Where is the oil money

Nigeria's state-owned oil company has failed to pay the government $16bn (£11bn) in a suspected fraud, according to an official audit.

The Nigerian National Petroleum Corporation (NNPC) provided no explanation for the missing funds, the auditor general told MPs.

Oil revenue accounts for two-thirds of the government's funding.

A separate audit ordered under former President Goodluck Jonathan and carried out by global accountancy firm PwC, found that the NNPC had failed to pay the government $1.48bn between January 2012 and July 2013.

It did not provide a total figure for how much revenue the NNPC should legally have handed over to the treasury.

However, the company said that it could not vouch for the integrity of the information it was given when it conducted the audit.

Oil addicts withdrawal symptoms

Falling oil prices are threatening several countries on the African continent.

 “The high debt overhang and the heavy reliance on raw materials (such as oil) and minerals for exports, makes African economies susceptible to shock and systematic risks,” Dr. Kwame Akonor, from the African Development Institute said. According to Akonor, the heaviest toll will be paid by Nigeria, the largest economy in Africa, which depends on oil for about 80 percent of its total revenues.

Algeria, Equatorial Guinea and Gabon will also suffer significantly from the plummeting oil prices, as these economies are also heavily dependent on oil revenues.

Ghana's president announced earlier this week that infrastructure plans could be scaled down due to the budgetary price of oil and the current fall. An article published by the Brookings Institutions shows that countries like Cameroon, South Sudan and Chad had drafted their budgets assuming record-high prices of over US$100 per barrel.

According to the Financial Times, conflict-stricken South Sudan is now receiving the lowest oil price in the world at US$20-25 a barrel because of the combination of falling prices and unfavorable pipeline contracts.

Several Western oil giants are halting ambitious exploration and exploitation projects throughout the region until oil prices recover.

Tanzania's Oil Curse

In the southern village of Mikindani in Kilwa district, Tanzania , the Songo Songo gas discovery resulted in electrification in this village - but only for the lucky, wealthy few.

Ishmail, a resident of Mikindani, a neighbouring port 10km south of Mtwara, wishes he could benefit from the gas discoveries. "We are mostly sesame and cashew farmers, or at least most of us would be if we had work. Unemployment here in Mikindani is a massive problem. Only eight to 10 percent of us work, and we are desperate," says Ishmail. "What does a person need? Health, a happy family, a home, food, and work. We don't have that, or clean water. Our problem is that the government, over 650km away in Dar es Salaam, has abandoned us … The gas will be exported to other areas, and here we will still be left without the basics."

Congo's pain

What is happening in eastern DR Congo is not a civil war, but continuation of a 16-year aggression by the country’s two neighbours. 

The African region which includes Uganda, Rwanda and the Democratic Republic of Congo has been in virtually a state of war since 1995; that is at war with each other. This has engaged the national armies, foreign armies, militias, ‘civil defence’ groups, looters, pillagers, child abductors and abusers, rapists, arsonists and murderers. One can add to this list of villains and plunderers the United Nations so-called Peacekeepers. 5 million Congolese have died. Many of these deaths were due to starvation or disease that resulted from the war, as well as from summary executions and capture by one or more of a group of irregular marauding bands. Millions more had become internally displaced or had sought asylum in neighbouring countries.These wars, centred mainly in eastern Congo (North and South Kivu and Maniema) have involved nine African nations and directly affected the lives of 50 million Congolese.

Initially these wars and the pillaging associated with them derived from the efforts to profit from the valuable mineral resources of the Eastern Congo, coltan and diamonds. Now the current targets of their looting – the oil and gas industries. In 2009 Heritage Oil discovered oil in Uganda. The oil and gas industries in East and Central Africa have been the world’s most important area of exploration in the last nine years. Africa is the main continent in the world with frequent and substantial new findings of oil and gas. A joint report by the African Development Bank, African Union and the African Development Fund observed that oil reserves in Africa grew by over 25 per cent, while gas has grown by over 100 per cent since the late 1980s. There have been major finds in Kenya and has become the latest African country to join the great African oil boom. In May 2012 Kenya announced its second profitable oil discovery in two months; and large oil deposit in the remote northern Turkana region.

