Africa is often seen as a place to be pitied or feared as an area of instability. This book challenges these complacent assumptions, showing how our demand for oil contributes to the chronic problems plaguing the continent.
Douglas A. Yates shows how the 'scramble' by the great powers for African oil has fed corruption and undermined democracy. Yates documents how Africans have refused to remain passive in the face of such developments, forming movements to challenge this new attempt at domination.
This book is an urgent challenge to our understanding of Africa, raising questions about the consequences of our reliance on foreign resources. It will be vital reading for all those studying development and global political economy.
About the Author
Douglas A. Yates is Professor of International Relations & Diplomacy at the American Graduate School, International & Comparative Politics at the American University of Paris, and Anglo-American Law at the University of Cergy-Pontoise. His most recent book is The French Oil Industry and the Corps des Mines in Africa (2009).
Read an Excerpt
Foreign States and Trade Relations
COLONIALISM, NEOCOLONIALISM, AND GLOBALIZATION
For half a century, foreign oilmen followed a colonial pattern of investment in Africa. Money came from Europe. Geologists came from Europe. Companies came from Europe.
They tended to go where they spoke the official language and enjoyed citizenship rights.
They represented imperial interests in closed political economies. Each worked within their own respective "sphere of influence." Colonial powers preferred to sell concessions to their own companies to pioneer petroleum production in a context of legal rights and privileges. British oil companies ruled over Nigerian oil because Britain ruled over Nigeria, and had the capital and mining technology to do so. French oil companies did the same in French Africa. Spanish oil companies also tried this offshore in Spanish Guinea, unsuccessfully. But the Portuguese were too poor and technologically weak to develop oil in Angola, so they sold concessions to the Americans. In all cases, colonial oil was theirs to sell. The history of this oil adventure is well known.
In British Nigeria, D'Arcy Exploration (later BP) first started reconnaissance work in 1937. The Second World War interrupted their drilling. Then, in 1951, Shell Oil joined d'Arcy and invested millions of pounds sterling in Nigerian exploration, finally producing oil in 1957. (Howarth 2007) BP was kicked out in 1978, but Shell remained in the Niger Delta.
In French Africa, the Société des Pétroles d'Afrique Équatoriale Française (SPAEF), a colonial subsidiary of the Bureau de Recherches de Pétrole (BRP), conducted the earliest seismic tests and shallow-water exploration. The BRP was a state organism created by the French government to develop colonial oil resources in North Africa. After the Algerian war of independence, when France lost its oil to the Arab nationalists, this state machinery and personnel migrated down into Equatorial Africa, where it founded local subsidiaries that adopted the host country names: Elf-Gabon first exported oil in 1957, then Elf-Congo in 1969, then Elf-Cameroon in 1973. These subsidiaries were run by the Paris-based mother company, Société Nationale Elf-Aquitaine, and continued to dominate the old sphere of influence, helped by a shadowy network of soldiers and spies under the infamous Jacques Foccart. Elf usually resisted efforts by American majors to penetrate its African oil zone, so when it invited foreign partners to share in the risks of investment, Elf always remained the principal operator. French oilmen were pioneers of the neo-colonial pattern of petroleum investments. (Yates 1996, 2006)
In Angola, however, the Portuguese oil companies were not sufficiently advanced, nor were their domestic markets large enough to justify enormous colonial investments. So Lisbon invited Sinclair Oil, an American firm, to conduct exploratory drilling in the Cabinda Enclave during the interwar years (1918–32). When it left during the Great Depression, Lisbon invited another American oil company, Gulf Oil, in 1957 to invest in its Angolan possession. So the Americans began exporting oil from Cabinda in 1968, and during the long Angolan war of independence, Portuguese soldiers protected them from Cabindan separatists. Even after independence, the new Angolan regime did the same. The MPLA founded a state oil company, Sonangol, to be its sole legal concession holder. But it needed foreign capital, technology, and markets to sell its oil. So the regime had no choice but to farm out the enclave, leaving Gulf Oil (Chevron) with two-thirds of production. (Minter 1972)
