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Asunto:[CeHuNews] 31/06 - Empire of Oil: Capitalist Dispossession and the Scramble for Africa ( by Michael Watts - The Monthly Review Sept 2006 )
Fecha:Domingo, 24 de Septiembre, 2006  15:51:11 (+0000)
Autor:Alexander von Humboldt <cehumboldt>

CeHu News 31/06

Empire of Oil: Capitalist Dispossession and the Scramble for Africa 
by Michael Watts (Director of the Center for African Studies, University of

Blood may be thicker than water, but oil is thicker than both. 

—Perry Anderson, “Scurrying Towards Bethlehem,” New Left Review, July–August

In his 2006 State of the Union address, George Bush finally put into words what
previous presidents could not bring themselves to utter in public: addiction.
The United
States, he conceded, is “addicted” to oil—which is to say addicted to the
car—and as a
consequence unhealthily dependent upon Middle Eastern suppliers. What he
neglected to
mention was that the post–Second World War U.S. global oil acquisition
strategy—a central
plank of U.S. foreign policy since President Roosevelt met King Saud of Saudi
Arabia and
cobbled together their “special relationship” aboard the USS Quincy in February
in a total shambles. The pillars of that policy—Iran, Saudi Arabia, the Gulf oil
and Venezuela—are hardly supplicant sheep within the U.S. imperial fold. 

With surplus capacity in OPEC at an all-time low and speculation running rampant
in the
commodity exchanges, Big Oil is awash with money. Corporate profits are
unprecedented. Chevron netted a cool $14 billion in 2005, and first quarter
earnings in
2006 are 50 percent higher than the previous year, a historic high obscene
enough to have
Congress muttering about a windfall profits tax. So-called supply risks in Iran,
Venezuela, and Nigeria coupled with the speculative impulses of the oil traders
driven up the price of oil to around $70 a barrel, and a former oilman
(surrounded by a
posse of former oilmen) stalks the halls of the White House. As if that were not
the New York Times (March 27, 2006) reported that through a “vague law” the U.S.
government will waive, for the oil supermajors, about $7 billion in state
royalties over
the next seven years. All of this takes us back to the 1973 oil embargo and
Nixon’s Project Independence, designed to achieve U.S. self-sufficiency by 1980.
policy failed miserably (U.S. dependency upon imported oil in the late 1960s was
percent and is expected to be about 66 percent by 2025) and Nixon resorted to
domestic supply and turning to reliable foreign suppliers at minimal cost—just
as George
Bush intends to do.

It is no surprise, then, that alternative sources of oil should be very much on
the Bush
radar screen (since conservation strategies or increased gas taxes are
absent). Cheney’s National Energy Strategy Report in 2001 bemoaned the U.S. oil
dependency on foreign powers that do not have America’s interests at heart”—long
the State of the Union address. A recent report in the Financial Times (March 1,
makes the new agenda crystal clear. Although Africa is not as well endowed in
hydrocarbons (both oil and gas) as the Gulf states, the continent “is all set to
power,” and as a consequence it is “the subject of fierce competition by energy
companies.” IHS Energy—one of the oil industry’s major consulting
African oil production, especially along the Atlantic littoral, to attract “huge
exploration investment” contributing over 30 percent of world liquid hydrocarbon
production by 2010. Over the last five years when new oilfield discoveries were
one in every four barrels of new petroleum discovered outside of Northern
America was
found in Africa. A new scramble is in the making. The battleground consists of
the rich
African oilfields (see map). 

Energy security is the name of the game. No surprise, then, that the Council on
Relations’s call for a different U.S. approach to Africa in its new report, More
Humanitarianism (2005), turns on Africa’s “growing strategic importance” for
U.S. policy.
It is the West African Gulf of Guinea, encompassing the rich on- and offshore
stretching from Nigeria to Angola, that represents a key plank in Bush’s
alternative to
the increasingly volatile and unpredictable oil-states of the Persian Gulf.
Nigeria and
Angola alone account for nearly four million barrels per day (almost half of
output) and U.S. oil companies alone have invested more than $40 billion in the
over the last decade (with another $30 billion expected between 2005 and 2010).
investment now represents over 50 percent of all foreign direct investment (FDI)
in the
continent (and over 60 percent of all FDI in the top four FDI recipient
countries), and
almost 90 percent of all cross-border mergers and acquisition activity since
2003 has
been in the mining and petroleum sector. The strategic interests of the United
certainly include not only access to cheap and reliable low-sulphur oil imports,
but also
keeping the Chinese (for example in Sudan) and South Koreans (for example in
Nigeria)—aggressive new actors in the African oil business—and Islamic terror at
Africa is, according to the intelligence community, the “new frontier” in the
against revolutionary Islam. Energy security, it turns out, is a terrifying
hybrid of the
old and the new: primitive accumulation and American militarism coupled to the
war on