Unfortunately the good fortune has only brought war and destruction in its wake. The Uganda finds in the Albert Graven were located in the seabed of Lake Albert. The border between Uganda and the Democratic Republic of the Congo (‘DRC’) runs down the middle of the lake. Uganda wants all the oil and has been funding the various insurgencies to control all the oil and gas of the lake. Perhaps the most contentious and conflicted result of the oil and gas finds in the region has been the Vanoil of Canada’s success in finding oil beneath Lake Kivu. Vanoil holds exclusive exploration rights to the 1,631 sq. km oil and gas concession in the north-western part of Rwanda better known as the East Kivu Graben. The Kivu Graben area is part of the great East African Rift System and is approximately 90 kilometres wide and 200 kilometres long. The Graben straddles both Rwanda and the Democratic Republic of the Congo and is the Southern extension of the Albertine Graben in Uganda where major oil discoveries have been made by Tullow Oil and Heritage Oil.

In March 2007, when the governments of the DRC and Rwanda met with the assembled lake experts and developers at Gisenyi on the northern shore of Lake Kivu, an initiative commenced to define the rules and regulations of safe and environmentally sound exploitation of Lake Kivu's gas reserves. Rwanda seeks to alter this by taking control of the other side of the lake. It has recently taken over Goma through its M23 surrogates and plans to exploit the oil reserves with Vanoil and to seek a competent gas partner for the buried methane. The M23 rebels have announced that they were going to take over the entire DRC. The root of much of the difficulties lies with the fact that the current DRC President, Joseph Kabila is weak, vacillating and bereft of the support of a united nation. That weakness has alienated many in the national army. The countries which supported the DRC in its last war against the Ugandan and Rwandan invaders may well intervene again. The citizens of the DRC have suffered grievously. Their future looks no better.

From here

Kenya - the oil curse arrives

Although just a few hundred kilometres from Nairobi, the county of Turkana feels more like a million miles away from the gleaming skyscrapers and concentrations of power and money found in Kenya’s capital. Locals speak of “Kenya” as if it were an entirely different country and of “Kenyans” - or “the people with long trousers” - as if they were foreigners.

Turkana’s socioeconomic indicators do indeed set it apart. More than 96 percent of its predominantly pastoralist population are categorized as poor, the highest proportion in the country. Turkana also trails near the bottom of national leagues in terms of employment, literacy and healthcare spending.  Only 39 percent of the youth aged 15-18 in Turkana attend school, compared to the national average of 70.9 percent. With climate change, cattle-raiding and agricultural development the viability of the pastoralist livelihood is eroded.

Newly-confirmed oil reserves are set to go on stream in the next few years. “Until recently many people did not know what oil as a resource means. Most of them were asking if water could instead be drilled for them,” said Lokichar resident Robert Kamaro.

“Oil is being seen as a ladder to help the people go up,” said Christopher Ekaru Loskipat, coordinator of the Catholic Peace and Justice Commission (CPJC) in Lodwa “When the companies come here, the local people expect employment. If this is not done, we are anticipating conflict. What will the government trickle down as the benefit to the community?”

But according to oil industry analyst Antony Goldman, no major jobs bonanza is on the horizon. "Typically oil is capital- rather than labour-intensive: unlike mining, it does not yield many unskilled or semi-skilled jobs,”

“The government needs to build schools for our children, drill boreholes. We believe that we will benefit, especially the vulnerable,” Simon Esekwen, who lives close to Lokichar.

Rather, the real impact of the oil find will be on land prices and government revenue.

Joseph Elim, coordinator of Riam Riam, a local NGO said, “I heard some people ask, `What will happen to pastoralists?’ or `Will they deport us to Sudan?’ There is a need for information to counter the alarmists. The people are saying: `We do not want people with long trousers coming here because they have colluded with those who have sold the land’." People in Turkana are also worried about being left out of any appreciation of land prices that are likely to arise from development of the oil field. Land in the county is communally owned, and managed by the county council. “When the oil was found, people started saying, `Now we are in Kenya, good things are coming out of this place’. But coming from a pastoral community that did not attach monetary value to land, now they wonder: `What about this whole mass of land that investors are going to be interested in’?”

