Oil Revenues, Security and Stability in West Africa [1st ed.] 9783030379858, 9783030379865

Table of contents :
Front Matter ....Pages i-xiii
Introduction: Human Security, Oil Revenues, and Conflict (Vandy Kanyako)....Pages 1-23
The History and Geology of Petroleum in West Africa (Vandy Kanyako)....Pages 25-44
External Stakeholders and the Geopolitics of Oil (Vandy Kanyako)....Pages 45-71
Oil Revenues and the State (Vandy Kanyako)....Pages 73-107
Oil and Community Agitation (Vandy Kanyako)....Pages 109-141
Civil Society and Global Frameworks (Vandy Kanyako)....Pages 143-163
Managing Disputes in West Africa’s Petroleum Industry (Vandy Kanyako)....Pages 165-190
Conclusion: Implications for the Field of Conflict Resolution (Vandy Kanyako)....Pages 191-211
Back Matter ....Pages 213-219

Citation preview

Oil Revenues, Security and Stability in West Africa Vandy Kanyako

Oil Revenues, Security and Stability in West Africa

Vandy Kanyako

Oil Revenues, Security and Stability in West Africa

Vandy Kanyako Conflict Resolution Program Portland State University Portland, OR, USA

ISBN 978-3-030-37985-8 ISBN 978-3-030-37986-5 (eBook) https://doi.org/10.1007/978-3-030-37986-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Acknowledgments

This book is the product of extensive research and several years of collaboration and dialogue with many individuals and groups to whom I owe a debt of gratitude. It would not have been possible without the generous funding I received from the faculty development grant at Portland State University. The book would not have been possible without the support and encouragement of various individuals, organizations and institutions, both inside and outside of West Africa. My foremost thanks goes to all those individuals and civil society organizations and grassroots community groups that are working every day to draw attention to the core issues covered in this book. Their support and guidance provided rich materials that helped in making this endeavor feasible. A big thank you to all those who took time out of their busy schedule to meet with me or share ideas via different mediums throughout the process of writing this book, including PC David Mandu Farley Keili-Coomber of Mandu Chiefdom, Sierra Leone, whose incisive knowledge of local laws and natural resource owenership proved invaluable. To my colleagues in the Conflict Resolution program at Portland State University, Portland, Oregon, (Dr. Patricia Schechter [Interim Director], Dr. Robert Gould, Dr. Harry Anastasiou, Dr. Barbara Tint, Dr. Amanda Byron, Dr. Rachel Cunliffe, and Dr. Tom Hastings), I am eternally grateful for your collegial support, Dr. Schechter’s encouragement and professional guidance was particularly critical to the success of

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this venture. I say a big thank you as well to Aislyn Matias, our hardworking Program Coordinator who helped to weave the different strands together! To my family and friends, I would like to express my deepest gratitude. It was a great comfort and relief to know that you were pushing me on and motivating me to embark on this project. Your words of encouragement kept me going till the very end. To my son Iveagh who kept asking “Dad, Is the book done yet?” I say big thank you (with hugs) for your patience and understanding. To Dr. Susan Shepler of American University in Washington DC, and my colleague at the West Africa Oil Watch, Dr. Robert Tynes, my heartfelt thanks for your intellectual inspiration and continued support. A note of appreciation to my research assistants for this project: Evan Way, Lisa Serrano and Anisuz Zaman, who put in countless hours to help me meet the deadline. I’m eternally grateful to the various reviewers and endorsers including Dr. Lansana Gberie, Dr. Jeffrey Colgan, and Ambassador Herman J. Cohen. Your work on the extractive industry in particular and on subSaharan Africa in general, has been a great source of inspiration for me. Versions of Chapter 5 on community agitation has appeared in the Journal for the Study of Peace and Conflict, and I am grateful to The Wisconsin Institute for Peace and Conflict Studies for letting me reproduce it in this book. Finally, to the team at Palgrave Macmillan: Alina Yurova, Balaji Varadharaju, Rachel Moore, and countless others who made this venture a reality my heartfelt appreciation. There are countless others that I have not listed here, more out of the need for brevity, rather than out of negligence. If your name is not listed, please understand. I appreciate all of your efforts in helping me reach this milestone in my professional journey.

