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$Hsmiqf=^Wx\Uu$ es d étu l es é tud es les Governance of Oil in Africa: Governance Unfinished Business GOUVERNANCE EUROPÉENNE ET GÉOPOLITIQUE DE L’ÉNERGIE of Oil in Africa: A closer inspection of the world’s oil and gas resources,tempered by a critical assessment of their accessibility,wOuld lead many investors now focused on Russia and the Middle East to turn their attention to the Caspian Basin. But many of these oil and gas provinces are largely off limits for international Unfinished Business investors,or the investment conditions have become sO unpredictable that investors are forced to look elsewhere for the oil and gas to meet the world’s usiness increasing demand. Even if today’s economic crisis has taken the urgency Out B of today’s supply and demand balances,economic recOvery will soon reveal d the need for ever-increasing investment upstream. GOUVERNANCE EUROPÉENNE ET GÉOPOLITIQUE DE L’ÉNERGIE Other parts of the world may not hold the huge hydrocarbon resources of the Middle East,but there is considerable opportunity elsewhere. This study is 6 dedicated to sub-Saharan Africa where considerable resources have been found and more is no dOubt yet to be discOvered. Specifically,the cOuntries of nfinishe U the Gulf of Guinea have long been in the oil business and some are now in the gas business. What have the experiences in the oil and gas sectors of these ca: cOuntries been? HOw has governance evolved Over the years and why have some of these cOuntries been unable to realize the full benefits of their fri resource endOwments? A The Gulf of Guinea holds considerable promise for more oil and gas for in Edited by Jacques LESOURNE worldmarkets,but the experiences of the past decades suggest a need for il and William C.Ramsay substantial reform. Income distribution,welfare,development are not generally O the business of energy companies,but if governments dO not see to these basic requirements of their populations,energy companies will not be able to of e bring those energy commodities to the market. c n This book includes four chapters that examine how energy,governance, a corruption,income distribution,and corporate issues are linked. The IFRI program on European GOvernance and Geopolitics of Energy hopes this ern publication will shed light on the role of hydrocarbon production in Africa. v o With contributions by Benjamin Augé,Yvan GuichaOua, Jacques Lesourne, G Géraud Magrin,William C.Ramsay,Nicholas Shaxson,and Geert van Vliet. Prix: 15,50 f Diffusion: ISBN 978-2-86592-370-0 La DOcumentation française 29-31,quai Voltaire 75340 Paris Cedex 07 l es Tél. :33 (0)1 40 15 70 00 -:HSMIQF=^WX\UU: Fax:33 (0)1 40 15 68 00 é tud es www.ladOcumentationfrancaise.fr Governance of Oil in Africa: Unfinished Business Ifri, 2009 © Ifri, 2009 © Governance of Oil in Africa: Unfinished Business GOUVERNANCE EUROPÉENNE ET GÉOPOLITIQUE DE L’ÉNERGIE T OME 6 Edited by Jacques LESOURNE and William C.Ramsay les études Ifri, 2009 © The Institut Français des Relations Internationales (IFRI) is a research center and a forum for debate on major international political and economic issues. Headed by Thierry de Montbrial since its founding in 1979,IFRI is a non-governmental and non-profit organization. As an independent think tank,IFRI sets its Own research agenda, publishing its findings regularly for an international audience. Using an interdisciplinary approach,IFRI brings together political and economic decision-makers, researchers,and internationally renowned experts to animate its debate and research activities. With offices in Paris and Brussels,IFRI stands Out as one of the rare French think tanks to have positioned itself at the very heart of European debate. ڊ The Objective of the “European GOvernance and the Geopolitics of Energy” program is to promote a coherent and sustainable European energy policy through seminars,debates,and publications. This series cOvers the main aspects of the energy topic. Tome 1: Abatement of CO2 Emissions in the European Union (2007) Tome 2: L’énergie nucléaire et les opinions publiques européennes (2008) Tome 3: The External Energy Policy of the European Union (2008) Tome 4: Gaz et pétrole vers l’Europe. Perspectives pour les infrastructures (2008) Tome 5: La gouvernance mondiale de l’énergie: enjeux et perspectives (2009) © A LL RIGHTS RESERVED – IFRI – P ARIS,2009 ISSN 1962-610X ISBN 978-2-86592-370-0 IFRI IFRI B RUXELLES 27, RUE DE LA P ROCESSION RUE M ARIE-T HÉRÈSE,21 75740 P ARIS C EDEX 15 – F RANCE B-1000 B RUXELLES – B ELGIQUE P H .: 33 (0)1 40 61 60 00 P H .: 32 (2)238 51 10 F AX: 33 (0)1 40 61 60 60F AX: 32 (2)238 51 15 E MAIL: [email protected] E MAIL: [email protected] W EBSITE: Ifri.org Ifri, 2009 © Contents Introduction .............................................. 7 Jacques Lesourne and William C.Ramsay Oil and Political Violence in Nigeria ......................... 9 Yvan GuichaOua Angola’s Homegrown Answers to the “Resource Curse” ...... 