“Here we do not have title deeds, people live without documents,” said the CPJC’s Loskipat. “The situation will be threatening for those without land documents and some people may capitalize on this. There is a possibility that at the end of the day the vulnerable will easily give away their land or sell it at throwaway prices,” he said.

 For many, the very concept of individual land ownership is as alien as the “men in long trousers”. “How can you sell soil?” asked one young man in Lokichar.

Source

The Oil Curse in Uganda

In 50s, some economists suggested that natural resource-abundance would help the backward States to overcome their capital shortfalls and provide revenues for their governments to provide public goods and lift citizens out of the doldrums of poverty. However, since then, a growing number of researches have established a link between resource-abundance and a number of social and economic problems. Natural resource-abundance has been associated with slow growth, greater inequality and poverty for a larger majority of a country’s population, corruption of political institutions, and more fundamentally, an increased risk of civil conflict. At the same time, there is an established link between resource motivated conflict and economic collapse. Of all natural resources, oil has been found to have the highest risk. 23% of states dependent on oil exports have experienced civil war in any 5-year period, a figure that dwarfs the 0.55% for countries without natural resources.

Recently oil has been discovered in Uganda. Oil experts estimate Uganda’s Albertine Basin has at least two billion and as many as six billion barrels of recoverable oil, positioning Uganda to become one of sub-Saharan Africa’s top oil producers and potentially doubling current government revenues within 10 years. The resource could become Uganda’s curse rather than a blessing. In Uganda the agriculture and fishing sectors provide approximately 80% of employment. Uganda is Africa's second-leading producer of coffee, which accounted for about 23% of the country's exports in 2007-2008 and 17.9% in 2009. Exports of nontraditional products, including apparel, hides, skins, vanilla, vegetables, fruits, cut flowers, and fish, are growing, while traditional exports such as cotton, tea, and tobacco continue to be mainstays. Most industry is related to agriculture.

Most of Uganda’s known oil reserves are located along Lake Albert and the D.R.C. border, in one of Africa’s most ecologically sensitive areas. Wildlife based tourism and scenery dominates Uganda’s hospitality industry with more than 70% of the visitors coming to the Albertine rift. Incidents of land grabbing and migration towards oil sites are already taking place. Many multinational companies backed by their foreign “interest”, are already scrambling for oil exploration in Uganda. Lukoil, for example is Russia’s largest oil company, and the second largest private oil company worldwide by proven hydrocarbon reserves, with about 1.1 per cent global oil reserves, and 2.3 per cent of global oil production. Interesting question to ask; what are the implication of this to “little” Uganda? The same oil will be sold back to Uganda at a higher cost and additionally employment opportunity will be limited since most of its exploration and production activity is located in Russia. The higher costs of fuel are then reflected in the hiking costs in transport sector which in turn is shifted to the public in terms of high commodity prices, and the costs of environmental management (Pollution) should be noted.

it’s important to acknowledge that the existing conflicts are real and that small conflicts may escalate. This is true with the current conflicts in Uganda. The conflicts include: scrambling over land, multinational companies scrambling over oil exploration licenses, and associated consequences like corruption, contracting a monopoly or medium firm which may use sub-standard materials, political tensions which may explode into violence and creating ethnic and cultural differences, propaganda, migration of wildlife, and environmental threats such as clearing forests, digging of trench during survey.

From here

Oil Pollutes Nigeria

Oil was first drilled commercially in Africa in Oloibiri in the Niger Delta, in 1956 by the Anglo-Dutch oil giant Shell. The International Energy Agency says Nigeria holds 37 billion barrels of reserve oil (Norway which has just 6 billion.) Despite its oil wealth, Nigeria has to import 60% of its own fuel because of a lack of domestic refining capacity and power blackouts are common.

Nigeria's Ogoniland region could take 30 years to recover fully from the damage caused by years of oil spills, a long-awaited UN report says. Ogoni communities have long complained about the damage to their communities, but they say they have mostly been ignored. Communities faced a severe health risk, with some families drinking water with high levels of carcinogens. The study says complete restoration could entail the world's "most wide-ranging and long-term oil clean-up".

