacked an oil facility:

A police spokesman said five attackers were shot dead by security guards, and their boats and weapons confiscated. ... This is the second recent attempt at disrupting oil production in the area, where poverty and violence are endemic. ... Details are only now emerging of the attack, which took place over the weekend in remote mangrove swamps. ... It is still not clear what lay behind the attack. However, in the neglected Niger delta region, disgruntled youths who feel they have not benefited from Nigeria's vast oil wealth often kidnap expatriate oil workers or occupy rigs and flow stations in an attempt to extract money from oil companies.

Maybe President Obasanjo will ask Dr. Steve Azaiki, secretary to Bayelsa State Government, to help solve the latest oil-related crisis: Azaiki has just written a book, Inequities in Nigerian Politics, that was endorsed by President Obasanjo and that aims at "proffering far reaching solutions to lingering issues of resource control, youth restiveness and under-development in the Niger-Delta":

Speaking on the book, the author, Dr. Steve Azaiki, President of the World Environmental Movement for Africa, (WEMFA), said "The conflict of interest, economic and social problems in the oil producing communities, the unrelenting abuse of the ecosystem, and the insensitivity of the Nigerian establishment to the plight of the region and the need to right these wrongs have been the driving force behind the publication of this book." According to him, the book, "Inequities in Nigerian Politics", will among other things provide a veritable medium to showcase the Niger-Delta to the world and as such, command global sympathy which hopefully will help to sway government policies in favour of the people of the oil producing communities of the Niger-Delta"

Obasanjo who likes to bemoan the squandering of Nigeria's oil wealth has a unique opportunity to reverse the curse. The security outlook in Warri is a challenge as important as corruption.

Sudan: to close to call 

As the US election focuses more and more each day on the practical results of Bush's policies, the US administration is pressing for a quick conclusion to the peace talks in Sudan. The pressure can likely backfire:

The Sudanese government said Tuesday that the United States was hindering its negotiations to end the 20-year civil war with the southern rebels by raising the threat of sanctions.

The States Department denied such allegations, of course. Expect a full coverage here on Thursday. In the meantime, you can read Nonna Gorilovskaya's excellent background piece in Mother Jones.

Another "war" on terror is possible 

Last week, in an interview with Frida Berrigan, Karen Kwiatkowski outlined an alternative approach to counterterrorism. Let's do some cut and paste here:

The terror fight can be won using a combination of domestic policing/sleuthing, international policing/sleuthing, and certain changes in US policy that make us appear to be hypocritical and insensitive to the problems facing a large number of people, particularly in the Arab world. The article I linked to by Jeff Record lays out how terror can be reduced and fought. Winning the war on terror (there really is no such “war”) does not mean that terror tactics won’t ever be used in the future. It means that the reasons for such acts against the United States or her allies will be eliminated while the criminal funding of those who do the terror acts is reduced drastically. If we wished to start winning the war on terror, we would:

* Stop overtly and militarily supporting undemocratic and authoritarian governments (Saudi Arabia, Uzbekistan, Taliban before Nov 2001, corrupt and undemocratic African and north African governments) around the world. Divert those funds towards countries that reflect our own interests and values, or else reduce the national debt. This of course hurts American defense contractors who depend on government subsidies to sell weapons to our autocratic allies, and this corporate capitalism of sorts must be resolved.

* Address territorial defense and border issues more aggressively, and do so in conjunction with local national and international policing agencies. Share information, learn from countries that have dealt with terror successfully in their histories.

* Pay serious attention to resolving the Israel Palestinian issues by listening to the people in Israel and the people in Palestine — or else simply stop funding Israel and Egypt.

* Pull back our military presence globally, and voluntarily reduce our global military empire—starting with Iraq and Afghanistan.

* Ensure that the military is not sucked into more domestic or international police work (honor the Posse Comitatus Act). This is a side issue, but it is a subtle way to rein in domestic authoritarianism in our government and preserve democracy at home — which in turn reduces homegrown terrorism like the Murrah Building. Murrah is seen as a terror attack against the Federal Government as a result of the military assisted storming of Waco.

These are things that more and more Americans are starting to ask for anyway, as they become fatigued with the endless proclamations by the state about a war on abstract meaningless concepts (terror, drugs, illiteracy, etc) and as they realize Bush and the neoconservative worldview of American military hegemony has made the world more, not less, vulnerable to future major attacks.

Interestingly, both Bush and Kerry would disagree with her. I wish I were able to write a good line that would end with a rhyme in OR, like in Terminator, "war on terror", error...

Tuesday, April 20, 2004

Libya: the road ahead 

* Libya became the talk of the day when it became clear the United States will lift the economic sanctions very soon: the Financial Times had announced in the morning that the "United States aims to lift many economic sanctions on Libya soon, possibly this week, dramatically easing its embargo to allow U.S. firms to invest there and buy Libyan oil".

* Some journalists reported that the sanctions would be lifted on Wednesday; others said it would be Thursday. After hours of speculation, Reuters’ Alternet announced that Libya would “extend the deadline on ending U.S. sanctions”, thus confirming the idea that the US “aim” to lift the sanctions didn’t come out of the blue, but was the result of the deal between both countries; a deal already mentioned hours earlier by Libyan officials. Economy and Trade Minister Abdulgader Omar Elkhair had declared:

I expect it to be this month. I don't know when, but this is how it was planned. ... That's what we hear: lifting the sanctions will be during this month, but the decision is not the hands of Libya... We expect this to happen because Libya has fulfilled all its commitments. This was part of the negotiations and the deal between the United States.

Asked about the U.S. “intention” on the sanctions, Economy Minister Abdel-Qader Omar Belkheir made similar allegations to Reuters:

We welcome this and we expect this to happen because this is why Libya has done all these initiatives and all these efforts.

* That was a direct reference to the "Thursday deadline set under the agreement reached last year between Libya and the families of those killed when Pan Am Flight 103 was blown up over Lockerbie, Scotland, in 1988 by a Libyan-planted bomb.”

* However, given the nature of the sanctions and the fact that the declarations occurred during the “Tripoli Economic Forum: Doing Business in Libya", a majority of reports focused on the business opportunities offered by Libya and the reforms underway in the North African oil-rich country. According to the BBC, "UK firms jostle for Libya deals":

UK firms account for one-third of about 240 European companies attending a two-day conference in Tripoli on investment opportunities in Libya. ... The US could restore commercial relations with Libya within days. ... The main business opportunities for Western firms seeking to invest in Libya are thought to lie in oil and gas, as well as construction and tourism. British companies attending the conference in Tripoli include engineering contractor Balfour Beatty, construction firm Amec and defence giant BAE Systems.

* In order to know how much oil reserves lay offshore, Libya hired a French engineering firm :

Now Libya is hiring a French firm to see how much oil it has in its waters. The company, Compagnie Generale de Geophysique (CGG), has been contracted to start seismic surveys by June this year. CGG says that little work has been done to map the area in the past 20 years and says the first phase of its exploration will take at least a year as a result. The client for the work is Libya's National Oil Company.

