The Oil Politics Essay
The Oil Politics
The controversy over oil has been raging for quite a while. It has played into the international politics and the politics of terrorism. The Middle East is the most volatile area of the world at present. Israel is viewed as a satellite of the United States located in the Arab world to represent the superpowers interests in the region. Incidentally the Middle East is a region endowed with oil, a precious commodity sought after by every government. The main occupation and foreign exchange earner for these countries is therefore oil and petroleum products with which they use as a bargaining chip in the global arena.
The current fluctuation in the price of petroleum around the world is a cause of worry. Some analysts are leveling blame on the oil producing countries claiming they have deliberately raised the oil prices. On their side, the countries have refuted the allegations instead blaming the rise to private entrepreneurs who hoard the commodity with the hope that prices would increase even further. Apart from the Middle East, North Africa has got also oil deposits. Coincidentally the region is also dominated by Arabs, who have formed grouping the organization of petroleum exporting countries OPEC.
As importers complain of the rising oil prices, oil exporters celebrate the economic boom as a result of the rise in prices. Their gross domestic product increases and the general standards of living appreciate. As usual with the developed world to get their hands into any opportunity presenting itself, the oil industry is attracting foreign companies into Africa to help in the exploration of oil. New exploration sites are discovered in the vast continent of Africa, especially in the north. The bedeviled state of Mauritania is so far the latest country in Africa to join the league of oil exporters after explorations proved positive results.
Since Exploration costs are damn expensive but this is not a hindrance to the exercise Africa is witnessing the largest investment in the continent ever, in the oil exploration field. Since the year 1990 more than US $20 billion has been spend on explorations around the continent and a further $50 billion is expected to have been spent by the end of the decade. Dominating the oil industry are three international companies, shell, Total and Chevron. Shell is a British Dutch consortium which invested 15% of its global exploration and production budget in the continent of Africa.
France-based Total and America-based Chevron has invested 30% and 35% respectively in the industry in Africa. The American oil company has planned for United States$20 billion to be invested in Africa for a five year period. The Gulf of Guinea is the most appropriate part of Africa at the moment attracting the different exploration companies. It is an area with deep waters. This area found in the Western Coast of Africa just at the “armpit” is suspected to be having large deposits of the precious commodity. Some oil has already been discovered within the coverage area of the Gulf but more is still to be discovered as exploration progresses.
Other sub-Saharan countries endowed with oil albeit smaller in quantities are southern Sudan and Southern Chad both under semi desert conditions. They have been producing oil and exporting in small quantities. The explorations are however taking place to find out if more can be tapped. The East Africa margin covering Kenya, Somalia and Tanzania are among targets of explorers for oil. The United States is warming up to reap from the harvest of oil and petroleum products from Africa. The country has been watching Africa from a distant making its calculations on how to have the continents oil.
Discoveries in Africa increased making headlines in the last decade. The United States predicted an increase of its oil sourced from Africa by 10% from 16% to 25% by the 2015 the year when the United Nations’ millennium Development Goals are expected to have been achieved. In a report released in December of 2000 the United States National Intelligence Council predicted sub-Saharan Africa’s raise to prominence in the global energy markets. The council is a consultant for the central Intelligence Agency. If the predications come true, then the continent would be ahead of Saudi Arabia in terms of oil export to the United States.
In close relation to this, the United States Vice President Dick Cheney formed a taskforce to compile a strategic report on oil. The report finalized by stating that West Africa will soon be among the fastest growing sources in the world in production of oil and gas for the United States (Basedau) As stated earlier, the United States receives around 16% of its oil from Africa a figure is expected to increase to 25% in 2015. at the current consumption rate the United States feels there is due need to increase oil energy inputs.
This, the National Security strategy notes will be achieved by the United States strengthening its ties with the continent. In an effort for the United States achieving its dream it plans to invest in democracy crusades to strengthen the political systems in prospective source countries of oil. This is time as some of the target areas are marred by violence a situation that may make it difficult for exploration and transportation of oil. Examples in this case are Nigeria, a country rocked by a rebellion in the Niger Delta where oil is mined. The rebellion is led by people complaining of unfairness in the way resources are distributed.