"In at least 10 Ogoni communities where drinking water is contaminated with high levels of hydrocarbons, public health is seriously threatened," the UN Environmental Programme. Some areas which appeared unaffected were actually "severely contaminated" underground. In one community families were drinking from wells which were contaminated with benzene, a known carcinogen, at 900 times recommended levels.

Shell has accepted liability for two spills. The report, based on examinations of some 200 locations over 14 months, said Shell had created public health and safety issues by failing to apply its own procedures in the control and maintenance of oilfield infrastructure. The oil industry is accused of a sharp double standard in its operations - of taking advantage of Nigeria's lack of environment law and weak regulation. According to the Nigerian government, there were more than 7,000 spills between 1970 and 2000. Environmentalists believe spills - large and small - happen at a rate of 300 every year. Says Kingsley Ogundu Chinda, environment commissioner in Rivers State,"I blame the owners of the facilities. They are economical with the truth. They are not sincere in their practice. They are not sincere with the people."

Amnesty International, which has campaigned on the issue, said the report proved Shell was responsible for the pollution. "This report proves Shell has had a terrible impact in Nigeria, but has got away with denying it for decades, falsely claiming they work to best international standards," said Audrey Gaughran, Amnesty's global issues director, said.

70% of Nigerians live under the poverty line and the country has consistently been ranked among the most corrupt on earth by international observers.

Troubled Water - book review

Crude World. By Peter Maass.
The delta of the River Niger is an enormous wetland, once a flourishing ecosystem with a wide range of life forms. But now it is not a wildlife sanctuary: rather it is a horrendous landscape of ruined villages, devastated populations and roving armies. The reason for this is simply the delta’s vast oil reserves and the prospects for wealth and power that these entail.

This is but one clear example of the ‘resource curse’, which states that countries dependent on the export of resources such as oil are susceptible to more corruption and warfare but less freedom or economic growth. In this enlightening book, Peter Maass surveys a number of cases and shows how oil rarely produces benefits for those who live in the places where it is found.

In Equatorial Guinea, for instance, the discovery of offshore oil led to enormous riches for the dictator-president Teodoro Obiang. Few local workers were employed in the exploring and drilling work, and massive profits were made by American companies like Exxon. The US government, and various lobbying groups, played their part in supporting Obiang and keeping him friendly to American business. This is particularly important as Chinese companies start flexing their own oil-producing muscles.

In Ecuador Texaco was able to do more or less as it wished, since the officials of the newly-formed state oil company knew next to nothing about oil. The natural gas that came to the surface with the oil was just burned off, which can be deadly for both people and environment. Rivers and land have been contaminated and the government left with massive debts.

The profits, of course, go to the oil companies and their owners. Lee Raymond received $686 million for his thirteen years as chief executive of Exxon-Mobil, while billions went to share-holders. As Maass points out, oil companies in fact do not ‘produce’ oil, they simply take it from the ground. Extracting, purifying and transporting oil are complex tasks (performed by skilled workers), but selling oil to realise the profits is not difficult. What is needed in the first place is a licence from the local government to explore and extract oil, which is why the oil industry is usually rife with corruption and works closely with diplomats and generals to ensure this kind of access.

So a substance used to provide fuel and warmth also causes wars and destroys the environment. Inevitable consequences of a world that belongs to a privileged few and is driven by profit.

PB

oil curse

Sao Tomé and Principe is the smallest countries in Africa, with a population of only 175 000 on its two volcanic islands. With a per capita GDP of $1 700 in 2009 it is not one of the poorest nations in Africa, but the wealth is unevenly distributed: 54% of the population lives below the poverty line and 15% in extreme poverty.

Now the Sao Tome government is getting ready to award the first contracts to exploit seven oil blocks in the waters off the island's shores with estimated reserves of about ten billion barrels. Interested companies include Chevron, ConocoPhillips, Petrobras and Tullow Oil. The oil deals give no cause for optimism. There were irregularities in procedures, political manipulation, insider trading and nepotism. Concerns about irregularities in Sao Tomé have already led to the country's de-listing from the Extractive Industry Transparency Initiative. The Human Rights Watch report warns that if the new government does not use the oil wealth for social ends, it risks suffering the unenviable fate of its neighbour to the south, Equatorial Guinea, where abundant oil wealth goes to a happy few, and most people still live in poverty.