The Road to Serfdom

The backdrop to the new scramble is the calamity of African poverty—in the
language of
Our Common Interest: The Report of The Commission on Africa (2005), assembled by
Blair and Gordon Brown, “the greatest tragedy of our time.” They dubbed 2005 the
“Year of
Africa.” In June of that year the Live 8 concerts drew a global audience of two
and a week later the G8 pledged to double aid to Africa ($25 billion by 2010)
and forgive
the debts of fourteen African states. African poverty had forced itself into the
international limelight aided and abetted by a motley crew of humanitarians from
Bono to
Jeffrey Sachs to the Pope. The milestones in the growing international
visibility of the
African crisis include the United Nations Millennium Declaration in 2000; the
Challenge Account; the President’s Emergency Plan for AIDS Relief (PEPFAR); and
African Growth And Opportunity Act, all launched by President Bush; and now, the
World Bank African Action Plan. Collectively these palliatives were belated
responses to
the unacceptable face over two decades of globalization, reform, and the search
for the
Holy Grail of good governance. On the continent itself, the New Economic
Partnership for
African Development [NEPAD] (2001) and the revamped African Union (formerly the
Organization for African Unity) offered the prospect that poor leadership (the
pathologies of the African postcolonial state variously described as
prebendalism, predation, quasi-statehood, the postcolony, and politics of the
belly) were
to be taken seriously by an African political class that purportedly represented
a new
sort of democratic dispensation unleashed by a raft of the political transitions
the 1990s.

To see the African crisis, however, as a moral or ethical failure on the part of
“international community” (not least in its failure to meet the pledges promised
by the
Millennium Development Goals of reducing poverty by half by 2015) is only a
truth. The real crisis of Africa is that after twenty-five years of brutal
reform, and savage World Bank structural adjustment and IMF stabilization,
development has failed catastrophically. 

William Easterly, former high-ranking World Bank apparatchik, in his new
demolition of structural adjustment—“a quarter century of economic failure and
chaos”—boldly states that the entire unaccountable enterprise of planned reform
“absurd” ( It was Africa after
all that
was the testing ground for the Hayekian counter-revolution that swept through
economics in the 1970s. It began with the publication of Accelerated Development
Sub-Saharan Africa: An Agenda for Action (known as the “Berg Report”), the first
in a
series of World Bank reports that focus on the development problems of
Africa. This was the first systematic attempt to take the Chicago Boys
experience in
post-Allende Chile and impose it on an entire continent. The ideas of Elliot
Berg and his
fellow travelers marked the triumph of a long march by the likes of Peter Bauer,
H. G.
Johnson, and Deepak Lal (ably supported by the monetarist think tanks such as
Institute of Economic Affairs and the Mont Pelerin Society, and the astonishing
rise to
power from the early presence of Leo Strauss and Fredrich Hayek of the “Chicago
through the development institutions like the World Bank. Long before shock
therapy in
Eastern Europe or even the debt-driven “adjustments” in Latin America, it was
Africa that was the playground for neoliberalism’s assault. According to the
Nations, twenty-six of thirty-two sub-Saharan states had a “liberal” economic
regime by
1998. Almost all had experienced some sort of structural adjustment program in
the wake
of the Berg report. 

If the 1980s were Africa’s Lost Decade with collapsing commodity prices,
terms of trade, and the first crashing waves of IMF austerity—then how might one
characterize the last fifteen years, in which the benefits of reform were to be
felt, but in which life expectancy across sub-Saharan Africa steadily fell and
per capita
income has at best stagnated? And all of this during a period in which net
overseas development aid fell by 40 percent (from $18.7 to $10 billion). 