51 Nicholas Shaxson The Use of Oil Revenues in Africa .......................... 103 Géraud Magrin and Geert van Vliet Border Conflicts Tied to Hydrocarbons in the Great Lakes Region of Africa ........................................... 165 Benjamin Augé Ifri, 2009 © Ifri, 2009 © Introduction A closer inspection of the world’s oil and gas resources, tempered by a critical assessment of their accessibility,wOuld lead many investors now focused on Russia and the Middle East to turn their attention to the Caspian Basin. But many of these oil and gas provinces are largely off limits to international investors,or investment conditions have become sO unpredictable that investors are forced to look elsewhere for oil and gas to meet the world’s increasing demand. Even if the current economic crisis has taken the urgency Out of today’s supply and demand balances,economic recOvery will soon reveal the need for ever-increasing investment upstream. While other parts of the world may not hold huge hydrocarbon resources equal to the Middle East’s,there are never- theless substantial opportunities elsewhere. This volume is dedicated to sub-Saharan Africa, where considerable resources have been found and more will no dOubt be discOv- ered. Specifically,the cOuntries of the Gulf of Guinea have long been in the oil business,and some are now in the gas business. What have been the experiences in the oil and gas sectors of these cOuntries? Has governance evolved Over the years? Why have some of these cOuntries been unable to realize the full benefits of their resource endOwments? The Gulf of Guinea holds considerable promise for more oil and gas for world markets,but the experiences of the past decades suggest a need for substantial reform. Income distribution,welfare,and development are not generally the business of energy companies,but if governments dO not see to these basic requirements of their populations,energy Ifri, 2009 © 8 Governance of Oil in Africa: Unfinished Business Table 1. Oil Production Levels of Sub-Saharan Africa, by Country Production Production COuntry (millions of barrels per day)(millions of tons) Nigeria2,356 114.2 Angola1,72384.1 Cameroon 824.2 Chad 144 7.5 Congo-Brazzaville 222 11.5 Equatorial Guinea363 18.0 Gabon 23011.5 Total 5,120 251.0 companies will not be able to bring those energy commodities to the market. The table abOve summarizes,in barrels per day and tons, the production levels of this region in 2007,as indicated by the BP Statistical Review of World Energy from June 2008.1 This region produces 7.1% of total world production,a significant figure considering that its domestic consumption is quite modest and exports are near the same as production. Quality of governance,corruption,income distribution, and corporate roles are delicate topics,and the ways in which they are dealt with in the papers presented here reflect each author’s specific vision of Africa. The thoughts and ideas expressed by the authors are their Own,and are not neces- sarily shared by IFRI. The IFRI Energy Program hopes that this book will shed light on the role of hydrocarbon production in Africa. J ACQUES L ESOURNE AND W ILLIAM C.R AMSAY * *Jacques Lesourne is Chairman of the Scientific Committee of the IFRI Energy Program. William C.Ramsay is Senior Fellow,Director of the Ifri Energy Programme “European Governance and Geopolitics of Energy”. 1. Available at http://www.bp com/liveassets/bp_internet/globalbp/globalbp_uk_english/ reports_and_publications/statistical_energy_review_2008/STAGING/local_assets/downloads/pdf/ statistical_review_of_world_energy_full_review_2008.pdf (accessed February 15, 2009). Ifri, 2009 © Oil and Political Violence in Nigeria Yvan Guichaoua* For several months now,the chronic political instability in the Niger Delta, the principal area of hydrocarbons exploita- tion in Nigeria, the world’s eleventh largest oil producer,has provided the media with spectacular stories of violence. Hardly a week goes by without an act of sabotage against an industrial facility,the kidnapping of an employee of an oil cOmpany (foreign or otherwise),or deadly clashes between security forces and militants from a complex network of heavily armed insurgency movements. Each day,tens of thousands of barrels of oil are stolen,sometimes illegally refined, and sold on the black market,robbing Nigerians of considerable revenue. It is estimated that between 100,000 and 500,000 additional barrels of oil per day,depending on the time period, cOuld be produced if the cOuntry were secure. Before the current global financial crisis hit,the Niger Delta’s recurrent political problems significantly contributed to the spike in crude oil prices,in a global energy supply context that was already problematic due to political tensions in the Middle East. *Yvan Guichaoua is researcher at the Oxford Department of International Development, University of Oxford, and holds a Ph.D.

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