* Aware that the competition for Libyan oil and gas will get tougher once the United States lift economic sanctions, other European countries emulate the British and the French. Norway sent an investment mission to Libya :

Representatives of Norway's government and state-held oil giants Statoil and Norsk Hydro will travel to Libya next week to examine investment opportunities in the North African country, the government said Friday. ... Norsk Hydro already has activities in Libya, while Statoil said at the end of March that it was mulling exploration and development possibilities. "The US companies will probably enter the Libyan market very quickly and it is important that the Norwegian companies position themselves while there are still opportunities," [said] Oystein Noreng, an oil industry expert at Oslo's School of Business. According to the Oil & Gas Journal, Norwegian companies will operate with guidelines laid down by Norwegian foreign policy.

* As for US oil companies, law firm Vinson & Elkins help them assess opportunities offered by Libya, while Forbes writes about the poor business climate that acts like the major obstacle to the development of Libya's economy :

Libya said on Tuesday it was seeking foreign investment after years of international isolation and said it would press ahead with sweeping reforms in the oil-rich country to liberalise its centralised economy. But foreigners working in Libya and would-be investors said at an investment conference in Tripoli that much needed to be done to streamline a creaking bureaucracy, improve transparency and renew out-of-date infrastructure to attract more funds. ... Business people complain of an opaque tendering process, a lack of independent arbitration in contractual disputes and red tape. They say Libya also needs to improve its communications system, including a shaky telephone network.

Will the competition for Libyan oil and gas turn to be a sprint or a marathon?

East Africa's exploration boom 

As Western mainstream media echoes peak oil fears more often than not, African oil gets more headlines. Feeling that the time has come to look beyond West Africa's usual suspects -- Nigeria, Angola and so on -- some journalists are wondering what's going on in East Africa. And they understand that the next big thing might just lie ahead, on the Indian Ocean cost:

Exploration firms are taking a fresh look at the Indian Ocean coast stretching from Madagascar to Kenya, hoping to defy conventional industry wisdom that says the region has some gas but little oil.
East Africa is likely to become one of the world’s hottest oil exploration frontiers in the next few years,” said Chris Matchette-Downes of JEBCO Seismic, which has reviewed geological data taken from east Africa’s coast. “I’ve seen a lot of evidence for oil,” he said. “I think we’re just beginning to see a realisation of that.”

Plans are already being made as to which markets will be best served by East African oil:

While west African fields are ideally placed to serve US markets across the Atlantic, explorers hope new finds in the east will meet ready demand from across the Indian Ocean, in Japan, India, Singapore and other parts of Asia. Royal Dutch/Shell is searching off Tanzania, Australia’s Woodside Petroleum off Kenya, and US-based Vanco Energy off Madagascar, while the Malaysian state oil firm Petronas is looking for offshore oil and gas in Mozambique. Sudan has been pumping growing quantities of oil for several years, and Canada’s Heritage Oil Corp. has drilled exploration wells in Lake Albert on the border between Uganda and the Democratic Republic of Congo.

The cool thing about East Africa is that exploration rights are really cheap:

The relatively low cost of exploration rights off east Africa has encouraged some firms to take a gamble -even if the risks of drawing a blank are high. In Kenya, Woodside is hoping to replicate its strike in deep waters off the west African country of Mauritania in 2001, an area which it says shares similar geology to its exploration zone off Kenya’s coast. “For less than five or six million dollars we’ve got access to an area offshore east Africa that’s about double what we’ve got in Mauritania,” said Woodside spokesman Rob Millhouse. “It’s a huge area where we can go and look, drill a hole if we like, and if we don’t like, walk away.”

Security concerns are even being reconsidered, probably because the most promising country in the region is Somalia:

Experts say huge finds might lie off the coast of anarchic Somalia - for anyone who dares to try.... Somalia may have perhaps the greatest potential offshore reserves, but it also the most challenging prospect - having fragmented into fiefdoms run by rival warlords since the overthrow of military ruler Siad Barre in 1991. But just as Woodside’s strike in Mauritania helped fuel interest in less fashionable exploration areas in West Africa like Liberia and Sierra Leone, experts say a find off east Africa could draw more risk-takers to an overlooked region.

Expect Somalia's stalled peace talks to resume very soon.

US-Angola: Dos Santos to meet Bush 

With oil prices and Arab anger on the rise, both fuelled (in part) by the war in Iraq and the situation in the Middle East, Bush needs all the friends he can get in the Gulf of Guinea. Angola is a good candidate. Expect a visit soon:

President Jose Eduardo dos Santos is to meet with US President George W. Bush next month to discuss oil and plans to hold Angola's first elections since the end of the civil war two years ago, a report said on Monday. ... The leaders are also to discuss energy, with Angola set to increase its output from 700 000 million barrels to one million barrels per day and keen to supply the United States, the weekly said. En route to the United States, Dos Santos will make a stop in the Atlantic Ocean archipelago of Cape Verde for talks with leaders there, added Pedro.

France-Libya oily ties 

After visiting the newly elected Algerian president Bouteflika last week -- a "rush" described as an indication of France's wish to counter "the growing influence of the Americans -- the North African country, French president Chirac welcomed Egyptian ruler Mubarak as well as Libya's Prime Minister Shukri Ghanem in Paris. According to Ghanem, Chirac will travel to Libya and visit Gaddafi "very soon": very soon":

Ghanim is on an official visit to France to relaunch cooperation in the political, cultural and economic fields between France and his oil-rich country. ... Ghanim signed Monday a number of agreements relating to tourism, training and scientific cooperation, and agreed Libya would pay a EUR 44.4 million (USD 52.8 million) debt owed to the French export-credit guarantee body Coface. He is accompanied by Abdallah al-Badri, president of the National Oil Corporation (NOC) and is due to meet representatives of the French oil company TotalElfFina and visit the Airbus aircraft factory at Toulouse in southwest France on Wednesday before returning to Libya.

The so-called French "Arab policy" looks as oily as ever.

Monday, April 19, 2004

Oil [.biz] on Monday 

* DiamondWorks Ltd. signed a memorandum of understanding with PetroChina International Ltd. that allows DiamondWorks' subsidiary Energem Petroleum Corp. to take part -- on a project-by-project basis --in joint ventures in Nigeria, Angola, Gabon, Central African Republic, Congo and elsewhere:

The memorandum of understanding with PetroChina, which reported a 2003 profit of $8.4 billion US, initially runs for 12 months. "PetroChina chose EP as its partner for exploration and production in African oilfields because of EP's access to and goodwill towards a number of African oil producing countries," DiamondWork said.

As it is used by word DiamondWork, the word "goodwill" probably refers to the company's shaddy relations with 1990's African warlords in Sierra Leone or Angola. Remember Executive Outcomes? With such deals, the Chinese make clear their intentions on African oil - by any means necessary.

* The Texas-based Nigerian-owned ERHC (Environmental Remediation Holdings Company), now a subsidiary of Chrome, has exercised rights in six oil exploration blocks on offer by Nigeria and Sao Tome Joint Development Zone (JDZ).

