January 27, 2008
Dakar - High oil prices and the
onslaught of resource nationalism from
Russia to South America have sent
Western majors delving ever deeper
into the waters of the Gulf of Guinea,
triggering a new scramble for Africa.
Unlike more established oil-producing
regions, the Gulf of Guinea offers
easy access and attractive terms for
Western oil companies, like Royal
Dutch Shell and Exxon Mobil Corp,
desperate to replenish their flagging
reserves.
A number of West African countries,
from established producers Nigeria and
Angola to newcomers like Liberia, will
tender acreage this year.
But with Asian giants China and India
jockeying for resources, a battle is
under way.
"Africa, and particularly the Gulf of
Guinea, is one of the hottest
destinations in the world today for
the oil industry," said industry
expert John Ghazvinian. "It's the
final frontier in terms of
conventional sources of oil."
According to consultants PFC Energy,
only seven percent of the world's oil
and gas reserves are in countries that
allow majors free rein. Two-thirds are
in the hands of powerful state
companies such as Saudi Aramco and
Venezuela's PDVSA.
West Africa holds much less than a
tenth of the world's proven oil
reserves, compared to two-thirds in
the Middle East, but for foreign
companies, it is an oasis of
opportunities.
Royal Dutch Shell remains the leading
producer in Nigeria, despite a
simmering uprising in the Niger Delta.
In Equatorial Guinea, it is Exxon
Mobil; in Gabon, it is France's Total
and in Angola, Chevron.
As companies scour the waters of the
Gulf for new finds, use of drilling
rigs in the area is running at 98
percent of capacity versus around 75
percent in the Gulf of Mexico and
South America, according to ODS-Petrodata
Group.
Discovery rates are high. Since 2000,
a third of the world's oil finds have
been in Africa, most in the Gulf of
Guinea. Ghana struck oil last year and
aims to start production by 2009,
while tiny Sao Tome hopes to join the
club of West African producers.
But there are drawbacks.
Except for Nigeria, most West African
oil is offshore and expensive to
extract. With fears of a US recession,
which has hit oil prices and prompted
the International Energy Agency to cut
its 2008 demand forecast, analysts are
raising questions.
"What if there is a US recession and
oil prices collapse?" asked Sebastian
Spio-Garbrah, west Africa analyst at
Eurasia Group. "Would state companies
want more control? Would majors still
be willing to invest in costly
offshore production?"
Even if prices tumble, interest in
west Africa is likely to be sustained
by its strategic location between the
US and Asian markets, and the low
sulphur content of its oil which makes
it less corrosive to refine and more
environment-friendly.
But with talk of "peak oil" - a
plateau in world production - gaining
currency among even seasoned oil
executives, any prolonged decline in
petroleum prices seems unlikely.
Ghazvinian, author of Untapped: The
Scramble For Africa's Oil, predicts
some $50-billion will be invested over
three years, with US companies
accounting for a third of that.
West Africa already provides 17
percent of US oil imports. With
Washington keen to ease its reliance
on the volatile Middle East, the
National Intelligence Council, a CIA
think-tank, forecasts this will rise
to 25 percent by 2015.
Washington has already raised its
military profile in the Gulf,
launching a permanent naval presence
and seeking a site for its new African
command. But money may talk more than
military might.
Thirsty for oil to feed their booming
economies, China and India are pouring
billions of dollars into acreage in
Nigeria, Angola and Equatorial Guinea,
and they are reaping the benefits.
Angola has become the largest supplier
of oil to China, shipping a record
900 000 barrels a day in December.
China's CNOOC expects first oil this
year from Nigeria's giant deepwater
Akpo field, after it paid $2-billion
for a stake in 2006.
"Most production is still in the hands
of the majors," said Nicholas Shaxson,
author of Poisoned Wells: The Dirty
Politics Of African Oil.
"Chinese and Indian companies don't
have the expertise to compete with
Shell and Exxon Mobil, but they're
learning fast."
Russian resource nationalism casts a
long shadow in West Africa. State
monopoly Gazprom supplies Europe with
a quarter of its gas but European
firms have grown wary of Moscow and
are seeking sources of Liquefied
Natural Gas (LNG).
"The Europeans want to diversify away
from Russian supply," said independent
oil analyst Anthony Goldman. "The LNG
story is going to be even bigger than
the oil story in West Africa."
In Equatorial Guinea and Angola,
multi-billion-dollar projects are
under way to build or expand existing
LNG plants. Nigeria aims to become the
world's third-largest supplier of LNG
by 2010, and has a string of huge
projects in development.
Nigerian President Umaru Yar'Adua,
meanwhile, has ordered a shake-up of
the cumbersome and opaque state oil
company, NNPC.
"So far, Nigeria and Angola are the
only countries remotely moving towards
developing their own national
champions," said Ghazvinian. "But
strong demand for oil is bolstering
national assertiveness."
Greed for oil kills
In Africa or anywhere else, never
has a war been threatened on such a
flimsy pretext or unconfirmed evidence
as we have heard from the dossier of
devilishness to fight the Muslims
worldwide in order that Christians
anywhere in the world may solicit
their approval for a Bush rain of
death on men and women and children in
countries like Iraq, Afghanistan and
Somalia.
The lies about Iraqi weapons of
mass destruction made by US President
George Bush and the neoconservatives
who are a driving force in his
administration may have died an ugly
public death, but the real reasons for
the invasion of Iraq still remain
obscured in the warmongers' flowery
speeches. For example, in an August 20
radio address, Bush said: “We're
fighting the terrorists in
Afghanistan, Iraq, and around the
world, striking them in foreign lands
before they can attack us here at
home. And we're spreading the hope of
freedom across the broader Middle
East.”
The reality is, of course, that
Bush's “war on terror” has nothing to
do with fighting terrorism or
spreading the “hope of freedom” (much
less actually spreading freedom).
“War is merely the continuation of
policy by other means”, said the
Prussian 19th century general Karl von
Clausewitz. In the 20th and 21st
centuries this has translated to First
World governments using their armed
forces to protect the investments of
their country's capitalists in Third
World countries, and to defend the
“right” of their country's corporate
elite to exploit the raw materials,
markets and labour of the poor
countries. The “global war on terror”,
charmingly abbreviated as “the GWOT”
by the Pentagon, is no different.
From the beginning of the GWOT,
Iraq was in the White House's firing
line by virtue of its abundant oil
resources, which potentially spell a
dollar bonanza for US energy
corporations, and the strategic role
that a pro-US regime in Baghdad could
play in cementing Washington's
domination of the oil-rich Middle
East.
However, if the recent past is any
guide, Washington’s sudden rediscovery
of the persecution of Darfur’s
non-Arabic-speaking farmers will only
last as long as it takes to pressure
Khartoum to again tone down the worst
aspects of its ethnic-cleansing
campaign.
Since 2001, the Bush
administration’s priority in Sudan has
been to end the more than
two-decade-long war between the
southern-based Sudan People’s
Liberation Movement (S.P.L.M.) and the
Arab-chauvinist rulers in Khartoum.
The resulting “stability” in Sudan
would allow Washington to lift
existing sanctions and permit U.S. oil
corporations to return to southern
Sudan.
Despite playing the role of “tough
cop” at the U.N., U.S. officials have
worked closely with the other Security
Council members, and the A.U., to
craft a settlement that will be
bearable for Khartoum, while being
sufficient to defuse the Darfur crisis
enough to allow the final phase of the
north-south peace deal to be
completed. Of course, Sudan’s
reactionary rulers have continually
probed to test the limits of the
West’s tolerance, requiring Washington
to periodically escalate its rhetoric.
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