Chad is also facing the same problem with so many attempted coups, necessitating intervention by France to bring order and due process. Southern Sudan is equally bedeviled by the political instability problems. Of late, the Southern Sudanese leader Omar Hassan El Bashir has been recommended for arrest by the international criminal court prosecutor Moreno Ocampo for committing acts of genocide among other crimes against humanity. The fact that oil is in Southern Sudan a section that is demanding its independence from the mainland is a sign of worse times to come.
This explains why the United States is busy pushing for a democratic regime in the region. On the 17th of May 2001 President Bush remarked on the importance of diversifying the source of energy used. He mentioned that overdependence on one source may result into a rude shock subjecting the United States to blackmail, supply interruptions and price shocks. The alternative available then remains to search for other sources west cost of Africa being in the list. Other areas are Latin America and the Caspian Sea basin (Klare, 2004).
In Africa therefore, United States is planning for Nigeria, Angola and the states within the Gulf of Guinea. However the greatest hindrance for the United States would be as mentioned earlier, the political and ethnic tensions in the oil producing countries. The Delta region in Nigeria had the United States and other explores sent packing in 2003 due to the ethnic animosities and demands for more community project funding. The site produces much of onshore oil in Nigeria. The demands of these groups brought about massive vandalism of oil exploration sites causing a downsizing of Nigeria’s oil production instead of increasing.
In its commitment to tap oil from Africa, the United States has therefore opted to give military assistance to friendly regimes to help them fight the menace of the cartels and armed groups blackmailing the government. Nigeria and Angola received United States assistance totaling to three hundred million American dollars from 2002 to 2004. The Excess Defense Articles program of the Pentagon also advanced eligibility to the two countries to receive surplus arms for the same reason. The United States has also been considering establishing naval bases especially in Nigeria and the Sao, Tome and Principe Islands.
Currently the United States is supplied with oil from various countries with the highest supplier being Canada. Mexico and Saudi Arabia follow in the list in that order with Venezuela and the African country of Nigeria closing the top five list. Five to eight percent of 20 million barrels total United States demand per day is what each of these countries supply to the United States. An analysis of the 2005 oil supply to the United States puts Latin America highest at 34% of the total imports to the United States. The Middle East comes second supplying 24% while Africa supplied 19%.
Canada stood at 16% and lastly Europe and Asia exported seven percent to the United States (Kern 2006). Africa’s oil is advantageous for its lack of sulphur thus making it preferable for stringent refined product requirements. It gives it a growing share in the market for refining centers in the United States. It is estimated that the Economic Community of West African States, ECOWAS, holds 3% of the total oil reserves globally. This is to the environs of 40 billion barrels, in the West African region alone (Kern 2006). The figures provided are conservative as the total estimates proven or otherwise may be more by four percent- that is 7%.
West Africa countries the Bush Administration is targeting include- and the order remains arbitrary- Equatorial Guinea, Angola, Chad, Nigeria, Gabon and Congo. The fifth largest supplier of oil to the United States, Nigeria is the largest producer in Africa with a daily pumping of 2 million barrels. The figures also represent the quantity produced per day by Iraq before it was unilaterally invaded by the United States in March 2003. Being a member of the international cartel- the Organization of Petroleum Exporting Countries- Nigeria has to go by the policies and standards set by this grouping.
They include limiting production to a certain level subject to the world market conditions. Due to a weak political system, Nigeria, with a population in excess of 130 million people is wallowing in the miasma of corruption and bad governance. Its annual per capita income reduced substantially from US $1000 to a mere $390 in 2006 with most of the proceeds from oil finding its way into individual’s pockets. The continent’s most populous nation earned more than US $300 in 25 years to 2006 but the revenue was shared among the bourgeoisie and the political elite.
Only 1% of the population benefit effectively from 80% of the oil proceeds according to the World Bank (Kern 2006). In its recommendation, a 2005 report by the Center for Strategic and International Studies pointed out that America should prioritize explicitly the security and governance issue in the Gulf of Guinea in its foreign policy towards the continent. Titled “A Strategic US Approach to Governance and Security in the Gulf of Guinea” the report called for a promulgation of a robust and comprehensive policy for the West African region (Kerk 2006).
As a matter of strategy the United States is considering softer military interventions in the continent. Through the Pentagon’s Trans-Saharan Counter-Terrorism Initiative, the United States provides military training to some nine African countries on ways of dealing with terrorism and on how to effect regional security. The US is further planning on establishing military bases in some African countries bordering the ocean for strategic reasons. Nigeria The damning story is the bloodshed and the hostage taking in Nigeria in Ogoniland.