In Africa, the court of neoliberalism has been concluded, and the verdict is in.
picture is not pretty. Over the last thirty years there has been no growth in
income for
the average African. Life expectancy is forty-six years. Twenty-three of
sub-Saharan states have currently a GDP of less than $3 billion (ExxonMobil’s
net profit
in the first quarter of 2006 was $8 billion). By 2005, thirty-eight of the top
priority countries that failed to make headway toward the Millennium Goals were
sub-Saharan states, and according to the Chronic Poverty Report 2004–05, all
sixteen of
the most “desperately deprived” countries are located in sub-Saharan Africa.
Over 300
million people live on less than $2 per day—and this is expected to rise to 400
by 2015. One-third of the population of the continent is undernourished;
stunting rates
run at almost 40 percent. According to a United Nations Food and Agriculture
assessment in January 2006, twenty-seven countries are in need of emergency food
As I write, the famine in Somalia is of the order of the catastrophic food
crisis that
devastated the region in the mid-1980s; the nightmare in Darfur has spread to
Chad with
the prospects of hundreds of thousands of refugees being pushed and shoved
across the
greater Chad basin in a way all too familiar to the central African crisis a

The neoliberal tsunami broke with a dreadful ferocity on African cities, and the
slum world in particular. Reform—the privatization of public utilities creating
corporate profits and a decline in service provision, the slashing of urban
services, the
immiseration of many sectors of the public workforce, the collapse of
manufactures and
real wages, and often the disappearance of the middle class—was remorselessly
in its effects, as Mike Davis documents in Planet of Slums (Verso, 2005). As a
consequence, African cities confronted the horrifying realities of an economic
contraction of 2–5 percent per year combined with sustained population growth of
up to 10
percent per annum (Zimbabwe’s urban labor market grew by 300,000 per year in the
while urban employment grew by just 3 percent of that figure). In Dar es Salaam
service expenditures per capita fell by 10 percent a year in the 1980s; in
adjustment created one million “new poor”; and urban poverty in Nigeria almost
between 1980 and the mid 1990s. No wonder that 85 percent of urban growth in
Kinshasha, and Nouakchott in the 1980s and 1990s was accommodated in the slums
of sprawling and ungovernable cities. Everyone’s worst urban
nightmare—Lagos—grew from
300,000 to 13 million in over fifty years and is expected to become part of a
vast Gulf
of Guinea slum of 60 million poor along a littoral corridor 600 kilometers
from Benin City to Accra by 2020. Black Africa will contain 332 million slum
dwellers by
2015, a figure expected to double every fifteen years. The pillaging and
privatization of
the state—whatever its African “pathologies”—and the African commons is the most
extraordinary spectacle of accumulation by dispossession, all made in the name
of foreign
assistance. The involution of the African city, notes Davis, has as its
corollary not an
insurgent lumpenproletariat but rather a vast political universe of Islamism and
Pentecostalism. It is this occult world of invisible powers—whether populist
Islam in
Kano or witchcraft in Soweto—that represents the most compelling ideological
legacy of
neoliberal utopianism in Africa.

As if to confirm the catastrophism of commentators like Robert Kaplan, the
calamity that
is African development ran straight into another: the HIV/AIDS epidemic. While
epidemiological data suggests that the prevalence rates and possible demographic
socio-economic impacts for much of western and northeastern Africa may have been
exaggerated (Guardian, April 21, 2006), the pall that the disease has imposed on
regions is incontestable. The impact of HIV/AIDS—with an 8 percent adult
prevalence and
28 million infected, Africa accounts for 2.3 million AIDS deaths per year—has
life expectancy in southern and eastern Africa. Twenty years ago, a male child
reasonably expect to live to sixty in Botswana; currently it is about thirty. By
there will be more than 50 million orphans in Africa. 

