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U.S. Quest for Oil in Africa Worries Analysts, Activists
Published on Monday, January 13, 2003 by the Los Angeles Times
U.S. Quest for Oil in Africa Worries Analysts, Activists
by Warren Vieth
 

WASHINGTON -- The Bush administration's search for more secure sources of oil is leading it to the doorsteps of some of the world's most troubled and repressive regimes: the petroleum-rich countries of West Africa.

Government and energy industry officials say the strategy is a sensible way to reduce U.S. dependence on Middle East oil, particularly if it's accompanied by aggressive efforts to promote economic development and governmental reform.

But some oil analysts and activists fear the administration may be repeating mistakes of the past, when the U.S. tolerated questionable practices by allied governments to advance its Cold War and energy security interests.

Potential trouble spots include Equatorial Guinea, where officials confiscate oil payments and violate human rights "with impunity," according to the State Department; Angola, where oil financed three decades of civil war and which has billions of petrodollars deposited in offshore accounts; and Nigeria, where poverty deepened dramatically while officials squandered $30 billion in oil revenue.

Other African producers with documented records of governmental corruption, electoral fraud, financial mismanagement or human rights abuses include Chad, Cameroon and the Republic of Congo. Although some of the countries have taken tentative steps toward reform, U.S. officials say conditions remain generally poor in the region.

"We're dealing with many governments that have never really experienced democracy or the rule of law, so it's problematic," said House Africa Subcommittee Chairman Edward R. Royce (R-Fullerton). "We need to bring some pressure to bear."

"You could paint a very disturbing picture," Walter Kansteiner, assistant secretary of State for African affairs, acknowledged in recent remarks to oil executives in Houston. "These are dire times in Africa. And yet, on the other side of the coin, there is a continent that is truly the last emerging market."

Interest in African oil has been heightened by preparations for a possible U.S.-led war against Iraq, by a strike by Venezuelan oil workers and by political instability in Saudi Arabia, all of which underscore America's vulnerability as its appetite for oil grows. West Africa already supplies about 12% of U.S. crude oil imports, and the National Intelligence Council predicts its share will rise to 25% by 2015.

Oil development in West Africa offers many attractions, experts say. Reserves are bountiful, the quality is high, and shipping routes to the U.S. are generally shorter than from other oil-producing regions.

"West Africa has certain advantages," said Daniel Yergin, an oil expert and chairman of Cambridge Energy Research Associates. "The big disadvantage is the unstable political situation -- ethnic and regional conflict, civil wars and the issues of corruption and poverty."

Indeed, if West African leaders continue to use oil revenue to line their pockets, finance military adventures and repress their citizens, resentment of U.S. foreign policy is likely to grow in the Gulf of Guinea, just as it has in the Persian Gulf, experts say.

"Anybody can see that if we're going to rely on Africa as an alternative source of supply, then we mustn't fall into the same trap that we're trying to extricate ourselves from in Saudi Arabia," said international financier George Soros, who is leading a campaign to make oil producers more accountable.

Signs of increasing U.S. engagement are bubbling up throughout the region.

The national energy plan drafted by Vice President Dick Cheney's task force spotlighted West Africa as "the fastest-growing source of oil and gas for the American market," and the administration has promised industry officials to do what it can to promote development.

The first African head of state to visit President Bush in the White House was President Olusegun Obasanjo of Nigeria, the continent's leading producer. In September, Bush huddled privately in New York with leaders of 11 African nations, most of them current or prospective oil suppliers. Although the talks involved more than petroleum, participants said Bush discussed a $3.5-billion Chad-Cameroon pipeline project, whose partners include U.S.-based ExxonMobil Corp. and ChevronTexaco Corp.

A number of administration officials have traveled to the region in recent months. Secretary of State Colin L. Powell paid visits to Gabon and Angola, where he broke ground for a new U.S. Embassy. Bush plans to visit Africa later this year.

The administration is paying unaccustomed attention to Sao Tome and Principe, a tiny island nation of 170,000 sitting atop an estimated 4 billion barrels of newly discovered oil reserves. President Fradique de Menezes has offered to let the U.S. build a naval base in Sao Tome, and a U.S. general went there last year to discuss security issues.