The Looting of Africa

In terms of natural resources, Africa is the most abundant continent on earth.

BP has stated that Africa holds 127 billion barrels of untapped oil, almost ten per cent of global reserves.Oil was first drilled commercially in Africa in Oloibiri in the Niger Delta, in 1956 by the Anglo-Dutch oil giant Shell. There are now ten oil exporting nations in Africa, with another three soon to join that list.

There are ten major diamond producing nations in Africa, the largest being Botswana, where the industry is worth $158bn a year.Diamond production remains a major source of revenue for Africa. In Sierra Leone, income from the diamond trade rose by a quarter to $35m in the first six months of the 2010.

Coltan or "colombo-tantalite ore" is a mineral used to make electric capacitors in computers, gaming consoles and mobile phones. One of the world's largest reserves is in the Democratic Republic of Congo.

But rather than a blessing, most of Africa's commodities have proved a burden; allegedly stoking conflict, funding wars and leading to rampant labour market abuse.

Africa's largest single oil exporting nation is Nigeria. While no official figures exist, Standard Bank estimates the country has made $6 trillion in oil revenue over the last 50 years. The International Energy Agency says Nigeria holds 37 billion barrels of reserve oil, dwarfing that of Norway which has just 6 billion. Yet 70% of Nigerians live under the poverty line and the country has consistently been ranked among the most corrupt on earth by international observers.Despite its oil wealth, Nigeria has to import 60% of its own fuel.

The portability and high value of diamonds have made them a favourite source of funding for rebel groups across the continent. Angola, Congo and the Cote D'Ivoire have all been subject to the trade in so called "blood diamonds"..During the brutal 10 year civil war in Sierra Leone, the diamond mines in Kono were controlled by the rebel RUF forces, led by Foday Sankoh. Diamonds smuggled from the region were allegedly passed on to Charles Taylor, president of neighbouring Liberia, who in turn helped arm the rebel movement.Diamonds from blacklisted countries like Zimbabwe are still routinely being traded on the international market.

Most of the coltan mines in the DRC are in the remote South Kivu district. In 2001 a report by the United Nation Security Council claimed that rebel forces, regrouping in the country after the Rwandan genocide, had taken control of the mines and were using coltan to fund their operations, often using forced or child labour. These groups included the CNDP, a Tutsi rebel force led by General Laurent Nkunda, and the Democratic Forces for the Liberation of Rwanda, a Hutu rebel group responsible for the Rwandan genocide of 1994, which had the backing of the Congolese government under President Mobutu.The report concluded that the DRC was suffering a "systemic and systematic" looting of natural resources, with the CNDP alone raising $250m over 18 months by selling coltan.A follow up report by the UN in 2008 claimed the looting of the mineral in the DRC was still rife. Rwanda is estimated to have made $19m from coltan sales in 2008, a rise of 72% on the previous year, even though no coltan is mined within Rwandan borders.

The Robber Oil Barons

With the promise of new oil production in the near future both the Ugandan government and the oil companies involved have been busy painting a rosy picture of bumper revenues and a country transformed. We are promised that Uganda will be turned into a middle-income country by $2bn a year in hard cash.The truth , however , remains that Uganda's oil production sharing agreements point towards a resource extraction programme designed for company profit, not country development.The campaigning group PLATFORM published three of the production sharing agreements the government has spent years keeping a closely guarded secret and contain a series of provisions that undermine any hope of changing course.

The international oil companies, including Tullow Oil, backed by a $1.4bn loan arranged by the Royal Bank of Scotland, and Heritage, run by former mercenary Tony Buckingham are set to reap huge sums at Lake Albert - as much as a 35% return on their capital investment. That's three times what's internationally recognised as a fair profit.The oil contracts are structured so that price risk lies primarily with the state, while the private companies are virtually guaranteed a healthy return even if the market slumps. As the oil price rises, investors will make a higher and unlimited profit, taking close to one quarter of oil revenues, whether each barrel is fetching $70 or $200.The 20-year contracts, consistently weak or completely silent on human rights protection, also include a sweeping "stabilisation clause" - article 19 requires the Ugandan government to compensate the companies for any future change in the law that affects their profits - designed to militate against improvements in environmental standards.Possible future legal disputes between the two sides will not be resolved in Uganda, but in London: at the Energy Institute, whose president will pick the all-powerful arbitrator and for those in any doubt about the bias of the institution, it is currently headed by James Smith, chairman of Shell UK , another oil company mandarin.