Of course, there are those within the development business for whom the failure
secular nationalist development is a result not of too much neoliberalism, but
enough. The complaint here, typically from those within the free-market
establishment, is
that adjustment and stabilization has never really been implemented (a
right-wing version
of the left-wing claim that adjustment was asking African ruling classes to
political suicide). There is, of course, some truth to this (but the cry of any
will always be “we were defeated by not going far enough”). Despite the
radically uneven
geographical patterns of neoliberal governance and rule, the overall tendency
has been to
increase social inequality and expose the poor to austerity and marginalization.
And the
reality is that in Africa World Bank reforms, and the pressures imposed by the
WTO from
the mid 1990s onwards, did have drastic consequences for trade and
investment—the litmus
test of neoliberal development—seen in the widespread dismantling of state
boards and of trade protections. And here the picture is devastating. In
absolute terms
African exports grew quite rapidly from 1963–2000, but at a much slower rate
than world
trade generally. Africa’s share of world exports fell from almost 6 percent in
1962 to 2
percent in 2000. In non-oil products (food and manufactures) growth rates of
between 1980 and 1998 were miserable. It has been argued that given African
(income, geography, and socioeconomic conditions), the performance is “average.”
Yet it
is incontestable that African exports are characterized overall by a
“disintegration from
Northern markets” and “isolation from more dynamic developments in the
composition of
international trade” (Peter Gibbon & Stefano Ponte, Trading Down [Temple University
Press, 2005], 44). UNCTAD showed that of the exports from twenty-six African
states, the
average concentration on primary exports has remained basically unchanged
(roughly 85
percent) since 1980. In all categories, sub-Saharan Africa has failed to move up
value-added chain away from primary commodities. 

What is especially striking is that the fear that Africa was largely marginal to
circuits of capitalist accumulation and global resource flows during the 1980s
and might
be marginalized further, in some respects, proved to be a massive
understatement. It is
almost shocking to think that in the 1970s, Africa accounted for 25 percent of
FDI to the
third world. By 2000 it had crashed to 3.8 percent (Africa’s share of world FDI
currently less than 1 percent). Over the period 1981–85, FDI inflow into Africa
running at $1.7 billion per annum; by 1991–95 it had grown to $3.8 billion. Yet
as a
percentage of all developing country FDI inflow, the figure represented a
secular decline
from 9 percent to less than 5 percent (all-in-all miniscule compared to South
and East
Asia and Latin America). Between 1995 and 2001, FDI inflow amounted to $7
billion per
year but almost two-thirds of the portfolio was destined for three countries
Nigeria, and South Africa, in which oil FDI accounted for 90 percent of all FDI
see figure 3). Half of Africa’s states had effectively none. Two-thirds of FDI
derived from the same three countries (United Kingdom, Germany, and the United
that had dominated FDI supply in 1980. According to the World Investment Report
FDI into Africa is currently $18 billion; four countries account for 50 percent,
and the
top ten almost three-quarters. To put the matter starkly, the vast bulk of
transnational investment—the hallmark of success for the neoliberal project—was
monopolized by a quartet of mining-energy economies. The remainder of the
continent was
essentially insignificant. From the vantage point of the Year of Africa,
investment flows
into the continent have been a grave disappointment. 

The African accumulation crisis, and the dynamics of capital and trade flows,
are in
practice complex and uneven. In addition to oil (and the very few cases of
growth in places like Mauritius which are little more than national
platforms), the other source of economic dynamism is the (uneven) emergence of
value chains. This can be seen especially in relation to high-value agricultures
fruits and vegetables) in South Africa, flowers in Kenya, green beans in
Senegal. Such
forms of contract production, typically buyer-driven commodity chains in which
exert enormous power, have created islands of agrarian capitalism that
contribute to and
deepen patterns of existing inequality across Africa and further the interests
business elites, which are often not African. The deepening of commodification
in the
countryside in tandem with demographic pressures (caused as much by civil war
displacement as high fertility regimes) has made land struggles a vivid part of
the new
landscape of African development.

It is no surprise that against this backdrop the development establishment
flails around
wildly. On the one side stands former World Bank economist William Easterly for
whom all
aid (“planning”) has been a total (and unaccountable) failure. The solution is
not to
plan at all. Rather than planners—in his view the IMF/IBRD stenographers are
Stalinists in neoliberal garb—and the likes of Bono and Tony Blair, we need to
find a
raft of “searchers” like microcredit guru Mohammed Yunus. On the other stands
the one-man
industry otherwise known as Jeffrey Sachs who seeks to expand foreign aid—$30
billion a
year for Africa—and to initiate a Global Compact by which “the rich will help
save the
poor,” who are as much hampered by poor physical geography as governance

In reality what is on offer is an even bleaker world of military neoliberalism.
At one
pole are enclaves of often militarily fortified accumulation (of which the oil
complex is
the paradigmatic case) and the violent, sometimes chaotic, markets so
depicted in the documentary film Darwin’s Nightmare. At the other pole are the
holes of recession, withdrawal, and uneven commodification. These complex
trajectories of
accumulation are dominated at this moment by the centrality of extraction and a
return to
primary commodity production.

