The Race for Resources Gangsters and Africa's Black Gold Rush

The Americans and the Chinese are vying for control of Africa's huge oil reserves. China's growing industrial base is also foraging for copper, manganese and tropical hardwood to feed its voracious appetite. Africa's dictators are the real winners.

Dokubo-Asari, who has given himself the terrifying first name of Mujahid, had no way of anticipating his imminent arrest. The beefy rebel leader plunged thick fingers into his bowl, fished out a fatty piece of chicken from the sauce, and shoved it into his mouth, dripping a red trail on his white caftan in the process. Smacking his lips, he launched into tales of his exploits.

The Niger Delta could not be compared with Bosnia, at least not yet, he expounded with a touch of pride. After all, he could already mobilize more than 100,000 troops. If the government continued to betray him, he would unleash this force, targeting the governor’s bandits, the oil companies – and all foreigners.

Of the approximately 130 gangs, which go by names such as “The Vikings,” “The Icelanders,” the “National Alliance of Adventurers” and “Black Ax,” the 41- year-old Dokubo-Asari may well command the toughest of the bunch: a band of warriors from the Ijaw tribe that has its home in the delta. His militia is suspected of regularly tapping Shell’s pipelines, kidnapping or killing its workers, and staging shootouts with rivals on the streets. The BBC estimates that Dokubo-Asari has some 2,000 desperados under his control. He has christened his guerilla fighters with the ostentatious title “Niger Delta People’s Volunteer Force.”

The havoc these renegades can wreak is all too familiar to Royal Dutch Shell, which pumps one million barrels of oil a day in Nigeria. According to its annual report, an average of 50,000 barrels a day were stolen in 2004, at a loss of almost $1 billion. In the same period, a dozen workers were killed, between 50 and 70 kidnapped, and a total of 314 criminal incidents recorded. Pumping had to be halted 176 times. A complete tanker, the African Pride, even disappeared, ne’er to be seen again!

African oil in high demand

“The oil theft is bleeding us white,” company spokesman Larry Ossai complains in Nigeria’s capital, Abuja. For the security company WAC Global Services, conditions in the Niger Delta may even recall Chechnya.

Several months ago, Nigerian officials decided enough was enough. Dokubo-Asari was taken into custody on charges of planning a coup. Since then the conflict has been threatening to careen out of control. One hundred heavily armed Dokubo supporters seized an oil rig operated by Chevron. As a precaution, the American oil company shut down a second platform.

Shell too has pulled out workers – although no other place in the world is currently discovering oil reserves as fast as Africa’s terra incognita. Already, some 8 million barrels are being pumped every day. High-quality crude, light and low in sulfur. Easily processed into gasoline, African oil is in high demand.

In the past three decades alone, fossil fuel has allegedly brought more than $280 billion dollars into Nigeria. Most of this has disappeared into the pockets of corrupt politicians. The Economist has referred to a recently concluded debt relief program for the resource-rich country as “laughable.” There is every indication that the cash will keep flowing. The oil industry predators have been circling the chaotic countries located on the Gulf of Guinea in increasing numbers – not just as a result of the stratospheric rise in oil prices and dwindling reserves in the other Gulf.

Up to 100 billion barrels are thought to be hidden, primarily off the West African coast – roughly the equivalent of Iraq’s reserves. U.S. congressman William Jefferson announced happily in 2004: “Last year, 8 billion barrels of oil were discovered around the world, and seven billion of them were off the West African coast.” The treasure trove is there for the taking.

Dizzying growth rates

The United States has a particular interest in these reserves: Nigeria is its fifth largest supplier of crude, with central and western Africa making up 15 percent of its oil imports. That figure will soon hit 20 percent.

Dizzying growth rates are projected for countries like Nigeria and Angola, where corruption is endemic. In the not-too-distant future, they could even double their output. The inflow of cash is expected to reach tidal proportions across the Gulf of Guinea: in Gabon, Congo-Brazzaville, Equatorial Guinea, São Tomé and Prín- cipe. The oilfields extend hundreds of miles inland.

Massive pipelines are already channeling crude from Chad to the western coast. From there, a tanker can reach Texas in half the time it takes from the Persian Gulf. The next country on the drilling schedule is Cameroon. “Within the next five years, the region will be adding two to three million barrels per day to the world market,” the Center for Strategic and International Studies forecasts: “a full 20 percent of the new production capacity worldwide.” Experts predict that the eight biggest oil-producing countries in Africa will earn $35 billion in 2005 alone.

Geologist Tom Windle, who tracked down oil reserves in West Africa for Amoco, thinks eastern Africa has the most potential: “If someone came to me and said, ‘Here’s a billion dollars; I want you to open up a new frontier basin,’ I would say, ‘Right, the East African margin.’” Exxon Mobil, Woodside Petroleum and Tullow Oil are already at work in the continent’s east. In Somalia, the hunt was halted in 1991 by the country’s devastating civil war. But with a new government elected in the fall of 2004, the oil companies’ representatives have been flocking to its provisional capital in Jowhar.

"Africa holds all the aces"

A huge pan-African oil field extends from Port Sudan to Port Harcourt – with a special attraction: With the exception of Nigeria, no African country south of the Sahara is a member of OPEC. And Nigeria itself continues to toy with the notion of quitting the cartel, enabling it to boost production to 4 million barrels a day by 2010.

African muscle would seem the only way to ease the Arab world’s stranglehold on prices. It is no wonder that Washington considers West Africa one of the American market’s fastest growing sources for oil and gas.