Contents

1

Introduction: Human Security, Oil Revenues, and Conflict

1

2

The History and Geology of Petroleum in West Africa

25

3

External Stakeholders and the Geopolitics of Oil

45

4

Oil Revenues and the State

73

5

Oil and Community Agitation

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Civil Society and Global Frameworks

143

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Managing Disputes in West Africa’s Petroleum Industry

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Conclusion: Implications for the Field of Conflict Resolution

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Epilogue: West Africa and the Pandemic of Oil

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Index

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Abbreviations

AU BBLS BCM BOE BP CENTAL CNOOC CNPC CSO CSPOG DACDF DFID ECOMOG ECOWAS EEZ EIA EITI ENI EPA ERA FNLA GDP ICISD IEA IMF

African Union Barrels Billion Cubic Meters Barrels of Oil Equivalent British Petroleum Center for Transparency and Accountability in Liberia China National Oil Corporation China National Petroleum Corporation Civil Society Organization Civil Society Platform on Oil and Gas Diamond Area Community Development Fund Department for International Development Economic Community of West African States Monitoring Group (peace enforcement arm of ECOWAS) Economic Community of West African States Exclusive Economic Zone Energy Information Administration Extractive Industries Transparency Initiative Ente Nazionale Idrocarburi Economic Partnership Agreements Environmental Rights Action National Liberation Front of Angola Gross Domestic Product International Centre for Settlement of Investment Disputes International Energy Agency International Monetary Fund ix

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ABBREVIATIONS

IMTD INGO IOCs IYC JVC LCIA LDI LOGI MEND MODEC MOSIEN MOSOP MOU MRU NACE NEITI NEPDG NEPG NEW NGO NMJD NOC NOCAL OPEC PSA PSC SANONGOL SERAP SINOPEC SLEITI SLIMM UMaT UN UNCLOS UNITA USAID USEIA USGS WACSI WACSOF WANEP WAOFCO

The Institute for Multi-Track Diplomacy International Non-Governmental Organization International Oil Companies Ijaw Youth Council Joint Venture Contracts London Court of International Arbitration Liberia Democratic Institute Liberia Oil and Gas Initiative Movement for the Emancipation of the Niger Delta Mitsui Ocean Development & Engineering Company Inc. Movement for the Survival of Ijaw Ethnic Nationality Movement for the Survival of the Ogoni People Memorandum of Understanding Mano River Union National Advocacy Coalition on Extractives Nigeria Extractive Industry Transparency Initiative National Energy Policy Development Group National Energy Policy Group National Elections Watch Non-Governmental Organization Network Movement for Justice and Development National Oil Company National Oil Company of Liberia Organization of Petroleum Exporting Countries Production Sharing Agreement Production Sharing Contract Sociedade Nacional de Combustiveis Socio-Economic Rights and Accountability Project China Petroleum and Chemical Corporation Sierra Leone Extractive Industry Transparency Initiative Sierra Leone Indigenous Miners Movement University of Mines and Technology United Nations UN Convention on the Law of the Sea National Union for the Total Liberation of Angola United States Agency for International Development US Energy Information Administration United States Geological Survey West Africa Civil Society Institute West Africa Civil Society Forum West Africa Network for Peacebuilding West Africa Oil and Fuel Company