Petropolitics and the New African ‘Gulf States’

Currently Africa is the center of a major oil boom, an index of the centrality
of the
primary commodities sector as the most important source of capitalist
accumulation on the
continent. The continent accounts for roughly 10 percent of world oil output and
percent of known reserves. Though oil fields in Africa are generally smaller and
than the Middle East—and production costs are accordingly 3–4 times
higher—African crude
is generally low in sulfur and attractive to U.S. importers. As a commercial
producer of
petroleum, Africa arrived, however, rather late to the hydrocarbon age. Oil
production in
Africa began in Egypt in 1910 and only in earnest in Libya and Algeria (under
French and
Italian auspices) in the 1930s and 1940s. Now there are twelve major oil
producers in
Africa—members of the African Petroleum Producers Association—dominated, in rank
order of
output, by Nigeria, Algeria, Libya, and Angola which collectively account for 85
of African output. All of the major African oil producers are highly
oil-dependent. Among
the top six African oil states, petroleum accounts for 75–95 percent of all oil
revenues, 30–40 percent of GDP, and 50–80 percent of all government revenues. Up
the 1970s North Africa dominated production of oil and gas on the continent, but
in the
last three decades it has moved decisively to the Gulf of Guinea encompassing
the rich on
and offshore fields stretching from Nigeria to Angola. The Gulf—constituted by
so-called West African Gulf States—has emerged as the predominant African
supplier to an
increasingly tight and volatile world oil market. The Washington D.C. think
tanks and the
phalanxes of oil lobbyists are deeply concerned with Gulf of Guinea security,
interests, and U.S. engagement there.

Gabon and Equatorial Guinea are the only African oil producers with high oil per
(so-called petroleum endowments), comparable to the oil rich and sparsely
states such as Kuwait and Qatar. Only Nigeria ranks within the world’s top
fifteen oil
producers. Nigeria, Algeria, and Libya are respectively the world’s eighth,
tenth, and
twelfth largest oil exporters. These three states and Gabon are all members of

All African governments have organized their oil sectors through state oil
companies that
have some forms of collaborative venture with the major transnational oil
(customarily operated through oil leases and joint memoranda of understanding).
general the international oil companies operating in Africa have production
arrangements with state oil companies (Nigeria is the exception which operates
through joint ventures). African governments guarantee the companies a minimum
according to geological, technological, and investment criteria. The national
pays royalties for the quantity of crude produced after deductions are made to
cover the
costs of operations. All of these petro-states are marked by the so-called
curse: staggering corruption, authoritarian rule, and miserable economic
performance (see
Ian Gary & Terry Karl, Bottom of the Barrel, Catholic Relief Services, 2003). The deadly
operations of the alliance between corporate oil and autocratic oil states have
force the question of transparency of oil operations onto the international
agenda. Tony
Blair’s Extractive Industries Transparency Initiative, the IMF’s Oil Diagnostic
and the Soros Foundation’s Revenue Watch are all “voluntary” regulatory efforts
provide a veneer of respectability to a rank and turbulent industry.

Nigeria: The Rise and Fall of an Oil State

Nigeria is the jewel in the African oil crown. Nobody would doubt the strategic
significance of contemporary Nigeria. One of every five Africans is a
country’s population is currently estimated to be 137 million—and it is the
seventh largest exporter of petroleum providing the U.S. market with roughly 8
percent of
its imports. A longtime member of OPEC, Nigeria is an archetypical “oil nation.”
reserves estimated at close to forty billion barrels, oil accounted in 2004 for
percent of government revenues, 90 percent of foreign exchange earnings, 96
percent of
export revenues according to the IMF, and almost half of GDP. Crude oil
production runs
currently at more than 2.1 million barrels per day valued at more than $20
billion at
2004 prices. Mostly lifted onshore from about 250 fields dotted across the Niger
Nigeria’s oil sector now represents a vast domestic industrial infrastructure:
more than
three hundred oil fields, 5,284 wells, 7,000 kilometers of pipelines, ten export
terminals, 275 flow stations, ten gas plants, four refineries, and a massive
natural gas (LNG) project (in Bonny and Brass).