Uganda secured one of the best deals in the world for its oil exploration according to claims by Tullow Oil , yet the Norwegian experts advising the government have expressed serious reservations: a review of Uganda's contracts commissioned by the Norwegian Agency for International Corporation in 2008 concluded that the profit-share model adopted "cannot be regarded as being in accordance with the interests of the host country".

Oil always promises growth, affordable energy and employment; from Nigeria to Angola, Sudan to Equatorial Guinea and Gabon, it has delivered only poverty and repression in Africa.While increased oil revenues give the impression of superficial growth, the sudden influx of cash distorts the economy and exchange rates, undermining alternative sectors, including agriculture and industry, that employ and feed far greater numbers. The ingredients for the so-called "oil curse" are all in place: contract secrecy, government corruption, commercial disinformation campaigns, with environmental protections ignored , and a simmering border dispute with the Democratic Republic of the Congo frozen rather than resolved. Lake Albert's oil is likely to prove yet another reason for the Kampala elite to ignore the struggling north and eastern regions of Uganda as the nation's focus shifts west to the oil fields. The transition to a sustainable energy economy will be put back two decades or more, while political tension will only increase.

For all the work of the country's 8,000 NGOs, the 30% budget support from donors and the rhetoric of international aid, it is these botched oil contracts and the financial interests of those oil companies that will do most to define Uganda's future.Uganda will not be transformed into a new Norway.

chad and the oil curse

From here

The discovery of oil in Chad was supposed to allieviate poverty and human suffering, but it's only enriched Western Oil companies and the local dictators. For Chadian President Idriss Deby, oil revenues are a means to prolong abusive and undemocratic rule. He changed the constitution to become president for life, used over 30% of Chad’s oil revenues on war, and used money destined for development in “priority sectors” to grant opaque, no-bid public contracts to god knows whom -- all things he promised not to do. Many promises were also made to people living in the oil-producing zone in the southwest of Chad. Villagers were promised fair compensation for the loss of land expropriated by Exxon, employment with the oil companies for the life of the project, and 5% of oil revenues to be invested in their villages. According to local residents, these promises were empty.

Chad spent 4.5 times more money on the military than it did on health, education, and other social spending combined. Despite the World Bank’s guarantee of a model framework for oil-led development, oil has continued to fuel war where civilians are the primary victims.The oil for war and war for oil reality is deeply ingrained in Chad’s popular political consciousness.

Bluntly put, oil in Nigeria, Equatorial Guinea, Gabon, Congo-Brazzaville, Cameroon, Chad, Angola, and Sudan has further impoverished people at best and caused inestimable human suffering in many cases.The extractive industries almost never contribute to development.

USA picky and choosey about corruption

From the pages of The New York Times we read " Several times a year, Teodoro Nguema Obiang arrives at the doorstep of the United States from his home in Equatorial Guinea, on his way to his $35 million estate in Malibu, Calif., his fleet of luxury cars, his speedboats and private jet. And he is always let into the country.The nation’s doors are open to Mr. Obiang, the forest and agriculture minister of Equatorial Guinea and the son of its president, even though federal law enforcement officials believe that “most if not all” of his wealth comes from corruption...despite a federal law and a presidential proclamation that prohibit corrupt foreign officials and their families from receiving American visas. The measures require only credible evidence of corruption, not a conviction of it. "

Former and current State Department officials said Equatorial Guinea’s close ties to the American oil industry were the reason for the lax enforcement of the law. Production of the country’s nearly 400,000 barrels of oil a day is dominated by American companies like ExxonMobil, Hess and Marathon.Since oil was discovered there in 1996, Equatorial Guinea has become the third-largest oil producer in sub-Saharan Africa, after Nigeria and Angola, with estimated revenues of $4.8 billion in 2007. But although petroleum has made the ruling Obiang family and its associates vastly rich, the oil and gas wealth has not been spread beyond ruling elites.