The Joint Development Authority (JDA) in charge of operating the JDZ began the licensing process for nine offshore blocks in the Gulf of Guinea last October, marking Sao Tome and Principe’s first steps into the world of big oil. ... The two countries will now hold a joint ministerial council, possibly as soon as next Thursday, to announce the final winners... In October’s bidding round, the highest bid was $123 million offered by ChevronTexaco for block one, so it is likely to develop that block jointly with Exxon. The second highest bid was for block two, where Nigerian dredging company, Foby Engineering, bid $113 million. Foby was also top bidder for block nine.

ERHC's decision was disclosed in a mandatory filing with the US Securities and Exchange Commission(SEC) dated April 13 in which ERHC exercised its preferential rights in the JDZ. Thank you to Gary at Ocnus.net for informing us not only on this issue but also on the seven NNPC managers sacked by Obansanjo: read on!

* NNPC sacks seven managers over alleged N14b fraud. The fraud was discovered by a panel set up by the NNPC whose goal was to look into the importation and distribution of petroleum products covering 1999 to 2003. "Those sacked are General Manager, Commercial of the Pipeline Products Marketing Company Limited (PPMC), Alhaji A.U. Sidi, Mr. John Akpan, Mrs. A.A. Sogunro, Mr. A.S. Okoye, Mr. R.A. Akinpelu, Mr. I. Dikko and Mr. H.M. Jamo."

The in-house committee headed by the Managing Director, Eleme Petrochemical Company Limited, Mr. Austin Oniwon had covered the fraud amounting to about $108 million arising from false claims on demurrage and falsification of bills of laden for fuel import into the country within the period under consideration. ... The idea behind the setting up of the committee was initiated by the former Group Managing Director of NNPC, Dr. Jackson Gaius-Obaseki, when it was discovered that the major oil marketing companies were highly indebted to NNPC in fuel distribution and lifting at the depots. Gaius-Obaseki then instituted the committee with specific order to look into the bills and invoices of all the major oil marketers as well as that of PPMC to ascertain the veracity of the claims. It was reported then that oil majors were owing the NNPC over N16 billion.

Let's use our AOP calculator: NNPC is owed [N14 billion by the managers + N16 billion by the oil companies =] N30 billion. What about the payback?

* The same question can be raised for TSKJ:

Nigerian Liquefied Natural Gas (NLNG) said on Monday it would give a $1 billion expansion contract to the TSKJ group despite a probe into that consortium for alleged bribery relating to an earlier contract. ... TSKJ comprises France's Technip ; Snamprogetti, a unit of Italy's Eni ; Kellogg Brown and Root, a unit of U.S.-based Halliburton; and Japan's JGC Corp. <1963.T>. … NLNG, which is controlled by state-run Nigerian National Petroleum Corp, Royal Dutch/Shell , Eni and Total , began exporting compressed gas in 1999 and now exports 9 million tonnes a year from three phases, or trains.

Talking about transparency is easy. Going on with business as usual is even easier. Especially when corruption doesn't hurt profits:

Nigeria and other stakeholders in the LNG project are set to reap the dividend of their investment as the company will, at its forthcoming AGM, declare a dividend of US$569 million. The high profile dividend confirm the faith in the LNG project as second to crude oil in revenue generation for the country.

How long will this go on? When crude oil will dry up in Nigerira?

* Or -- as happened with the battle for ownership of Pan Ocean -- when the death of a major shareholder in a firm dies, triggering the freezing of the company's account in a Zwitzerland-based French bank?

The battle for ownership of the company began in 1998 when Fabbri died and Fadeyi who was an employee and managing director of the company allegedly severed relationship with the family of late Fabbri and took over control of the company.

* The Shell memo shows that the liars sitting on the board of the company fooled the market for years. The scale of the fraud is massive. Which brings us back to the sacking of executives. In few years or months, or weeks, or days, we'll learn that other shaddy deals are being made as we speak.

Marrakech Oil & Gas Conference 

The the 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition will take place next week (April 26-30) in Marrakech (Morocco). The agenda (pdf) reads like a who's who of the African oil & gas industry.

This year, the focus will be on "cooperation for development of the continent´s energy industry as well as dealing with finance issues interfacing the energy development. Debates will cover all stages of the energy value chain including the downstream oil and gas industry. Our objectives are to facilitate the flow of information, know how and also share experiences that will contribute to the sustainable development of the continents energy resources."

The conference is co-organized by UNCTAD (United Nations Conference on Trade and Development), ONAREP (Office National de Recherches et d´Exploitation Pétrolière), and the ITE Group Plc (International Trade and Exhibitions). We'll try to get an accreditation to attend the conference and be your eyes and hears.

Shell CFO resigns 

Judy Boynton, Shell's chief financial, has resigned, becoming the third casualty of its reserves crisis.

While she is not accused of wrongdoing, her position became untenable following fierce investor criticism over mistakes made in the booking of oil reserves. The news emerged in a report on an internal probe into why the Anglo-Dutch group had inflated its reserves. The report also revealed the firm would be downgrading its oil and gas reserves for a third time in as many months.

Athough Judy Boynton step down as CFO, she will remain an employee of the oil company.

Travelblog: AOP goes Nigeria  

Today, African Oil Politics goes public with the first episode of a new film: the Travelblog. AOP will be travelling around the world through the eyes of travellers, consultants, citizen reporters, bloggers on the move. We start with Nigeria. Our good friend Chief Kolawole, aka Chief-No Compromise-Kolawole, will entertain us with his adventures in Nigeria. Since Chief Kolawole's travelblog is written in French, here's a brief presentation of his first posting:

Chief Kolawole is an independant journalist who lives in Paris (France). He had to wait 4 months before he got his visa clearance from Abuja (Nigeria). The delay could have been shorter if he had decided to travel as a tourist, but he wants to work in full transparency as a journalist. Hardened by his previous journeys to Nigeria -- this one will be the 9th --, Chief Kolawole now thinks like a Nigerian: he made his the Nigerian "Never give up". He doesn't think the delay has to do with his professional activity; he compares his situation with the burden of African immigrants in Europe.

Chief Kolawole is also involved with the music industry: he works on a CD compilation featuring music from the Gulf of Guinea, with a mix of old school and new school artists: Orlando Julius, Funkees, Bongo Ikwe, Fatai Rolling Dollar, Baba Fela, Lijadu Sisters, Blaise Amboley, Monkin, etc. He's aware that the CD will be pirated. He doesn't mind. He can't wait being in Nigeria... He's on his way. Stay tuned. Check the African Oil Travelblog.

Nigeria Oil & Gas 2004  

The 4th Nigeria Conference will be held today and tomorrow in Abuja.

The key theme of the Conference, which takes place on 19 and 20 April 2004, will be Investments into the Nigerian oil and gas industries, and the opportunities for national and international investing companies alike. The conference agenda will examine in particular the nature of partnerships between companies, with a special focus on investment in gas development.