The rise of Nigeria as a strategic player in the world of oil geopolitics has
dramatic and has occurred largely in the wake of the civil war that ended in
1970. In the
late 1950s petroleum products were insignificant, amounting to less than 2
percent of
total exports. Between 1960 and 1973 oil output exploded from just over 5
million to over
600 million barrels. Government oil-revenues in turn accelerated from 66 million
naira in
1970 to over 10 billion in 1980. A multi-billion dollar oil industry has,
however, proved
to be a little more than a nightmare (Nigeria: Want in the Midst of Plenty,
Africa Report
113, International Crisis Group, 2006). To inventory the “achievements” of
Nigerian oil
development is a salutary exercise: 85 percent of oil revenues accrue to 1
percent of the
population; of $400 billion in revenues, perhaps $100 billion have simply gone
since 1970. The anti-corruption chief Nuhu Ribadu, claimed that in 2003, 70
percent of
the country’s oil wealth was stolen or wasted; by 2005 it was “only” 40 percent.
Over the
period 1965–2004, income per capita fell from $250 to $212; income inequality
markedly over the same period. Between 1970 and 2000 in Nigeria, the number of
subsisting on less than one dollar a day grew from 36 percent to more than 70
from 19 million to a staggering 90 million. According to the IMF, oil “did not
seem to
add to the standard of living” and “could have contributed to a decline in the
of living” (Martin & Subramanian, Addressing the Resource Curse [IMF, 2003], 4). Over the
last decade GDP per capita and life expectancy have both fallen, according to
World Bank

What is on offer in the name of petro-development is the terrifying and
failure of secular nationalist development. It is sometimes hard to gasp the
consequences and depth of such a claim. From the vantage point of the Niger
Delta—but no
less from the vast slum worlds of Kano or Lagos—development and oil wealth is a
joke. These paradoxes and contradictions of oil are nowhere greater than on the
of the Niger Delta. In the oil rich states of Bayelsa and Delta there is one
doctor for
every 150,000 inhabitants. Oil has wrought only poverty, state violence, and a
ecosystem. It is no great surprise that a half century of neglect in the shadow
of black
gold has made for a combustible politics. All the while the democratic project
in 1999 appears ever more hollow.

The nightmarish legacy of oil politics must be traced back to the heady boom
days of the
1970s. The boom detonated a huge influx of petro-dollars and launched an
ambitious (and
largely autocratic) state-led modernization program. Central to the operations
of the new
oil economy was the emergence of an “oil complex” that overlaps with, but is not
identical to, the “petro-state.” The latter is comprised of several key
elements: (1) a statutory monopoly over mineral exploitation, (2) a nationalized
oil company that operates through joint ventures with oil majors who are granted
territorial concessions (blocs), (3) the security apparatuses of the state
(often working
in a complementary fashion with the private security forces of the companies)
who ensure
that costly investments are secured, (4) the oil producing communities
themselves within
whose customary jurisdiction the wells are located, and (5) a political
mechanism by
which oil revenues are distributed. 

The oil revenue distribution question—whether in a federal system like Nigeria
or in an
autocratic monarchy like Saudi Arabia—is an indispensable part of understanding
combustible politics of imperial oil. In Nigeria there are four key distribution
mechanisms: the federal account (rents appropriated directly by the federal
state); a
state derivation principle (the right of each state to a proportion of the taxes
that its
inhabitants are assumed to have contributed to the federal exchequer); the
account (or states joint account) which allocates revenue to the states on the
basis of
need, population, and other criteria; and a special grants account (which
includes monies
designated directly for the Niger Delta, for example through the notoriously
Niger Delta Development Commission). Over time the derivation revenues have
fallen (and
thereby revenues directly controlled by the oil-rich Niger Delta states have
and the states joint account has grown vastly. In short, there has been a
process of
radical fiscal centralism in which the oil-producing states (composed of ethnic
minorities) have lost and the non-oil producing ethnic majorities have gained—by
means or foul.