The State Department, which closed its embassy in Equatorial Guinea eight years ago because of human rights concerns and budget constraints, will open a new one there this year, in part because of oil discoveries. Meanwhile, it has authorized a firm run by retired Pentagon officials to train Equatorial Guinea's coast guard.

The administration has also increased the authority of the U.S. Export-Import Bank to underwrite foreign projects, and bank officials say energy diversification is part of the reason. In October, the bank announced a $135-million loan guarantee to help finance construction of a petroleum plant in Nigeria.

U.S. officials say they are doing all they can to promote democracy, accountability and respect for human rights in their dealings with West African leaders. They cite U.S. support for the big pipeline project that will transport crude oil from landlocked Chad to the coast of Cameroon. In exchange for World Bank support and Western funds, the two countries agreed to extensive financial controls and independent monitoring.

"The way to proceed is to encourage oil development to go forward, but at the same time to put our weight behind initiatives that will improve governance," said Georgetown University professor Chester Crocker, who served as assistant secretary of State for African affairs in the Reagan administration. "We're not running a church. We're running a great nation."

Susan Rice, who held the same job in the Clinton administration, said she believes that the Bush team is genuinely committed to improving conditions in West Africa but that, if push comes to shove, it will put production ahead of reform.

"I'm a little dismayed that oil seems to be taking precedence over other issues when American officials are trying to elaborate what our interests are in Africa," said Rice, now a senior fellow at the Brookings Institution in Washington. "There's a lot more they could and should be doing."

The challenge is daunting. The State Department's latest human rights report accuses Chad's government of rigging elections and its security forces of killing and torturing political opponents. Transparency International, a global watchdog group, ranked Cameroon as the world's most corrupt government in 1998 and 1999; the country has since been pushed down the list by 10 others, including Nigeria and Angola.

Despite their petroleum riches, the nations of West Africa remain among the world's poorest: Per capita income in Nigeria is less than $1 a day, and the percentage of people living in poverty has more than doubled since 1980, even though the government is collecting an estimated $14 billion a year in oil revenue, according to Catholic Relief Services.

Some foreign policy analysts say these problems reflect the broader failure of oil and gas development to improve conditions for the poor. In country after country, oil windfalls have been embezzled or mismanaged, public spending has spiraled to unsustainable levels, other industries have withered, civil strife has increased, and poverty has worsened.

"We don't have a single example of oil leading to long-term positive outcomes in developing countries," said Stanford University political scientist Terry Lynn Karl, who has studied the effects of Third World petroleum development.

"We're repeating the mistakes of the past, and that lays the basis for difficulties down the road," she said. "Future generations will face the problems of having failed states, just as we are now facing the problems of the Middle East."

Some activists say the best way to improve conditions is to force big oil companies to report publicly how much money they pay host governments in the countries where they operate. Without that information, it is nearly impossible for citizens to hold their leaders accountable for oil payments that wind up in offshore accounts.

A coalition headed by financier Soros wants the U.S. Securities and Exchange Commission and its overseas counterparts to require such disclosures by every energy company listed on their countries' stock exchanges. The companies say they can't because they have signed contracts promising to keep the information confidential.

"The United States could do that overnight if it wanted to," said Global Witness campaigner Gavin Hayman, whose organization is co-sponsoring the "Publish What You Pay" initiative. "The trouble is, all the companies are busy competing. None of them wants to do it without the others doing it."

In the view of some activists, the soft spot in the Bush administration's Africa policy is precisely the government's reluctance to pressure U.S.-based oil companies to begin reporting the payments they make to Third World regimes.

"That's from their Republican philosophy," said American University economist George Ayittey, a specialist in African development. "But the world's political dynamics have changed so drastically that you can't just close your eyes to the deals going on between oil companies and corrupt African regimes."

Yet some analysts say there are limits to what the U.S. can do to influence practices driven more by economic fundamentals than by political philosophies.

"Jawboning, that's about all they can do," said Robert Ebel, energy program director at the Center for Strategic and International Studies. "But political jawboning and strong rhetoric can only go so far before some of the countries begin to resent the constant pressure to measure up to our standards."

Copyright 2003 Los Angeles Times

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