List of Figures

Fig. 2.1 Fig. 4.1

Fig. 4.2

Fig. 4.3

Fig. 4.4

Fig. 5.1

Oil zones of West Africa: February 2010 (Credit U.S. Geological Survey. Department of the Interior/USGS) Oil rents (% of GDP) (Source Estimates based on sources and methods described in “The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium” [World Bank 2011]. License: CC BY-4.0) Oil rents (% of GDP) in West Africa (Source Estimates based on sources and methods described in “The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium” [World Bank 2011]. License: CC BY-4.0) Military expenditure (% of GDP) (Source Stockholm International Peace Research Institute [SIPRI], Yearbook: Armaments, Disarmament and International Security, ID MS.MILXPND.CN. License: Use and distribution of these data are subject to Stockholm International Peace Research Institute [SIPRI] terms and condition) Military expenditure (% of GDP) in 1999 (Source Stockholm International Peace Research Institute [SIPRI], Yearbook: Armaments, Disarmament and International Security, ID MS.MILXPND.CN. License: Use and distribution of these data are subject to Stockholm International Peace Research Institute [SIPRI] terms and condition) Civic response to oil ‘capture’

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99 131

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List of Tables

Table 2.1 Table 4.1 Table 4.2 Table Table Table Table Table Table

4.3 4.4 4.5 5.1 6.1 6.2

Table 7.1 Table 7.2 Table 8.1

Oil endowment in West Africa Oil wealth of West Africa (for select countries) Oil companies occupying oil blocks in Sierra Leone and the estimate payout in 2013 Types of production agreements National oil companies of West Africa Oil-fueled mega projects of West Africa Actors, grievances, and grievance articulation Global regime for enhancing the peace properties of oil Key concerns of international non-governmental organizations Types and nature of conflicts in the oil industry Colonial legacy: West Africa’s border disputes Natural resources of West Africa

37 80 85 91 93 100 125 154 155 169 171 196

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CHAPTER 1

Introduction: Human Security, Oil Revenues, and Conflict

The Rising Profile of West Africa’s Oil Wealth West Africa is in the midst of an oil frenzy. The frenetic search for hydrocarbons in what has been described as the “oiliest patch in the world” (Black 2012; Baumüller et al. 2011) has become so intense and wideranging that there is planned or ongoing oil exploration in all of the 15 countries that officially make up the regional trade bloc: the Economic Community of West African States, or ECOWAS. Traditional oil exporters such as Nigeria have strengthened their capacity, and new oil economies from all over the region are emerging on the scene. With the fourth-largest proven reserves in the world after the Middle East, North America, and Europe, West Africa accounted for 7% of the world’s total output in 2007. At the end of 2011 the region had an estimated 132.4 billion barrels, an increase of 154% over the 1980 figure of 53.4 billion barrels (Palazuelos 2012). The region is projected to increase its production from 1935.90 in 2018 to 3006.24 thousand barrels per day in 2024 (Ghazvinian 2007; Mordor Intelligence 2018). More than any other natural resource, oil has thrust the region onto the world stage in unprecedented ways. The region’s ongoing economically viable oil finds have been made possible by a host of factors, foremost among which is technological advancement in the petroleum industry. Thanks in part to improved technology, knowledge about the region’s geology, especially its underexplored maritime and offshore regions, especially its offshore regions, is © The Author(s) 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5_1

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improving rapidly. Most of the new reserves are deep-sea oil fields that can now be exploited by new technology and drilling techniques including extended reach and complex path drilling, ideal for the region’s ultradeep waters. Other relevant factors include the relative stability in the region following the conclusion of its civil wars in the early 2000s. The conclusion of the civil war in Angola in 2002 and the consolidation of democracy in Nigeria, has also helped fuel the oil boom in the region. Externally, the perennial instability in the traditional petroleum regions such as the Persian Gulf, has forced governments and oil companies to look for alternative sources for oil in places like West Africa. Continued high prices on the global market for the “Sweet crude” variety, which hit a record high of $164.64 in 2008 helped to make West Africa attractive to foreign direct investment. The intensifying oil activities have been made possible in part by foreign direct investment from some of the largest international oil companies (IOCs) in the world. A combination of what is referred to in oil parlance as supermajors, majors, independents, and state-owned companies are snatching up exploration licenses and establishing exploration agreements with African governments in an unprecedented manner. Since 2009, ExxonMobil, Chevron, and Texaco, three of the largest transnational corporations in the world, have spent about $10 billion (all currency in US dollars except otherwise stated) annually toward West Africa’s oil exploration (Watson 2009; Roberts 2006). According to the World Bank (2012), between 2009 and 2011 foreign direct investment to the region increased by 36% to $16.1 billion. Not surprisingly, a sizeable proportion of this investment has been concentrated in the petroleum industry. The economies of at least half of the 16 countries that make up the region have experienced a 6% annual growth since 2002 (World Bank 2012). Buoyed by production from its enormously wealthy Jubilee Oil Field, Ghana’s economy expanded by a whopping 13.4% between 2010, when production started on Jubilee Oil Field, and 2011. The country hitherto known as the gold coast, is now the fastest-growing oil economy on the continent. Of equal importance to the rising profile of West Africa in the global political economy is the entry of China into the region’s oil sector. The world’s second-largest net importer of petroleum products has intensified its involvement in Africa in general and West Africa in particular over the last three decades. Through its three state-run companies—the China National Petroleum Corporation (CNPC), China Petroleum and