The list of speakers include:

Olusegun Obasanjo, President of Nigeria GCFR
Edmund Daukoru, Presidential Adviser on Petroleum and Energy, Ministry of Petroleum Resources
Funsho Kupolokun, Group Managing Director, NNPC
Tajudeen Umar, Chairman, Nigeria - Sao Tome & Principe Joint Development Authority
Hugh D. Hollister, Agbami Subsurface Project Manager, ChevronTexaco Overseas Petroleum
Mark McCurley, Vice President - Natural Gas & Deepwater, Halliburton
Arne Tornkvist, Technical Director, Bergesen d.y. Offshore ASA
Doug Farmer, General Manager, Shell Gas & Power
Andrew Jamieson, Managing Director, Nigeria LNG Ltd

Friday, April 16, 2004

Fridayblog: BloggerCon! 

BloggerCon II is the place to be on Saturday 17th. Please check the schedule. The session led by Rebecca looks great to me. It'll be webcasted.

And, yes, blogs are here to stay!

As a matter of fact, expect some change on AOP this week-end.

Wednesday, April 14, 2004

Wald's speech at AEI 

EUCOM deputy commander General Charles Wald was the last keynote speaker at the American Enterprise Institute's Leave No Continent Behing conference, on April 13. In his closing speech to the last panel, U.S. Energy and Commodity Interests in Africa, he repeated some things that we already reported such as the Pan Sahel Initiatives. He also made interesting remarks on new themes that we will introduce here. You can access the rest of his declarations online (pdf).

* He rationalized EUCOM’s approach to Africa as follows:

Africa was never really a big part of the strategic plan for European Command or the United States of America. It was always there, but it wasn’t a strategic “there,” and we really didn’t recognize it. We kind of moved along down the road. ... And then September 11th all of a sudden we all had the wake-up call. (p.3)

* He said that there would be no separate headquarters or CINC for Africa, closing a debate that had been going on since at least 2000-2001:

The other issue was should there be a separate command for Africa? The answer is no, no, no, no, no, no. And the reason is we can’t set up a new headquarters. We already have a headquarters at European Command that does all of the [43 EUCOM African] countries... That’s fine. We can handle it. We’re big boys. (p.3)

That settles the issue, but they are still looking for a name that would be more appropriate than European Command.

* He stressed demographics and migration as the main security issue connecting Africa to Europe, living open the possibility for NATO to get more involved in Africa:

All of those people in Africa – because of demographics and other issues – are going to go right there into Europe. (p.4)

Europe is losing population, while African population is growing fast:

Demographics are what runs economies. ... So the question is, is that 800 million people in Africa today or 1.3 billion 20 years from now, is that going to be a curse or is it going to be a benefit for Europe? And I think it probably could be a benefit, but it’s got to be handled right.

The forthcoming Istanbul summit and the Caucasus African Clearinghouse conference will bring together the US and EU countries desiring to play a role in the new African security landscape.

* In the next 10 years, the United States will import more oil from Africa than from the Middle East: the US will import 30% of its oil from Africa, that Wald described as “the belt of instability”, focusing on the security of the Sahel region seen as a “belt of ungoverned space”. The question is, how to control that space. Antiterror partnerships are one kind of answers. Having African military cooperate is the way forward: South Africa and Angola taking care of Southern Africa, Nigeria and Ecowas taking care of West Africa, Pan Sahel countries cooperating together. Such an architecture would create 5 regional brigades in Africa, with 3000 troops in each region, trained (and sometimes equiped) by the United States of America and the EU. But Wald insists on one key point:

Africa’s problems are not going to be solved by the United States military. They can’t be. Africa’s problems are going to be solved by a unique different, creative, visionary approach to a continent that needs a lot of help. (p.10)

* With Iraq becoming the most important theater of operations, the US military won't be able to send troops to Africa. But NATO could:

We can’t afford to send troops to Africa, the United States can’t, any more than we had before. We’ve got too many things going on in the world. And, by the way, NATO and the rest of the world needs to help with this problem because it’s all connected. (p.13)

* The strategy remains one of influence through support, training and human capital: it's a cheap and effective diplomatic tool:

Now, once again, most of what we’re doing in Africa today does not cost a lot of resource. It doesn’t cost a lot of troops, it isn’t very expensive, it doesn’t take a lot of deployment time. It’s mostly intellectual capital, and advocacy, and proponency as far as participation and cooperation. (p.14)

African wars revisited 

Gary K. Busch, the editor at ocnus.net, wrote an important piece on African wars that challenges "established" (read often repeated) claims. According to Gary, African armies, especially in West Africa, don't have what it takes to fight inter-states wars: the state of roads, train connections and other transport links makes it difficult to conduct operations. On the other hand, although African wars are "expeditionary" in nature -- involving "bands and groups of often, irregular soldiers" -- such group usually lack the means to conduct "proper" expeditionary warfare: they rarely have the equipment required (aircrafts, helicopters, battlefield communications) and the pilots. The nature of African wars is thus very similar to what it was decades ago:

African warfare (with some exceptions like Angola) is largely carried out on the ground with machetes, bows and arrows and axes. It doesn’t start off that way but the pressures of logistic resupply often means that ammunition runs out, mortar shells are expended and the only thing left is traditional weapons. Food has to be foraged or stolen as resupply is not always regular or sufficient. This makes for a chaotic type of combat with heavy civilian casualties. Fighting up close and personal with a machete on a village by village basis is much more dangerous to a civilian concentration. ... The notion that ‘peacekeepers’ can change this is fanciful.

Having said that, Gary expresses criticizes UN peacekeeping missions for ignoring the nature of African warfare. Simply stated, such missions are not what Africa needs. It reminds me of 1990's military officials' rants on technology-centric RMA (revolution in military affairs) while al Qaeda's non conventional way of war was ignored. As long as UN or UA officials don't face the reality of African warfare, their peacekeeping missions will be met with a dose of scepticim:

There have only been two successful African peacekeeping initiatives. The first was when the Angolans went in to Congo (Brazzaville) and the second was the Angolan, Namibian and Zimbabwe fight to save the Congo from the invasion by Uganda and Rwanda. The Congolese War was won, at great sacrifice by Zimbabwe and its allies. The United Nations muscled its way in and ‘unwon’ the war with the introduction of MONUC. The French troops huddled around the centre of Ituri and never left the town. The first day they went out they lost several officers. They never ventured forth again. There still isn’t peace. The UN initiative in Sierra Leone was equally a farce. The first war had already been won by the application of force by the private army of Executive Outcomes, acting for the elected government. The UN and the ‘world community’ intervened and sent Executive Outcomes home. The war resumed and only the bravery of the Nigerian soldiers in ECOMOG and the Sierra Leonean Kamajors (bow and arrow hunters) saved the day.

In his conclusion, Gary sees positive development in the United States' growing military engagement in Africa:

The only positive development is the largely unmarked development of a U.S. military presence in Africa. There are new US bases in Eritrea, Mauritania and Morocco. There may soon be a naval base set up in Sao Tome. Special Forces troops are operating in sixteen countries in Africa; some doing training and others monitoring terrorists. This is clearly not part of the UN thrust or even less the creature of the NGOs. However, it adds real capability to African self-defence.