That, at last, is good news for a continent best known for its suffering. And the news is getting better still: China too has discovered Africa’s potential as a supplier. The emerging economic superpower desperately needs natural resources to maintain its annual 9 percent growth rate.

Never before have the United States and China been so focused on Africa, and their interest will only grow keener. The battle for the black gold has already begun. “Africa holds all the aces,” the magazine Africa Today says.

The Chinese evidently have few scruples. After the United States declared Islamic- governed Sudan a rogue state for harboring Osama Bin Laden, forcing the American companies to abandon their lucrative trade with the country’s crude, China was only too happy to fill the void. Today China is a major investor in the land of the Mahdi. In return, Sudan ships 60 percent of its oil to the Asian power – not exactly peanuts, given its daily output of 340,000 barrels. Once the Melut oil field comes on line in the near future, the total could rise to 800,000 barrels a day.

The Chinese view their commitment to Sudan as a long-term partnership. Just recently, an army of Chinese workers began building a second, 1,500 kilometer pipeline from its southern oil fields to Port Sudan on the Red Sea. In the quid pro quo deal, Umar Al Bashir’s government – which invests almost two-thirds of its oil revenues in its military – will be supplied with weapons from the People’s Republic: armaments it desperately needs to wage war in its eastern provinces and against the rebels in Darfur.

China looks to profit from genocide

It is no surprise that the Chinese government knows how to reward such constructive cooperation. Whenever harsh resolutions against the mass murderers in Khartoum have been tabled at the UN, China has stood ready to wield its veto. As U.S. secretary of state, Colin Powell was quick to condemn the slaughter in Darfur as genocide. But China’s ambassador to the U.S., Zhou Wenzhong, takes a different view of his country’s actions. “Business is business,” he maintains. “The situation in Sudan is an internal matter.” Now a frustrated United States is resigned to watching Beijing torpedo its security and human rights strategies. What is more, it is powerless to stop China from securing control of Sudan’s oil reserves. China already gets 6 percent of its crude from Sudan, on a par with its imports from Russia.

“We import oil from every source we can get it from,” admits Li Xiaobing, deputy director of the West Asia and Africa Department in China’s Ministry of Trade.

For German political scientist Denis Tull – who compiled a report entitled “The People’s Republic of China’s Approach to Africa” – China’s growing political influence in Africa is “generally negative.”

Instead of compelling the Africans to embrace democracy and transparency, Beijing’s vehement “defense of the principle of sovereignty” was instead benefiting authoritarian African leaders who have been rebuffed by the West, Tull says.

Their hands tied, EU foreign ministers have watched China’s capitalist corps advance across the continent, making a mockery of their attempts to democratize the authoritarian regimes through aid. China already imports over 28 percent of its oil from Africa (2003: 25.2 percent). Between 1989 and 1997, the volume of trade rose 431 percent. Since then, it has “more than quintupled” (Tull) – hitting a record $24 billion. Sometime soon, China is expected to displace Great Britain as Africa’s third largest trading partner. Of the 40 bilateral investment agreements China signed between 1995 and 2003, 18 were with African countries. By 2004, 700 Chinese companies had descended on the continent’s markets; their direct investments totaled $1.5 billion.

China is buying up anything its ravenous industrial sector can consume: wood from Congo, copper from Zambia, and manganese from Gabon for use in steel production. In return, Africa is receiving mass-produced goods made in China. Their affordability makes these commodities particularly attractive to the poor countries south of the Sahara: clothing, transistor radios – and kalashnikovs.

Traffic is heavy in both directions. So much so that Kenya Airways has opened up a fast lane: Direct flights now connect Nairobi and Hong Kong. Tons of trinkets from the Far East are flooding the African markets. Every few weeks, a new bevy of African kleptocrats heads off on a pilgrimage to Beijing: delegations dispatched by bankrupt countries that are now even denied development aid.

Barred from Britain

Recently, Kenyan President Mwai Kibaki toured the Far Eastern empire in an attempt to shore up the battered self-confidence of his corrupt government. Germany has already frozen €5 million in aid pending government action on key corruption cases. Its ambassador in Nairobi is threatening further sanctions, because donations were used “illegally and wastefully” for propaganda purposes. And the United Kingdom recently revoked a visa issued to Kenya’s transport minister, Christopher Ndarathi Murungaru, and barred him – on grounds of corruption – from setting foot on British soil.

During his five-day stint in Beijing, however, Kibaki met with cordial treat treatment – and graciously accepted his host’s pledge of $34 million. The leader was able to “return home a contented man” from a “fruitful visit,” according to the pro-government Kenyan newspaper Daily Nation. But the critical Standard was less euphoric in its assessment of Kibaki’s fundraising trip: “The money is making its way into the government’s pockets and bypassing the usual controls,” the publication warned. It went on to express the hope that bribes would not induce Kenya’s rulers to make “any wild concessions to the Chinese government which they prefer not to disclose at this juncture.”

Such fears would appear justified. Zimbabwean President Robert Mugabe was recently welcomed by Chinese President Hu Jintao as a “great friend.” While in China, Mugabe reportedly authorized the Chinese to exploit platinum deposits in his ailing country – and received military aircraft worth $100 million in return.

“African leaders like Kenyan President Kibaki or Zimbabwe’s dictator Robert Mugabe are making the same mistake made by all African leaders before them,” says Kenyan economist James Shikwati, “when they head off on a begging tour to the Far East.” The accord with China’s power brokers could quickly turn into a pact with the devil. When it comes to alms, African leaders are prepared to sell out the continent’s vast natural resources – recalling the darkest age of European imperialism, when entire countries changed hands for glass beads, liquor and copper wire.

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