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Chemical Corporation (Sinopec), and the China National Oil Corporation (CNOOC)—China has signed a raft of trade deals and bilateral agreements with various governments in the region, including Nigeria, where CNOOC completed a $2.3 billion deal to buy a 45% interest in an offshore oil-mining concession (Frynas and Paulo 2007, p. 231). For example, trade between China and Nigeria, which was a mere $2 billion in 2000, had reached a whopping $18 billion by 2010 (Egbula and Zheng 2011). As China expands into the region, with new deals in Angola and interests in Gabon and Equatorial Guinea, it will create new frontiers, a new wave of ventures and increase demands for West Africa’s oil on the international market (Clarke 2008, p. 75). The region has several advantages that make it appealing to global oil companies and foreign governments nervous about their energy security. Most of the newest and most profitable finds such as in the Jubilee fields in Ghana are located offshore, and in the deep (5000 feet/1524 meters) and ultra-deep waters (1830–2130 meters/approximately 6000– 7000 feet) off the Atlantic Ocean. Offshore oil is of particular interest to external investors and host governments alike largely because it is not yet fully developed and is somewhat insulated from political turmoil on the mainland, something that has plagued the Nigerian oil industry since its first export in 1958. Geography and access to some of the biggest consumer markets also play a role in enhancing West Africa’s rising profile in the global energy sector. West Africa is the land mass situated just west of the United States; the reserves are just opposite the eastern seaboard of the United States. Being closer to the US eastern seaboard than the Middle East means West African oil can get to one of its most important markets much in a short amount of time with relatively little hassle. For example, the shipping distance from Sekondi/Takoradi in Ghana to Texas is about 5730 nautical miles; from Port Harcourt to Houston, Texas, is 6790 nautical miles. In comparison, the distance between Saudi Arabia, the world’s most prolific oil producer, and Houston, Texas, is 7912 nautical miles. In addition to proximity, the offshore oil in the Gulf of Guinea is attractive to American markets and production firms in particular because it does not have to pass through major choke points or high-risk security areas such as the Straits of Hormuz, the Strait of Gibraltar, the Strait of Malacca, or any other narrow canals on its way from the Gulf of Guinea across the Atlantic Ocean to refinement companies on the southern or eastern seaboard of the United State, where majority of US refineries are