I partially agree with Gary on the fact that the US "adds real capability to African self-defense". However, as we are learning from the Iraqi experience, capability is only one part of the story: as long as the focus of such a presence is to fight a threat (terrorism) that is less widespread in Africa than current security risks, the new capability will be just that: a force looking for a mission. People who are currently dying in places such as Darfur (Sudan), Warri (Nigeria), Ituri (Congo) or Cabinda (Angola), are not being killed by al Qaeda. These are resource-based ethnic wars sometimes involving cross-border external partners.

Tuesday, April 13, 2004

Various dispatches 

* Angola has deported some 60,000 illiegal immigrants since December 2003, in a major crackdown on (mostly foreign) diamond diggers. Meanwhile, Indian oil company OVL buys Shell's stake in a field.

* China's oil demand forecast is bigger than predicted by the International Energy Agency:

In its monthly Oil Market Report the Paris-based agency revised up its estimate of incremental Chinese oil demand in the first quarter by 180,000 bpd to a record 6.14 million bpd, an 18 percent increase from the same period last year. "China's economy just keeps rolling and there is no imminent sign that it's going to stop," said Klaus Rehaag, head of the IEA's oil market division.

This increase will have major consequences on African oil:

Now the world's second biggest oil consumer, China competes with the United States and other major importers for a pool of available exports. China's imports from West Africa, a key area of consumer country competition have risen sharply this year. Chinese imports rocketed to a record 3.16 million bpd in February, up 280,000 bpd from January, the IEA said. ... North American oil demand is also rising strongly, led by gains in motor fuels. Consumption is expected to rise 300,000 bpd this year to 24.94 million bpd, the IEA said. With OPEC having just decided to implement tighter supply restrictions, consumer countries are increasingly reliant on non-OPEC exports, particularly from growth areas like West Africa and Russia. (our emphasis)

Expect more Chinese presence in Africa.

* A Californian court indicts ChevronTexaco in a human rights abuse case in Nigeria:

American oil giant, ChevronTexaco Corpora-tion may be held liable for the act of its subsidiary, Chevron Nigeria Limited (CNL) as a Federal Court in San Franscisco, United states of America has ruled that the oil conglomerate erred when it allowed its subsidiary to employ the services of armed Nigerian soldiers and Police to brutalise the natives of two oil bearing communities in the western Niger Delta. ... "In her ruling Judge Illston has given notice to Chevron and corporations like it that they cannot just take the money and run,leaving dead bodies and a ruined environment for others to clean up,"said Theresa Traber,the attorney who argued the case for the Nigerians.

* The oil reserves debate remains heated in the United States, with Federal regulators askind Chevron and Exxon to explain how exactly they book oil reserves. According to analyst Fadel Gheit, the issue is far from solved:

Fadel Gheit, an analyst for Oppenheimer & Co., said he believes that virtually all oil companies operating in Nigeria are under pressure from its government to exaggerate reserves, which the Organization of Petroleum Exporting Countries uses to help set production quotas. The more proved reserves a nation says it has, the higher its quota. "It is in an OPEC country's best interest to put pressure on the operators to motivate them to book more reserves," Gheit said. Gheit, who owns some ChevronTexaco shares, said he wouldn't be surprised if other companies besides Royal Dutch/Shell restate their proved worldwide reserve estimates. He cited El Paso Corp., the natural-gas company in Houston, which cut its reserves by 35 percent in February.

Monday, April 12, 2004

U.S. National Security Interests in Africa  

The Neocons go Africa: a conference on U.S. national security interests in Africa will take place at the American Enterprise Institute (AEI) on Tuesday 12 and Wed. 13. This moves is understable given that their Middle East policy is basically a failure. Let's hope they will be more open-minded when it comes to Africa. The three panel include:

Panel I: Islamic Fundamentalism, Terrorism, and Al Qaeda in Africa
Panel II: U.S. Strategic Engagement in Africa
Panel III: U.S. Energy and Commodity Interests in Africa

Leave No Continent Behind
U.S. National Security Interests in Africa

Start: Tuesday, April 13, 2004 9:00 AM

End: Tuesday, April 13, 2004 5:30 PM

Location: Wohlstetter Conference Center, Twelfth Floor, AEI
1150 Seventeenth Street, N.W., Washington, D.C. 20036
Directions to AEI

Online registration is closed for this event. Limited walk-ins may be accepted. Please call 202.862.5900 to check on the status of walk-in registrations.
Americans are not accustomed to thinking strategically about Africa, having long dismissed the continent as irrelevant to U.S. national security. Nonetheless, in the aftermath of the September 11 attacks, it is increasingly clear that the United States ignores Africa at its peril.

Al Qaeda and its allies have perpetrated attacks in a half dozen African countries from Kenya to Morocco, while the continent’s failed states and huge swaths of ungoverned territory offer sanctuary to terrorist groups. In addition, Africa’s large Muslim population shows disturbing signs of radicalization, with the adoption of Islamic Sharia law in northern Nigeria and the spread of Saudi-funded fundamentalism elsewhere in the region. All this comes as America is growing increasingly reliant on African oil, which already accounts for 15 percent of U.S. imports and is expected to become even more important in the decade ahead.

Is Africa America’s blind spot in the global war on terror? How significant is the danger of al Qaeda and Islamic extremism there? How is the Pentagon, which has quietly dispatched 1,800 troops to combat terrorism in the Horn of Africa since late 2002, adapting to meet this threat? How will access to Africa’s vast natural resource wealth affect the global balance of power in the twenty-first century? Can African oil and gas reserves save the United States from dependence on the Middle East?

Sunday, April 11, 2004

Riggs' probe & Equatorial Guinea 

Ken Silverstein gives some new details on the links between the ruling family in Equatorial Guinea and Simon Kareri, a senior executive at Riggs overseeing Africa accounts. You'll find the original LA Times article on ocnus.net.

Equatorial Guinea's largest account with Riggs held hundreds of millions of dollars in oil earnings deposited by American companies active in the country, primarily ExxonMobil Corp. and Amerada Hess Corp. Although formally a state account, it is in effect controlled by Obiang, said multiple sources interviewed by The Times. Collectively, U.S. oil companies have invested about $5 billion in the nation's oil industry. (...)

Three sources familiar with the investigation said Obiang also had personal accounts at Riggs amounting to more than $10 million. Real estate records show that the bank helped Obiang purchase two homes in Maryland, including a $2.6-million mansion that was bought for cash in 1999.

Sources also confirmed that Riggs held accounts for Teodoro Biyogo Nsue, Equatorial Guinea's ambassador to the U.S. and Obiang's brother-in-law, and for Obiang's son, Teodorin Nguema Obiang.

The latter is a government minister but spends little time in the country. Housing and business records show that the son owns a $6-million home in Los Angeles as well as a music company in L.A. called TNO.