In Spanish Guinea, the national oil company, Repsol, tried but failed to find oil in Spain's only African possession. After independence in 1968 they continued to explore offshore until the Equatoguinean regime broke with Spain and the West to become a client of the Soviets. Few investments were made by the majors during this period. But when the first ruler was overthrown by his nephew in a 1979 military coup, the new regime offered its offshore waters to American investments. Mobil Oil thus entered into this hispanophone sphere of influence, followed by a legion of American oil independents, who transformed Equatorial Guinea into an important African oil-exporting country. (Liniger-Goumaz 2005)
Old colonial patterns of investment can be understood as an effort by the European oil companies to monopolize petroleum resources in their respective spheres of influence. These patterns became neocolonial when African countries were no longer colonies, yet they still depended economically and militarily on foreign powers. By the end of the twentieth century, four foreign majors dominated Africa: Shell, TotalFinaElf, ExxonMobil, ChevronTexaco. They produced around 75 percent of all oil exported from the region. (Copinschi 2001: 34) Two were European, and two were American. The fall of British, French, Portuguese, and Spanish monopolies had been paralleled by the rise of American capitalism. American majors in the European spheres of influence may have taken longer to arrive in those oil enclaves. But their arrival was a by-product of America's rise to global power during the Cold War. During this period of African history, superpower rivalry determined by ideology replaced the older patterns of collaboration. The West was often on the wrong side, choosing men who would collaborate with multinational corporate designs for Africa and assassinating genuine nationalists and pan-Africanists who might, had they lived, taken their countries in a different direction.
The ex-colonial European powers, by virtue of the enormous and in many ways profoundly formative impact of their colonial policies on patterns of African economic growth, international trade, state formation, recruitment of indigenous leadership, and linguistic and religious development, were from any historical perspective far more important non-African actors than the two recently arrived superpowers. At the same time, the ex-colonial powers were clearly a part of the West, which found itself pitted against the East. In this respect the presence of Western Europeans in Africa — whether as technicians, soldiers, teachers, policy advisors to governments, or private entrepreneurs — meant that Western leverage on Africa was considerably greater than that of the Eastern bloc. While the United States worried about Cuban troops in Africa, the Soviet Union worried about French troops in Africa and the potential they and their allies had for retaining the continent as a largely European sphere of influence.
A special complication during this period of intense superpower rivalry was that each superpower, anxious to contain its rival but equally anxious to avoid a direct confrontation in which it might not be able to prevail over that rival, sought to exert international influence indirectly through client states, which it supported in the expectation that they would independently advance the superpower's interests. Each superpower further assumed that its rival acted in the same indirect fashion and exercised ultimate control over the foreign policy of client states, which served as mere proxies or surrogates for their powerful patron. The US government perceived Cuban military activity in Angola as the not-terribly-subtle means by which Soviet power was extended in southern Africa. In quite a similar way, the Soviet Union perceived France, Belgium, South Africa, Morocco, and Mobutu's Zaire as surrogates for the African interests of the capitalist hegemon, the United States. The oil industry in Africa was shaped by and for triumphant Western capitalism.
But after the Cold War, other foreign actors from Asia soon followed into the breach the Americans had opened up. This new "Scramble for African Oil" is a pattern of globalization that has generalized foreign oil investments, which had previously been exclusive domains of former colonial powers. The arrival of Japan, Malaysia, India, and China into these African enclaves long dominated by the West has been the most striking change caused by this pattern of globalization. The first to invest was the Japanese National Oil Company (JNOC), which entered Zaire in the 1970s. Japan was totally dependent on oil imports, and was an American ally during the Cold War. In the 1990s the Malaysian national oil company, Petronas, and the Indian Oil and Natural Gas (ONGC) used their technology and finances to scramble for oil in the interior of Sudan.