“Of course it’s because of oil,” said John Bennett, the United States ambassador to Equatorial Guinea from 1991 to 1994, adding that Washington has turned a blind eye to the Obiangs’ corruption and repression because of its dependence on the country for natural resources.He noted that officials of Zimbabwe are barred from the United States.“Both countries are severely repressive,” said Mr. Bennett, who is now a senior foreign affairs officer for the State Department in Baghdad. “But if Zimbabwe had Equatorial Guinea’s oil, Zimbabwean officials wouldn’t still be blocked from the U.S.”

Justice Department memorandum, dated Sept. 4, 2007, and obtained by The New York Times, said the government believed Mr. Obiang’s assets were derived “from extortion, theft of public funds or other corrupt conduct.” From April 2005 to April 2006, the memorandum said, Mr. Obiang funneled at least $73 million into the United States, using shell corporations and offshore bank accounts to launder the money and ultimately buy his Malibu estate and a luxury jet.The document identified several wire transfers by Mr. Obiang from 2005 and 2006, beginning with a bank in Equatorial Guinea, then going to the central Banque de France and landing in American accounts at Wachovia, Bank of America and UBS. In one six-week period in 2006, Mr. Obiang transferred $33,799,799.99 to the United States, it said, which was used to buy a Gulfstream V jet.Part of his wealth, the document said, comes from a “revolutionary tax” that Mr. Obiang placed on timber. Instead of sending the payments to the treasury of Equatorial Guinea, Mr. Obiang, who is considered likely to be a successor to his father, has “insisted that the payments be made directly to him,” it said.The memorandum said, the Justice Department believes that Mr. Obiang “may be receiving bribes or extortion payments” from the oil companies as a percentage of their contracts.
In 2004, a Senate panel accused Riggs Bank in Washington of having “turned a blind eye to evidence suggesting the bank was handling the proceeds of foreign corruption” in accepting hundreds of millions of dollars in deposits from Equatorial Guinea.In 2006, more than three-quarters of the population was living below the poverty line.

“There are many instances of corrupt foreign officials plundering the natural resources of their countries for their own use while their people starve,” Mr. Leahy ,the Vermont Democrat who wrote the law restricting visas, said. “The law states clearly that if you do that, you are no longer welcome in the United States.”

Unless you control access to oil wells , that is !!

from theory to practice

As first previously reported on Socialist Banner here ,it now appears that capitalism will be exploiting Africa's geography .A sustainable energy initiative that will start with a huge solar project in the Sahara desert has been announced by a consortium of 12 European businesses.

The Desertec Industrial Initiative aims to supply Europe with 15% of its energy needs by 2050 and hopes hopes to start supplying Europe with electricity by 2015. Companies who signed up to the $400bn (£240bn) venture include Deutsche Bank, Siemens and the energy provider E.On. The initiative has gained the support of the German government of Angela Merkel, who has already expressed a desire to offset a dependence on Russian gas supplies.

Desertec Industrial Initiative aims to produce solar-generated electricity with a vast network of power plants and transmission grids across North Africa and the Middle East. The first stage will be to build massive solar energy fields across North Africa's Sahara desert, utilising concentrated solar power technology , which uses parabolic mirrors to focus the Sun's rays on containers of water. The super-heated water will power steam turbines to generate electricity 24 hours a day, 52 weeks of the year.The electricity will then be transported great distances to Europe, using hi-tech cables that suffer little conductive loss of power.

Socialist Banner notes that Desertec is keen to stress some of the power generated by the Sahara solar energy fields will also be used by domestic African consumers. However, with the little or no benefit going to local people from those countries gifted with oil resources , we cannot be blamed for an element of scepticism . We readSouth Sudan's semi-autonomous government has received nearly $7bn (£4.2bn) in oil revenue since it took over after a 2005 peace deal, but many question whether it is doing enough for its people.
"They say they are building new roads, but I think the ministers just pocket the money." says Akot, the driver .
"Misuse of public funds, favouritism in hiring and the existence of ghost names on government payrolls are examples of corruption that plague government offices," says the National Democratic Institute for International Affairs

There exists a viable alternative to capitalism as a world system of production for profit and uncontrolled and uncontrollable capital accumulation? It's where all the productive resources of the Earth have become the common heritage of the people of the world—"make the Earth a common treasury for all", as Gerrard Winstanley put it —so that they can be used, not to produce for sale on a market, not to make a profit, but purely and simply to satisfy human wants and needs in accordance with the principle of, to adapt a phrase, "from each region on the basis of its resources, to each region on the basis of its needs".