Armengol Ondo Nguema, Obiang's brother and the country's feared security chieftain, also held a personal account at Riggs. In correspondence obtained by The Times, Kareri referred to Nguema -- who is accused in U.S. State Department reports of employing torture -- as a "valued customer."

The federal grand jury, which was convened in mid-February, is closely examining Kareri's activities. In 1994, Riggs hired him to handle embassy banking for Africa. Kareri also offered private-banking services for wealthy investors.

Kareri brought the Equatorial Guinea government account to Riggs, and it became one of the bank's biggest depositors. In 2001, Kareri was promoted to senior vice president.

Kareri is close to Obiang and his family. Records show that he is also a board member of the U.S.-based Foundation of the Friends of Equatorial Guinea and the United States, whose aim is to promote stronger ties between the two countries. Other board members of the group include Equatorial Guinea's representative to the International Monetary Fund and the country's minister of justice.

Sources told The Times that Riggs' demand that Equatorial Guinea withdraw its funds reportedly occurred after a tense meeting in Washington among bank officials, Obiang, the FBI and several government representatives. An FBI official said the agency could not comment on an ongoing investigation.

Timothy O'Brien NYT article sheds more light on the relations between Riggs and Obiang's bank account:

Mr. Kareri, the Riggs executive overseeing all of the Equatorial Guinea accounts at the time, told the bank's own investigators last September that money in the Otong account had come from overseas accounts that Mr. Obiang had closed - an explanation that Riggs and federal investigators have found unsatisfactory. Federal officials are looking into the possibility that Otong funds were used to bribe employees of American companies or involved the proceeds of political graft.

In January, matters became worse. Riggs investigators discovered that Mr. Kareri approached Mr. Obiang's son in Washington last year and solicited money to buy a car, according to three people with direct knowledge of the event. Mr. Obiang's son gave Mr. Kareri an undated, signed $40,000 check with no payee designated, these people said. Mr. Kareri, they said, then altered the check to change its value to $140,000, wrote a friend's name on the payee line, and then maneuvered to have the funds redirected to his wife.

Mr. Kareri was questioned about the transaction in January, suspended and then fired a few weeks later. A grand jury has been convened to weigh fraud evidence against him. He could not be reached for comment.

DURING the bank's investigation of Mr. Kareri, Riggs officials discovered that some funds from Equatorial Guinea's oil accounts at Riggs were transmitted to Luxembourg and the Canary Islands, suggesting that money was being diverted for questionable reasons. They contacted Mr. Obiang in Equatorial Guinea, and he traveled to Washington in February to meet with them. After being questioned further, he refused to discuss the matter, according to people with direct knowledge of the meeting.

Riggs closed all of Equatorial Guinea's accounts at the bank shortly thereafter, but not soon enough for regulators disenchanted with the bank's vulnerabilities.

Investigations by the US grand jury and Senate into whether corruption is involved in accounts controlled by Equatorial Guinea are ongoing.

Easter news in Nigeria 

While the peace talks between Christians and Muslims are not going quite well, Obasanjo's Easter PR on democracy gives some credit to those who are concerned by the security dilemma that confronts the country.

Friday, April 09, 2004

Fridayblog: beyond Suez 

This week, Queen Elizabeth paid a state visit to France to mark the 100th anniversary of the "entente cordiale", an agreement that was meant to ease the colonial rivalry between The UK and France. Such a celebration sounds weird to me: the last time both countries decided to fight a colonial war against a common African enemy -- Nasser's Egypt -- was a disaster. The Suez Crisis (1956), which was supposed to bring back the Canal under British-French control, marked the end of the decline of both colonial empires, East and South of Suez. After the Crisis, France decided to become a European player with its own WMD program whereas the UK decided to sacrifice everything to the "special relationship" with the United States. Here's how Daniel Yergin analyses the British decision in The Prize, the epic quest for oil, money & power:

Suez was a watershed for Britain. It was to cause as severe a rupture in British culture as in that nation's politics and its international position. Yet Suez did not presage Britain's decline; rather, it made obvious what had already come to pass. Britain no longer belonged to the top echelon of world powers.

That gives an interesting perspetive on the Bush-Blair coalition. The will to power sometimes lead to blunders whose magnitude one understand only years later. Harold Macmillan, the British Chancellor of the Exchequer in 1956, wrote something about Suez in his Diaries that may be said about Iraq today:

The truth is that we are caught in a terrible dilemma. ... If we take strong action against Egypt, and as a result the Canal is closed, the pipelines to the Levant are cut, the Persian Gulf revolts and oil production is stopped - then U.K. and Western Europe have "had it." ... If we suffer a diplomatic defeat... we have equally "had it". What then are we to do? It seems clear to me that we should take the only chance we have - to take strong action, and hope that thereby our friends in the Middle East will stand, our enemies fall, and the oil will be saved, but it is a tremendous decision.

That's what Bush and Blair call "staying the course". It means: we have no exit strategy: we are caught in a double bind. We can't stay; we can't leave. We are doomed. As for France, Suez made more severe the "memoire jaune" syndrome.

What about the Suez Canal? It's doing fine, thank you.

World Bank's oily projects 

The battle between those who want the World Bank to adopt or reject the EIR recommendations is ongoing. The Bank's mission is to fight poverty, but it invests in oil and gas project that harm the environment and create more poverty. Emad Mekay wrote two stories that help us understand that the pressure towards more transparency and accountability is getting stronger. The first story reports how the adoption by the U.S. Congress of measures that provide more oversight of international lending bodies like the World Bank won praise from critics of the institutions.

The reforms, passed by Congress in January, are designed to combat corruption and conflict of interest at agencies including the World Bank and the Inter-American Development Bank (IDB), collectively known as multilateral development banks (MDBs). With the changes to the Consolidated Appropriations Act, the Secretary of the Treasury, whose department oversees MDBs, is now required to report to Congress on the agencies' progress in improving transparency and accountability, through such measures as publicly revealing details of the conditions tied to each loan and strategy they implement. The secretary's first report to Congress is due in September.

The second story reveals more of the dark side:

According to a leaked letter sent to World Bank President James Wolfensohn ... several investment banks that lend for such projects want the World Bank to reject the findings of the Extractive Industries Review (EIR), an effort to assess the bank's heavily criticised support for mining and energy projects. The EIR submitted its final report to the World Bank on Jan. 16, urging the world's largest public lender to stop funding extractive industries like coal and oil by 2008, and to shift its investments to cleaner renewable energy instead.

Forming what is called the Equator Principles group -- which include world names like ABN AMRO, Barclays, Citigroup, Crédit Lyonnais, Credit Suisse Group, Dresdner Bank and Royal Bank of Canada --, the banks are collectively responsible for $54 billion worth of financing for oil and gas projects in 2003, sometimes co-finance projects with the World Bank. In their letter, the Equator banks argue that a project like the Chad-Cameroon pipeline is an exemplary model for development. These people have decided to ignore an article published last month by Korinna Horta and Delphine Djiraibe: in Africa's Dangerous Treasure, they show that the Chad's project has created "serious problems" and already raises some legitimate concern that are to be found in a more recent article:

For Gilbert Maoundondji, a prominent human rights activist, the greater concern is Chad's lack of democracy. In 2000, President Deby spent $5 million of an early oil bonus on weapons that might have served him well in his desire to hold on to power. "We're likely to fall into the vicious cycle of wars and rebellions," Maoundondji said. "I am really worried about this issue."

