U.S. Oil Politics in the 'Kuwait of Africa' | The Nation


U.S. Oil Politics in the 'Kuwait of Africa'

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This article was prepared with a grant from the Fund for Investigative Journalism, with additional support from the Investigative Fund of the Nation Institute.

The Thaw

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Ken Silverstein
Ken Silverstein is a Washington, DC–based investigative reporter.

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Just a few weeks after the embassy closed its doors, several US companies found significant petroleum reserves off the coast of Equatorial Guinea. Subsequent discoveries led firms such as ExxonMobil and Chevron, as well as small independents like Ocean Energy, Vanco and Triton, to invest a collective $5 billion in Equatorial Guinea. Sweetening the deal for the oil companies is the fact that the Obiang regime gave them as much as 87 percent of the oil receipts. (That figure has now dropped to about 75 percent, but it's still far above what they get in much of the Third World, which is frequently 50 percent or less.)

As US economic interests grew, a slow political shift in Washington-Malabo relations emerged. In June of 2000, the Overseas Private Investment Corporation approved $373 million in loan guarantees for construction of a methanol plant in Equatorial Guinea, its largest program ever in sub-Saharan Africa. Two US companies--Noble Affiliates and Marathon--together hold an 86 percent share in the plant. Five months later, Louisiana Representative William Jefferson led the first-ever Congressional delegation to Equatorial Guinea, taking along representatives of Baton Rouge-based Shaw Global Energy Services. Several Congressional staffers also traveled to the country, among them Malik Chaka, a top aide to Representative Ed Royce, chairman of the House Subcommittee on Africa. "There's still a great deal of room for improvement in terms of democracy and transparency, but they are desirous of closer relations with the United States," he says. "We need to take advantage of that by working with them."

In general, though, the Clinton Administration did little to improve relations with Obiang. The primary reason, according to oil company officials, was opposition from Susan Rice, Clinton's Assistant Secretary of State for African Affairs. "Obiang began to reach out in the late 1990s to improve his image, but there was little to suggest that there was any substance to it," she recounted during a recent interview. "Equatorial Guinea was a poster child of undemocratic practices."

All independent observers of Equatorial Guinea share that assessment. Freedom House, the conservative human rights organization, lumps the country in a group with North Korea, Burma, Iraq and a few other pariahs as the world's most oppressive regimes. The State Department's human rights report states, "The government's human rights record remained poor.... The security forces committed numerous abuses, including torture, beating, and other physical abuse of prisoners and suspects."

A Bush official I spoke to said he didn't see any signs of improvement in the Obiang regime's practices, and he asserted that the Administration will not ignore human rights violations to accommodate the oil industry. "Our policy is to advance human rights and democracy," he said. "There's no trade-off here."

Despite such talk, there's been a marked if unpublicized improvement in Washington-Malabo ties since Bush took office. Last November Bush quietly authorized the opening of a new US Embassy in Malabo (one site being considered is on land owned by the oil companies), a huge victory for the Obiang regime. A well-placed government source told me that the Administration will soon remove Equatorial Guinea from a list of fourteen African nations that are barred on human rights grounds from receiving trade benefits under a bill passed by Congress in 2000. Meanwhile, the State Department has given the green light--barring unforeseen Congressional opposition--to a program under which Military Professional Resources Inc. (MPRI), a private firm led by high-ranking Pentagon retirees, will train a Guinean Coast Guard that can protect the offshore oilfields. "They do have a poor human rights record, but so did the Nazi government, and we did pretty well with Germany after World War II," says retired general Ed Soyster, a former head of the Defense Intelligence Agency who works at MPRI.

The political thaw has come in response to intense lobbying from the oil industry, which has sought to portray Obiang as a born-again reformer and, more credibly, Equatorial Guinea as a potentially huge new source of oil. "For a long time our relationship with Equatorial Guinea revolved around human rights," one oil company official told me. "That's a legitimate concern, but now that the energy picture is changing, that introduces something to balance out the dialogue."

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