Overlaid upon the Nigerian petro-state is, in turn, a volatile mix of forces
that give
shape to the oil complex. First, the geo-strategic interest in oil means that
and other forces are part of the local oil complex. Second, local and global
society enters into the oil complex either through transnational advocacy groups
concerned with human rights and the transparency of the entire oil sector, or
local social movements and NGOs fighting over the consequences of the oil
industry and
the accountability of the petro-state. Third, the transnational oil business—the
the independents, and the vast service industry—are actively involved in the
process of
local development through community development, corporate social responsibility
stakeholder inclusion. Fourth, the inevitable struggle over oil wealth—who
controls and
owns it, who has rights over it, and how the wealth is to be deployed and
used—inserts a
panoply of local political forces (ethnic militias, paramilitaries, separatist
and so on) into the operations of the oil complex (the conditions in Colombia
are an
exemplary case). In some circumstances oil operations are the object of civil
Fifth, multilateral development agencies (the IMF and the IBRD) and financial
corporations like the export credit agencies appear as key “brokers” in the
and expansion of the energy sectors in oil-producing states (and latterly the
multilaterals are pressured to become the enforcers of transparency among
governments and
oil companies). And not least, there is the relationship between oil and the
shady world
of drugs, illicit wealth (oil theft for example), mercenaries, and the black

The oil complex is a sort of corporate enclave economy but also a center of
political and
economic calculation that can only be understood through the operation of a set
of local,
national, and transnational forces that can be dubbed as “imperial oil.” The
struggle for
resource control that has taken center stage over the last decade in Nigeria as
the Niger
Delta has become more ungovernable (because the struggle has assumed a more
cast) grows precisely from this mix of forces that constitute the oil complex. 

Imperial Oil: The Contradictions of U.S. Oil Security Policy

On this canvas of African oil security and the conspicuous failure of postwar
petro-policy, recent events in Nigeria—and most especially in the oil-producing
Delta—have necessarily grabbed the headlines (and the attention of the oil
markets). The
fragility of Nigeria’s oil economy was thrown into dramatic relief by the
walkout by
political representatives from the oil-producing region from a national meeting
on the
distribution of oil revenues; the arrest of a Delta militant and insurgency
leader on
treason charges in late 2005; and a major escalation in violent attacks on oil
installations in December 2005 and January–February 2006 by Ijaw militants that
the taking of hostages by a largely unknown militant group, the Movement for the
Emancipation of the Niger Delta (MEND). By early 2006, 630,000 barrels per day
compromised by political instability and attacks. But this turbulence must
itself be
placed on a larger historical landscape. Since the late 1990s, there has been a
substantial escalation of violence across the delta oil fields, accompanied by
attacks on oil facilities. Civil violence among and between oil producing
communities and
the state security forces is endemic (it is estimated that more than one
thousand people
die each year from oil-related violence). 

Over the last decade, the Niger Delta has been wracked by insurrection. An
analysis prepared for the Nigerian National Petroleum Company (NNPC) and
published in
2003 was entitled Back from the Brink. It painted a gloomy “risk audit” for Big
Oil. A
leaked report by Shell in the same year explicitly stated that their “license to
in Nigeria was in question. And with good reason. The NNPC estimated that
between 1998
and 2003, there were 400 “vandalizations” on company facilities each year (581
January and September 2004), and oil losses amounted to $1 billion annually. The
and repertoires deployed against the companies have been various: demonstrations
blockades against oil facilities; occupations of flow stations and platforms;
sabotage of
pipelines; oil “bunkering,” or theft (from hot-tapping fuel lines to large-scale
appropriation of crude from flow stations); litigation against the companies;
taking; and strikes. A large group of Ijaw women that occupied the Chevron oil
near Warri in 2002, demanding company investments and jobs for indigenes (New
York Times,
August 13, 2002), reflected the tip of a vast political iceberg. Mounting
violence in the following year resulted in many deaths and widespread community
destruction and dislocation around the Warri petroleum complex. Seven oil
employees were killed in March 2003, prompting all the major oil companies to
staff, close down operations, and reduce output by more than 750,000 barrels per
day (40
percent of national output). 