The lack of democracy and transparency in Africa sometimes mirrors how international lenders work.

US Congress to sue OPEC? 

High gasoline prices are driving US senators nuts:

Suing OPEC is one option Congress is considering to reduce gas prices. Other approaches include a stalled Senate energy bill and possible investigations by the Federal Trade Commission of alleged price-fixing by domestic oil companies. It remains unclear whether the United States could or would sue OPEC, a cartel made up mainly of foreign-government entities.

Handover of oil-rich Bakassi 

The joint commission Nigeria-Cameroon has announced yesterday that the withdrawal and transfer of authority from Nigeria to Cameroon would take place between July 15 and September 15.

The handover of the Bakassi peninsula, ordered by the International Court of Justice in 2002 as part of a general ruling on the two countries' common border, was delayed after the last round of bilateral talks in February. ... A previous plan had called for Nigeria to pull out troops and administrators in April and May. Nigerian politicians have distanced themselves from previously agreed timetables and Cameroon is likely to be watching closely whether they are ready to adhere to this one.

Thursday, April 08, 2004

African borders reconsidered 

There are two kinds of established wisdom on African borders:

* The security approach views African borders as "porous", "ungoverned". This view has been used over and over again for months now as the main rationale behind the Pan Sahel Initiative: "Under the Pan Sahel Initiative, the U.S. provides training and equipment to the security forces of Mauritania, Chad, Niger, and Mali so they can better police their own borders." This first view is widespread within foreign policy, global security and anti-terrorist think tanks.

* Then you've got the free market approach that views African borders as too strictly controlled. This approach was illustrated this week at Washington free market think tank, the Cato Institute, by George Ayittey -- a professor in American University's economics department -- and June Arunga -- a young African law student and film maker. Unlike most US foreign policy gurus, both George and June were born in Africa. Here's what they have to say:

George Ayittey ... noted that today's African leaders "all condemn the artificial colonial borders, yet they have been very vigorous and aggressive in enforcing these borders. Why? Because they use these borders to collect revenue." "In traditional Africa," he said, "there weren't these impediments. There was free flow of goods and people across Africa. Pre-colonial Africa was full of free trade routes -- the trans-Saharan route was one notable example. "Timbuktu, for example, was one great big market town.

Here's the AOP's question of the day: which approach is true?
a) The security approach?
b) The free market approach?
c) Both?
d) None of the above?

Suppose we select the most challenging option (c), how can we reconcile security geeks and market freaks? Here's one elegant solution: African borders are very strictly controlled so as to hinder free market while favoring terrorism and organized crime. Ain't it good news? What this actually means is that the system works for the bad guys against the good guys. How such a system can work? Very easily: suppose those who are to enforce security -- the so-called security forces -- actually work for or with the bad guys. In a system where corruption is widespread at the leadership level, how can you expect the keeper of the border to behave more ethically than his masters? This may sound crazy to Washington think tankers, but said earlier option c is quite challenging. Your comments are welcome.

Darfur: new ceasefire agreed 

The news came today, around 24 hours after US President Bush had asked Sudan to control militias and grant access to aid agencies:

THE Sudanese government and rebels from the western Darfur region signed ceasefire and humanitarian arrangements today after over a year of bloody fighting that has claimed more than 10,000 lives. Under the terms of the deal signed in the Chadian capital, the parties have agreed to cease hostilities within 72 hours, for a renewable period of 45 days. They have also agreed to guarantee safe passage for humanitarian aid to the stricken region, to free prisoners of war and to disarm militias who have been blamed for much of the violence. The delegations have committed themselves to meeting again within 15 days in Ndjamena for new negotiations over political issues. The agreement was signed by all the parties at the talks in Ndjamena: the Sudanese government and the two rebel groups - the Sudan Liberation Movement (SLM) and the Justice and Equality Movement (JEM).

Short term, this ceasefire will help the resolution of the global North-South peace process. However, since this is not the first ceasefire between tboth parties, there's no garantee this one will stick. Moreover, lots of problems lie ahead. Not only do the parties need to talk about the economic development of the Darfur region, but overall power arrangement related to the the distribution of the oil wealth still need to be adressed. But the most urgent problem remains the military build-up in Chad:

Several Westerners working in Abeche said Arab militias had attacked refugees near the border in recent days and the Chadian army had boosted its presence there. "There has been a big show of force by the Chadian army. They have moved tanks and troops to the border," said one aid worker who declined to be named. "There was a big clash on Tuesday which lasted about 3-1/2 hours. There were deaths on both sides."

Back to Kigali, Iraq 

Some people wonder why there are so much posts on military affairs in African Oil Politics. The reason is quite simple: in the Age of Kipling, European empire builders used the military and the clergy in their hunt for exotic natural resources. Nowadays, while American nation-builders prevail everywhere, few details have changed: oil and gas are the main goal of the quest for resources, the media plays the role of the clergy, and the military remains paramount.

Train, equip & more

Yesterday brought an interesting collision of news: the war in Iraq got really nasty -- with the bombing of a mosque, the kidnapping of civilians, etc. -- and Rwanda's President Paul Kagame accused France of complicity in the genocide in a keynote speech that was broadcasted worldwide:

"They (France) knowingly trained and armed the government soldiers and militias who were going to commit genocide and they knew they were going to commit genocide," Kagame said at a ceremony at the country's national stadium to mark the tenth anniversary of the genocide.

My impression, after reading Patrick de Saint-Exupéry's book, is that Kagame did tell the truth:

"French military officers trained the killers in the genocide," De Saint-Exupéry says in his book 'L'Inavouable - [La France au Rwanda]' (The unspeakable - France in Rwanda). "They did that on orders, by teaching the Rwandan army counter-insurgency strategies and tactics."

As a matter of fact, there's a story towards the end of the book that moved me quite a bit: in Paris, Kagame is threatened by French diplomatic officials not to attack Kigali. If you do that your people will be exterminated, he's told. I can assure you that once you've read the book, you won't watch someone like Dominique de Villepin on CNN the same way again. Which brings us back to Iraq!

The "Mémoire Jaune" syndrome

A fellow blogger asked recently: what's the problem with the US army learning from the Israelis or the Algerians? Interesting question. I leave aside the obvious media impact of an Intifida in Fallujah, Sadr City, or Najaf. That's rather obvious. What history shows is that the French were defeated in Algeria in spite of all they had learned in the field of "revolutionary warfare" in Indochina -- aka Vietnam. Remember?