The Chinese National Oil Company (CNOC) and Sinopec also arrived in Sudan in 1995. What is most startling about China's entry was the speed with which it penetrated traditional spheres of influence. Although China had purchased Angolan crude from the Marxist regime as early as 1988, it was not until it joined an oil consortium and started producing crude oil in Sudan (1999) that the world first took notice. Buying exports from Congo (2000), opening offices in Libya to explore the desert (2001), sending exploration crews into Nigeria (2002), winning projects in Algeria (2002), buying oil cargoes from Equatorial Guinea (2002), signing agreements to import from Gabon (2004), beginning trial production in Darfur (2004), signing contracts in Mauritania (2004) and production-sharing deals with São Tomé (2005), sending seismic crews to Ethiopia (2005). All of a sudden China was in every oil country, raising new questions: Would Chinese oil companies change investment patterns in Africa? And would their strategy provoke an oil war with the Americans? (Le Pere 2006)
RESERVES, PRODUCTION, PEAK OIL, AND WAR
Before answering these questions raised by Chinese entry into the scramble, it is important to explain the basic facts of African oil. Our sources for these facts are the oil companies, oil-exporting governments, and oil business analysts. There are no independent sources of data, although international organizations give that appearance by publishing data actually derived from these primary sources. Even we free-thinking scholars depend on oil business sources. This raises problems of reliability. The oil industry is not transparent. Oil-rich states are often corrupt. And oil analysts frequently compete with rival data, rival theories, and rival methods. Add to this the different systems of measurement (barrels of oil, tonnes, c.i.f., f.o.b., proven versus estimated reserves) and you see the problem.
Africa south of the Sahara is estimated to possess around 5 percent of world oil reserves, according to British Petroleum. It may have over 53 billion barrels in total proven offshore reserves. West Africa is viewed by the industry as the world's leading offshore oil region. Business analysts largely agree that the Atlantic trend is an oil-industry Eldorado. More capital expenditure has been invested in the Gulf of Guinea than in any other offshore oil region. But if we look beyond such aggregate figures of the whole African oil sector, we see a picture of uneven growth. Some countries are discovering new reserves. Others are exhausting theirs. Some countries are increasing production. Others are declining. Some countries are trading with the West; others are going to the East.
British Petroleum publishes a statistical review of energy (available free on their website). On average, oil production in Africa rose 12.4 percent between 2007 and 2008, but a quick glance at the changes by country of origin show how different the picture is between those countries where output is increasing, such as Angola (+9.1 percent), Sudan (+2.6 percent), Congo (+12.3 percent), and Gabon (+2.2 percent), and countries where production is declining, such as Nigeria (-8 percent), Chad (-11.5 percent), and Equatorial Guinea (-2.1 percent). These variations in oil output have produced important change in the rankings. In the past, Nigeria was the number-one oil producer in sub-Saharan Africa (North Africa is treated separately by convention). Since 2008, Angola has been number one. These changes are explained by huge capital expenditures made in deepwater oilfields off Angola, and in onshore southern Sudan. They are also explained by the ongoing conflict in the Niger Delta. But the declines in Chad and Equatorial Guinea reflect a different "structural" reality: proved reserves are declining. Chad pumps oil from a handful of fields in Doba, but without new fields brought on line, its production will decline. Equatorial Guinea is depleting its largest reservoirs, and the oil companies are using horizontal drilling and/or sub-surface injection to squeeze out the last drops. Equatorial Guinea does have more oil offshore, but unless those reserves are proven (i.e. drilled) and brought on line, its production figures will decline. Small producers such as Cameroon, Democratic Republic of Congo, or Mauritania (tabulated by BP as "Other Africa") represent less than 1 percent of total African output. All of this makes a very simple point: oil is a scarce and non-renewable resource. Once "peak" production is reached, African reserves will fall ineluctably towards exhaustion.
According to BP, proved reserves in sub-Saharan Africa range from: 36.2 billion barrels (Nigeria), to 13.5 billion (Angola), 6.7 billion (Sudan), 1.7 billion (Gabon), 1.9 billion (Congo), 1.7 billion (Equatorial Guinea), 0.9 billion (Chad), and 0.6 billion ('Other Africa'). These "proved" reserves are limited to those reservoirs that geological and engineering information indicates with reasonable certainty can be recovered in the future under existing economic and geological conditions. As the price of a barrel of oil increases, so do the proved reserves. As new technological advances drill deeper and pump better, more oil reserves will be proved. One paradoxical phenomenon is that, as oil production has increased, proved crude reserves have also increased, because of the very act of drilling itself (i.e. proof). BP's publication of proved reserves is not a conspiracy by the oil company to create in us a false sense of scarcity; rather it reflects the limits of forecasting the future, and the desire to base estimates on hard evidence rather than on geological speculation.