These events in turn provoked President Obasanjo to dispatch a large troop
deployment to
the oil-producing creeks. Ijaw militants, struggling to get a cut of the illegal
bunkering trade (some estimates suggest that this innovative form of oil theft
siphons a
staggering 15 percent of national production), threatened to destroy eleven
captured oil
installations. In April 2004, another wave of violence erupted around oil
(at the end of April, Shell lost production of up to 370,000 barrels per day,
largely in
the western delta), this time amid the presence of armed insurgencies,
specifically two
ethnic militias led by Ateke Tom (the Niger Delta Vigilante) and Alhaji Asari
(the Niger
Delta People’s Volunteer Force). Each of these were driven, and partly funded,
by oil
monies and highly organized oil theft. Ten years after the hanging of Ken
Saro-Wiwa and
the militarization of the Ogoni oilfields little has changed. Conditions across
oilfields remain the same, only worse. Security forces still operate with
impunity, the
government has failed to protect communities in oil producing areas while
security to the oil industry, and the oil companies themselves bear a share of
responsibility for the appalling misery and the political instability across the

The new violence and instability is something of a watershed however. Among
demands were the release of two Ijaw leaders of note, the Ijaw being the largest
and most
militant minority group in the Nigerian Delta. On January 29, 2006, these
hostages were
released unharmed although the Ijaw leaders in question remained under arrest in
the Nigerian capital. By the first week in February MEND was calling for the
international community to evacuate from the Niger Delta by February 12, or face
attacks. Two weeks later MEND claimed responsibility for attacking a federal
naval vessel
and for the kidnapping of nine workers employed by the oil servicing company
apparently in retaliation for an attack by the Nigerian military on a community
in the
western delta. The Nigerian government claimed they had attacked barges involved
in the
contraband oil trade. MEND’s stated goal was to cut Nigerian output by 30
percent. Within
the first three months of 2006, $1 billion in oil revenues had been lost; and
Nigerian soldiers had been killed in the uprising and as I write, forty hostages
taken from an AGIP flow station in Bayelsa State. The situation across the oil
fields is
now as fraught as at any time since the end of the civil war in 1970. By late
July 2006
oil production had been cut by 700,000 barrels per day (see The Swamps of
Nigeria’s Delta Unrest, Africa Report 115, International Crisis Group, 2006).

The current crisis points to the fact that the oil-producing region in Nigeria
now stands
at the center of Nigerian politics—for four reasons. First, the efforts led by a
of Niger Delta states for “resource control” expanded access to and control over
oil and
oil revenues. Second, there was the struggle for self-determination of minority
in the region and the clamor for a sovereign national conference to rewrite the
constitutional basis of the federation itself. Third, there is a crisis of rule
in the
region as a number of state and local governments are rendered helpless by
militant youth
movements, growing insecurity, and ugly intra-community, inter-ethnic, and state
which—as the recent events point out—can threaten the flow of oil and the much
energy security of the United States. And not least, there is the emergence of a
so-called South-South Alliance making for a powerful coalition of small and
politically marginalized oil producing states (Akwa Ibom, Bayelsa, Cross River,
Ondo, and Rivers) capable of challenging the ruling ethnic majorities (the
Hausa, the
Yoruba, and the Ibo) in the run-up to the 2007 elections. 

Not surprisingly the deadly operations of corporate oil, autocratic
petro-states, and the
violent potentialities of the oil complex have forced the question of
transparency and
accountability of oil operations onto the international agenda. Tony Blair’s
Industries Transparency Initiative, the IMF’s oil diagnostics program, and the
Foundation’s Revenue Watch are all (voluntary) efforts to provide a veneer of
respectability to a rank and turbulent industry. But the real action lies
elsewhere. The
danger is that the ongoing U.S. militarization of the region could amplify the
of mercenaries and paramilitaries, creating conditions not unlike those in
Colombia. In
February 2006 Nigeria’s Vice President Atiku Abubakar unsuccessfully requested
hundred patrol boats and a military package from the United States. In turn,
appealed directly to China for military aid, citing that the United States was
slow to
support them in this area. The Financial Times (March 1, 2006) cited the Africa
at the Washington based Center for Strategic and International Studies, Stephen
to the effect that the “Chinese are very competitive players and we have to come
to terms
with that. They are going to places that really do matter.” 

The availability of arms to both government and insurgent groups has
“democratized” the
access to the means of violence in the struggle for political power. In the
run-up to the
2007 elections the windfall oil revenues will, as in 1999 and 2003, fund all
manner of
political thuggery and the arming of political parties and local militants who
will be
expected to deliver votes and intimidate voters. The prospect of U.S.
militarization in
the south to protect the oil fields, and in the north to control Islamic terror
the Pan Sahel Counter Terror Initiative, is a recipe for massive political
Nigeria provides, in this sense, a microcosm of the new scramble for Africa
military neoliberalism and the war on terror. It might well be the next Iraq. 

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