Page 3 of
3 Titans make Africa their
stomping ground
By Bright B
Simons, Evans Lartey and Franklin Cudjoe
abundant Nigerian gas in the
turbulent Niger River Delta to consumers in Togo,
Benin and Ghana on the West African coast.
The project may, according to its
proponents, also stem Nigeria's wasteful
gas-flaring, in which for want of technical
capacity natural gas is not separated from liquid
crude but simply combusted. Capping of gas-flaring
is another recommendation made by American experts
with an interest in how US oil policy on the
continent evolves. Their concern is of course not
solely from care
for
the environment, but perhaps more about efficiency
- to the benefit, naturally, of America's oil
majors. The US firm ChevronTexaco is the leader of
the consortium constructing the pipeline, to be
partly financed by the World Bank.
Clearly, the US sees its present technical
superiority over China as an advantage in the
battle for concessions, whether in Africa or
elsewhere. This is perhaps why China does not balk
at paying billions of dollars for
less-than-controlling stakes in giant oilfields,
as it recently did in Nigeria when the China
National Offshore Oil Corp (CNOOC) paid US$2.3
billion for a stake in offshore blocks.
While it is perhaps true, as many analysts
suspect, that in this case President Olusegun
Obasanjo of Nigeria may have taken several
political considerations into account, not the
least his displeasure over America's overt
opposition to his bid for a third term in office,
in deciding to sideline several Western majors in
favor of CNOOC, China cannot continue to rely on
expensive political diplomacy (it also agreed to
fund a railway project with dubious financial
viability around the same time).
More and
more, field-leading technology in
three-dimensional seismic, satellite-sonar
conjunctive techniques, horizontal drilling, and
advanced offshore deepwater simulation framing
will be vital to demonstrating advantage over
rivals, particularly in places like Africa where
oil resources are diffuse and likely to be more so
in the mid-term future. There is no indication
that China isn't aware of this. Chinese oil firms
are investing heavily in research and development,
and their technology subsidiaries, such as
Sinopec's Research Institute for Petroleum
Processing, are beginning to earn the respect of
the community.
What better approach to
adopt in expanding capacity in both downstream and
upstream processes than to acquire stakes in
massive projects that require marked technical
sophistication? And given the cutthroat
competition in the Middle East and increasingly in
Latin America, doesn't Africa, designated a "swing
production region" by experts, offer sound
alternative prospects in global capacity deepening
for one's ambitious budding oil multinationals?
But it is exactly this point that renders
the notion of a bitter, bare-knuckles fight
between the US and China untenable. The
globalization of China's oil industry is
ultimately what has sent such companies as CNOOC
into Africa. That globalization entails, compels
and expresses recognition of the international
capital system. Regardless, the sound and fury of
geopolitics and international capital will always
band together.
If African leaders believe
that the most sophisticated energy-development
policy they can deliver is to play China against
the West (read: the US), then they are sorely
mistaken. In the same way that rivalry between
Britain and France translated only into healthy
competition between Elf and British Petroleum
(before their respective mergers even further
complicated matters), the current field of
multinationals from China and the US, even if it
is not so obvious now, are likely to view the
situation in Africa as presenting a common/mutual
risk-challenge, and therefore to seek areas of
collaboration even as they indulge in rigorous
competition.
Lest we forget, it is barely
three decades ago that Western Europe was
consuming 80% of African oil while the United
States made do with 20% and China, a net exporter,
bought 0%; the global commodities scene changes at
remarkable speed.
Take the events of last
April for instance. Nigeria's best-organized and
public-relations-savviest Niger Delta-based
militant group warned China that by investing in
"stolen" resources it was placing its citizens in
the "line of fire". Clearly, it will be foolhardy
for Chinese operators such as CNOOC to assume that
this is an idle threat just because China is
supposedly the current flavor of the month in the
presidential palace at Abuja.
The more
prudent course of action for them will be to
envisage a collective security shield around the
delta for all multinationals. In this, and in
several prospective scenarios, China's energy
interests will converge with the West sooner than
most analysts anticipate. Unless, of course, China
retreats from global capitalism, there is little
doubt that anything significantly different from
the competition that exists within the Western
energy-capital complex will emerge between Chinese
and Western (read: US) African oil interests.
To that extent, short-term incidents like
China's decision to assist Angola in thwarting the
Western agenda of the International Monetary
Fund/World Bank for concessionary access to
Angola's oil resources (which have overtaken Saudi
Arabia's as a source of raw material for Chinese
refineries) are just that: short-term. In the long
term, Angola will have to pay its debts, and
Chinese investors will need a good return on their
investments, otherwise they will switch to the
next hot thing, maybe Canadian or Australian oil
shale.
Simply put, Africa's concern should
be about how it builds internal capacity to
understand international capital, political risk
management and industrial technology, as they
relate to the oil industry, so as to leverage all
its advantages comprehensively in the global
energy markets.
For obvious reasons, it is
good that African policymakers spend time divining
the implications of Africom, counter-responsive
Chinese equivalents, and how these intersect with
the energy security of China and the US. But if
the intention is to use the resulting knowledge to
play China against the US, or vice versa, rather
than to maximize Africa's opportunities to develop
a modern, highly efficient energy-security system
of its own, then the exercise, like the
continent's active participation in the Cold War
of yesteryear, will leave Africa once more
swindled out of hope.
With everybody else
laughing all the way to the bank.
Bright B Simons is an adjunct
fellow at the Center for Humane Education (Imani).
Evans Lartey is director of development at
Imani, which is a think-tank based in Accra,
dedicated to researching economic trends to glean
practical public-policy insights for the benefit
of government, business and civil society in
Ghana. Franklin Cudjoe is the executive
director of Imani.
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