The China question is related to peak oil. So long as Africa is in an oil boom, with new discoveries and rising production, Europe, America, and Asia can scramble with impunity. But future conflict or cooperation depends ultimately on the timing of peak oil and the size of proved reserves. BP publishes a "reserves-to-production" ratio — R:P — that represents the length of time that remaining reserves would last if oil production were to continue at the previous year's rate. It divides remaining reserves at the end of a year by that year's oil production (R/P = reserves/production.) This statistic includes unproved reserves that are known geologically but not yet proved by drilling. According to BP reserve–production ratios, the future will vary from: 45.6 years (Nigeria) 38.1 years (Sudan), 37 years (Gabon), 21.3 years (Congo), 19.7 years (Angola), 19.4 years (Chad), 12.9 years (Equatorial Guinea), and 12 years for the rest of Africa. This ratio, while useful, does not really answer the question of peak oil, for it assumes that production will be the same in the future, and that no new discoveries will be made. But these are variables, not certainties. The R:P ratio cannot say with certitude exactly when oil production will peak. It can, however, say that some countries will peak before others.
An alternative approach is the "Hubbert method," named after Marion King Hubbert, a Shell geophysicist in Houston, who published controversial calculations in 1956 showing that US oil production was going to peak in 1970 and thereafter rapidly decline. At the time, the US was the largest oil producer in the world, and few people took Hubbert's idea seriously. But he was proved right. American production did peak at 9 million barrels per day in 1970, and it has since then declined to 6 million barrels a day. The exactness of Hubbert's prediction led oil companies to use his method to estimate the capacity of their productive oil fields. Hubbert had data only for the United States, but in the late 1990s geologists used world oil data to evaluate world reserves. According to their calculations the "Hubbert peak" at the world scale would arrive in the first decade of this century. That is, world production has already peaked! This startling prediction resulted in the publication of several best-sellers, including: Hubbert's Peak: The Impending World Oil Shortage (2001) by Kenneth Deffeyes, a colleague of Hubbert at Shell who now teaches geo-science at Princeton University, and Out of Gas: The End of the Age of Oil (2004) by David Goodstein, a physicist at California Institute of Technology. You may have heard about "peak oil" when these books came out.(Continues…)
Excerpted from "The Scramble for African Oil"
Copyright © 2012 Douglas A. Yates.
Excerpted by permission of Pluto Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
PART ONE: POWER FROM ABOVE
1. Foreign States and Trade Relations
– Colonialism, Neo-Colonialism and Globalization
– Reserves, Production, Peak Oil and War
– Case Study: Neo-Colonialism in Gabon
– French Domination by Elf-Gabon
2. Multinational Corporations and Nationalization
– The Legacy of Geography?
– The Legacy of Slavery?
– Case Study: Yankee Landlords of Cabinda
– Portuguese Colonialism, American Imperialism
– Angolan Nationalism and the MPLA
3. International Organization and Governance
– Improving Governance in Africa's Oil Sector
– International Organizations: TI, Global Witness, PWYP, EITI
– Case Study: Chad and the World Bank Model
4. Rentier States and Kleptocracy
– Oil Rent and the Rentier
– Rentier Mentality, Allocation State
– Spanish Guinea (1778-1968)
– Dictatorial Guinea
5. Praetorian Regimes and Terror
– Soldiers and Oil
– Typology of Military States
– The Military in Congo-Brazzaville
– From Praetorian Rule to Personal Dictatorship
PART TWO: POWER FROM BELOW
6. Journalists and Intellectuals
– The Treason of the Clerks
– Cameroon: the Agathon of Mongo Beti
– The Return to Cameroon
7. Political Parties and Elections
– Electoral Democracy in Africa
– Multiparty Democracy in Sao Tome E Principe
– Oil and Corruption in Multiparty Democracy
8. Armed Struggle for Independence
– Oil and War
– Regional Identity and Violence
– Southern Identity and Violence in Sudan
– John Garang and the 'New Sudan'
9. Popular Resistance and People Power
– Things Don't Fall Apart
– Oil and Violence in the Niger Delta
– Collapsing the Failed State
10. Unscrambling the Scramble for African Oil
– Solution 1: Controlling Corruption
– Solution 2: Direct Distribution of Oil Revenues
– Solution 3: Invest in Social Development
– Solution 4: Boycott African Oil
– Solution 5: Stop Consuming Oil