Once again, despite all the lessons learned in the Battle of Algiers, they were unable to secure victory in Rwanda and later in Congo-Zaire. What most people don't know is that the French were so badly hit both in Vietnam and Algeria that they developed a syndrome known as "La mémoire jaune". It's that collective psychologic trauma that they carried with them in Africa. America has developped a similar illness after Vietnam and Mogadishu. I doubt Iraq will cure it. For la « Mémoire jaune » is, according to Patrick de Saint-Exupéry, "the humiliation of defeat and the exotic war fever, the colonial legacy’s spirit of knighthood : it’s the hatred for the political power, that sends you to death and doesn’t care, that accepts to bring in foreign recruits and abandons them. It is finally a fascination for the enemies’ methods, that you need to adopt in order to hope win one day: secret operations, the fear weapon, the manipulation of crowds, the propaganda..."

Hearts and minds

Borrowing the methods of the terrorists or the resistance is one thing: wining the "hearts and minds" is something else. Moreover, you can't win the war if you can't win the "hearts and minds". As Bernard B. Fall writes in the preface to Rogier Trinquier's Modern Warfare (yes, I've found it for you):

In revolutionary war (or, as Trinquier calls it throughout the book, italicizing the term for emphasis, "modern warfare"), the allegiance of the civilian population becomes one of the most vital objectives of the whole struggle. This is indeed the key message that Trinquier seeks to impress upon his reader: Military tactics and hardware are all well and good, but they are really quite useless if one has lost the confidence of the population among whom one is fighting. (AOP's emphasis)

Fuelling the status quo  

Dick Cheney once declared: "The problem is that the good Lord didn't see fit to put oil and gas reserves where there are democratic goverments". He just forgot to tell us about the responsibilities of oil companies's in the status quo.

Wednesday, April 07, 2004

Princeton: ask the expert 

Princeton Lyman did a remarkable job in his open statement on Figting Terrorism in Africa. It's the most comprehensive and balanced description of the terrorist threat(s) in Africa. As a matter of fact, 99 percent of what he says can be considered as an accurate summary of our own views on the topics covered. Here's a selection of bullet points you can add to a previous AOP's post on Al Qaeda & US footprints in Africa:

The diversity of terrorist threats in Africa

Each region in Africa faces a specific kind of terror threat. Some threats are immediate, far-reaching and substantiated; others are more limited and need more intelligence before we can consider them real:

There are some immediate threats from existing terrorist networks. This is particularly true in the Horn and east Africa. Some arise from failed or failing states that allow financial exploitation by terrorist groups or exploitation of internal conflicts to recruit members to terrorist networks. This has been the case in central and West Africa. Another threat is in the sparsely populated regions such as the Sahel where terrorist groups, like the Salafist Group for Preaching and Combat (GSPC) from Algeria, can find sanctuary and even set up training sites. Finally, and perhaps most challenging of all, there is the threats that arise from deepening economic and political crises in key states like Nigeria.

Rigth now, the Horn of Africa represents much more danger than the Sahel: Somalia is much more threatning than Mauritania, Mali and Chad. The diffence between the $100 million of the East African Counterterrorist Initiative and the $7,5 million of the Pan Sahel Intiative is the best evidence of what really is at stake.

Counterterrorism in Africa: handle with care

Greater political sensitivity is needed in countries such as Kenya and Mauritania if the United States want to fight terrorism and promote democracy in Africa:

Here as elsewhere, the U.S. has to be sensitive to fledging democracies in Africa, and not fall into the trap of promoting actions and leadership that would undermine the democratic trend. Kenya also has suffered from the loss of tourism, its principal source of foreign exchange, as a result of U.S. travel advisories related to the terrorist threat. There may be no easy answer to this problem, but we must be wary of creating a political backlash in as strong an ally in the war on terrorism as Kenya.

This is also the case in Mali, Mauritania and Chad:

[W]e also must be concerned with the fragility of democracy in states like Mali and the limitations on democracy in countries like Mauritania. ... Mauritania is a country where the line between the government's legitimate opponents on the one hand and terrorists and coup plotters on the other is a thin one. The U.S. has to be especially careful that we do not become partners in a political process that drives people into the arms of Islamic extremists. Chad is not very different, with historic friction between north and south and between various tribal groupings. Let us tread here with care and discretion.

Put the money where the threat is

Lyman shows how budgetary reasons have constrained peacekeeping initiatives mission that are an integral part of the war on terror: preventing states' collapse in Africa is the best way to reduce the opportunity for al Qaeda and criminal networks possibly affiliated with it to take over failed states.

Congress has an important role here. Congress has consistently resisted Administration requests for a peacekeeping contingency fund. That is no longer tenable if the U.S. is to respond rapidly and responsibly to the volatile situations across Africa. Delays in providing peacekeepers, and constant efforts to cut back on their size and capability, prolong crises and weaken conflict resolution efforts. If failed or failing states are as much a threat to terrorist exploitation as has been demonstrated in Afghanistan, Somalia, Liberia and Sierra Leone, then we must reconcile ourselves to a larger and more consistent commitment of resources to overcome those situations.

Poverty vs. Islam in Africa

Islamic traditions in Africa are rather moderate and peaceful, but economic problems allow politicians to use religion as a weapon of choice. Poverty is the enemy, not islam. In Nigeria, it has killed more people than al Qaeda:

In the past fifteen years, per capita GNP in Nigeria declined by two-thirds. Nigerians are experiencing an almost unprecedented level of poverty. Migration and land pressures have added to the mix. ... All together these factors have led to ethnic, religious, political and other sources of violence that took 10,000 lives from 1999-2003. In this atmosphere, the openings for terrorist infiltration cannot be overlooked. Osama Bin Laden himself listed Nigeria as a priority target. So far, there is no indication that terrorist networks have taken hold in Nigeria nor that even many radical Islamic figures have contemplated a policy of violence. ... We must also be careful to recognize that not all terrorism or political violence is religiously based.

Energy security and military cooperation: a dangerous mix

Princeton Lyman has been the only expert at the hearing who talked about the danger of the militarization of US foreign policy in the oil-rich Gulf of Guinea:

With additional resources DOD is prepared to assist the oil producing countries of the West Coast in establishing offshore security capability, guarding against attacks on the drilling installations springing up all along the coast. Welcome as this interest is, it is dangerous if not matched by an equivalent level of interest and capability in State and USAID in addressing the political and economic factors that make Africa worrisome. A response overly balanced to the military side will push us too close to the line of oppressive regimes, too insensitive to the political dynamics of an anti-terrorism strategy, too limited in our response to the problems of poverty that underlie every African security problem. Our military colleagues would in fact agree.

US strategic interest in Africa

His conclusion is far reaching and puts the focus on the wider issue of US increasing engagement in Africa:

Our interest in Africa must be seen as strategic. Once that fundamental recognition takes place, the resources that will be needed can be judged accordingly. And only then will we meet the totality of the terrorist threat on the continent.

These are words of wisdom from a man who has been US ambassador to South Africa and Nigeria, and who served for over three decades in the U.S. Department of State and U.S. Agency for International Development. That's what we call an expert. Unlike some self-proclaimed "specialists" who have visited one or two countries, Princeton Lyman knows what he talks about.

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