Hostage taking of foreigners is a way of life with the perpetrators demanding for resource control and access to oil money. The continent in general is a hotspot for oil, as east Africa is just about becoming the next oil boom for the continent, after the successful explorations in the west. In the East however, China would be the beneficiary due to proximity, the reason why it has its explorers in Kenya and Sudan. Nigeria is a strategic partner for the west. As the anchor for British and American foreign policies in Africa, the country has developed warm relations with the west.
It is the most populous country in Africa with one out of every six Africans being a Nigerian (Ghazrinian 2007). The country has a large experienced army participating in peace-keeping missions around the world. The oil in Africa has not been used to its optimum potential. It is a bad news in some countries bringing on to the continent proxy wars of the west. China for instance gets 30% of its oil from Africa (Ghazvinian 2007). Of this 10% is from the Sudan where the Asian country has been accused of supplying ammunitions to the Sudanese Government, the ammunitions which are used to terrorize the people of Darfur in southern Sudan.
The positive side of the Chinese is however, the human resource base they help build in Africa. They have participated in the development of infrastructure in Africa, as is the Angolan case where they jetted in for construction of railway line and tarmac roads with minimal conditions. Getting to the central African country of Chad, a country marred by violence and political instability. The country is in the Sahel region, twice the size of France with a 400 km-long paved road. It is among the poorest countries on earth, with the national airline having only one airplane.
Ironically, the country lacks any gas station yet it produces the commodity. Its people are languishing in hell yet the country exports crude oil through Cameroon to Europe and America. The oil is traded through ExxonMobil Company. Worth mentioning also is the fact that some of these oil producing countries have the largest gaps between the poor and rich. In fact they are gulfs, not even gaps. The rich continue flourishing out of oil proceeds with the lower cadre of society languishing in abject poverty, malnutrition, diseases and low education, and living on less than a US$ a day!
This then encourages prostitution as the effluent individual use the poor fellows as sex objects thus contributing to the spread of HIV/AIDS among other infections venereal diseases (Ghazvinian 2007). The oil factor is a cause of anarchy in most African countries. Democratic reforms are poised to increase with the decrease of oil revenues, as taxes would take up the position currently received for oil revenue. The regime has been neglecting the tax-paying middle class, concentrating instead on oil revenue thus neglecting social reforms. The case in Gabon is a pretty example.
It is only when world oil prices fell and prospects for a decline in Gabonese oil realized that the Omar Bongo regime considered the economic reforms by the Breton Woods institutions aimed at democratization. The opposition gained a voice in governmental affairs as was a rise in civil society groups. He had to limit state allocations in 1986 after facing a rear break in the oil industry (Basedau). The presence of petrol-dollars retards people’s thinking on alternative income. Banana project, for instance, has been neglected yet it can earn handsomely to the nation and entrepreneurs in particular.
Now they have left unpicked bananas as they import goodies from abroad. Sao Tome and Principe is yet another tiny African Island rocked in political instability but rich in oil resources yet to be exploited. It is facing a dilemma over how to share billions of barrels of oil reserves, offshore its territory. Anticipated are hostilities from its neighbors including the popular Nigeria. As tiny as it is, the country is so different from Africa: from its politics, society and culture. It is more European with little if any traces of African lifestyle (Ghazvinian 2007).
In a 2003 speech in Washington USA, Sao, Tome and Principe President Fradique de Menez reiterated his hope and commitment that his Island would not drown into civil war, ethnic hatred and economic regression, because of oil. Oil is instead supposed to bring more development and economic satisfaction to the population (Ghazvinian). The country is however miserably poor with only high school but without any university. Half of the capital city is occupied by government officer. The national budget sums to a meager $50 million financed majorly from agriculture and fishing.
Agricultural produce are coffee and cacao, putting the island in the list of the major recipients of direct aid relative to GDP as & 35million is received annually in the form of international development aid. The country is not strange to armed coups. It is among the African countries who political cultures are informed by armed coups. Between 1991 and 2007, the island experienced fourteen changes of guard, with more uncertainties expected in case oil would be discovered. Nigeria is on record as having help crush an armed rebellion in Sao Tome in 2003,a clean indication of its involvement in the tiny African state.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 25 October 2016
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