Chad - Oil Curse strikes again

The curse of oil continues . In a supposedly ground-breaking agreement with the World Bank Chad was expected to use its oil revenues to benefit its peoples .

Alas the World Bank has cancelled an oil pipeline deal with Chad after a dispute with the government over failed pledges to use profits to tackle poverty. The bank said Chad had also failed to use revenues on health and education.

Instead the government had tapped more of the oil profits for military spending. Also President Idriss Deby over the past year has signed several decrees handing him personal control over the landlocked oil producer's finances and circumventing World Bank attempts to ensure a large share of oil profits go to social spending.

The bank had been warned by local and international development groups that the pipeline project had little chance of reducing poverty, said Ian Gary, senior policy advisor for extractive industries at Oxfam America.

Socialist Banner is not surprised .

Chinese imperialism at work again

For centuries Africa has failed to gain much benefit from its enormous mineral deposits; they were plundered by colonisers and during wars.

A multi-billion dollar oil deal between China and the west African state of Niger has been denounced by unions and transparency campaigners.
Civil rights groups in Niger are calling for a parliamentary inquiry into the $5bn (£2.5bn) contract and for scrutiny of how funds will be spent.
China's state oil company was given oil exploration rights in Niger in June.
There is widespread concern that the people of Niger will not benefit from the country's oil wealth.

A mining union in Niger said the deal with China took place in the greatest of secrecy and with contempt for regulation.
It is not easy changing the way such deals are struck - political and business elites often have a vested interest in avoiding transparency.
Even when a company or investor wants to disclose the details of a deal, it risks losing its license to a less scrupulous competitor.
There are plenty of examples where governments have failed to do business in the interests of the people they serve.

Mozambique , will the oil curse strike again ?

I read here

The rights to Mozambique's minerals, including heavy metals, coal, natural gas and possible oil reserves have been auctioned off to multinational companies at a rapid rate in recent years.
In the past five years alone, South African company Sasol has begun exporting natural gas from Inhambane Province; Kenmare, the Ireland-based firm and South African company Corridor Sands are mining titanium deposits in Gaza Province, about 200km north of the capital, Maputo, and an array of companies from the United States, Brazil, Canada, Norway, Italy and Malaysia are prospecting for oil reserves .
According to estimates by the government's Ministry of Planning and Development, even small reserves of oil would increase total annual exports from US$6.5 billion to more than US$10 billion by 2020; if the finds are more extensive, total export values of US$60 billion annually are being predicted.

A study, "Exploring Natural Resources in Mozambique: Will it be a blessing or a curse?", released in June 2007 by the planning and development ministry, summarised concerns using data from other countries rich in mineral resources. It found that, on average, the relationship between natural resource wealth and GDP growth was negative. It also determined that natural resource wealth has no demonstrable relationship to a population's overall wellbeing as measured by the United Nation's Human Development Index . Angola, Nigeria, Equatorial Guinea and Sudan vast oil reserves have failed to improve the livelihoods of the majority of the inhabitants. Known as the "natural resource curse", the negative effects of mineral wealth on a country's population are legion: it can inflate the local currency, making other enterprises less competitive in the international market; fluctuations in the price of oil, gas and minerals create a volatile exchange rate that often discourages foreign direct investment; mineral revenue windfalls also have a tendency to encourage poor government policy and increase foreign debt.
Socialist Banner has previously reported the "Oil Curse" here and we are not surprised by this report's findings .

"Resource revenues may contribute to myopic behaviour and irrational expectations on the side of the government, leading to accumulation of debt with resource stocks as collateral," the study noted.

Academic NuSpeak for capitalist greed and corruption .