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located near navigable waters to take advantage of economical waterborne transport for both import and export (Servant 2003). Moreover, securing oil investments in the Gulf of Guinea is politically strategic for the United States, which is very much aware of the competition it faces from the growing energy needs of Asian countries such as India, Malaysia, North Korea, South Korea, and China. Securing oil resources in Africa represents a US response to competition from China, whose trade with the African continent, in general, has been on an upward trajectory (30% a year) topping $50 billion 2006 up from $39.7 billion in 2005 (McDougal 2009). China’s entry into the West African oil market is important for several reasons as will be illustrated throughout this book. For some years, West Africa’s offshore oil fields have been increasingly attractive, not least because oil companies are often able to make higher profits per barrel than from other parts of the world (Ellis 2003). According to the Platts Oilgram Price Report (2013), the ocean shipping rate from Nigeria is far cheaper, at $1.45 per barrel, than shipments from, say, the US Gulf Coast to the US Northeast refineries, which would cost a shipper between five and six dollars per barrel. This essentially means more profits for the oil companies when shipping crude from West Africa. It is not just the quantity of oil that is now being drilled in West Africa that has caught the world’s attention and interest. Its commercial oil is of the highest grade and thus highly desirable. West Africa produces the “Sweet crude” variety, which is among the most coveted in the world largely because it contains low volumes of sulfur, suitable for processing light refined petroleum products. The quality of Nigerian crude, for example, is especially well adapted for use in US refineries (Ellis 2003, p. 135), and indeed in other refineries around the world. From the investor’s perspective, the historical circumstances of each country in West Africa also works to the advantage of the international oil companies. At least from the oil companies’ view the fact that West African oil is divided up among several relatively weak countries, in different phases of their oil development and confronted by cultural and language barriers (French, English, Portuguese and Spanish), they are unlikely to coalesce into a formidable oil block to pose a major threat in the form of an embargo or other forms of punitive measures. In addition to the economic potential of oil and the foreign direct investment that oil attracts, the subregion is also doing well on the democratic front. The region is experiencing a widening of the democratic space, as evidenced in the frequent holding of national elections, some of

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which have resulted in the change of unpopular governments. Since the end of the Cold War, West Africa’s political systems have undergone both rapid and momentous changes. A region that once accounted for more than 70% of all military coups in Africa is now on a seemingly unstoppable march toward pluralistic forms of governance. Without a doubt, competitive general elections—often conducted under the scrutiny of the international community—have played a pivotal role in this seismic political shift. More West African governments today have been chosen through free and fair elections than at any other time in the region’s history. In the region, as in most parts of sub-Saharan Africa, elections are much more than just a means of choosing public officials and changing governments. Due to the symbiotic relationship between poor governance and instability, elections have also come to be viewed as a means of conflict management (Kanyako 2007). Since 2002 both Sierra Leone and Liberia have consistently conducted free and fair elections. Successive elections in the Gambia, Senegal, Mali, Liberia, Sierra Leone, Ghana, and Nigeria and even a change of regime in Angola have since helped to boost the democratic credentials of the region. There is no military regime in West Africa, a fairly common type of governments in the 1970s and 1980s. Increased democratic space means people have more avenues to express grievances against unpopular policies such as the types often generated by a rapacious and highly profitable business like oil. By all indications therefore, oil, the world’s most sought after commodity, with its vast market opportunities and global reach, should be a blessing to West Africa. If managed diligently the region’s natural resource-driven economies, partly hobbled by the devastating civil wars of the 1990s, should experience a much-needed boost for established as well as prospective first-time oil-producing countries. Even non-producing countries in the region could stand to benefit either directly or indirectly from the foreign investments that are flowing into the region. In April 2019, the Gambia, one of the smallest countries in the subregion with no known natural resources of note, signed a contract with BP to explore for oil and gas in the country. Sierra Leone, Liberia, and Guinea, are all frantically scouring their maritime zones for signs of oil. Like the Gambia, they hope to join the likes of Gabon, Equatorial Guinea, and the region’s oil powerhouses: Nigeria and Angola in harnessing their oil reserves. It is perhaps not surprising, therefore, that within the oil industry and government circles in particular, that a lot of excitement exists about the ongoing discoveries about the region’s energy future. The general expectation is that

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the discovery of oil, the world’s most dominant fuel, can help promote socioeconomic development, as it has done in countries in the Middle East, Russia, and the Scandinavian countries of Norway and Sweden. In spite of these positive developments and high expectations around new oil finds, foreign direct investment, relative stability, and high global demands—the ongoing discoveries have renewed concerns about the possibilities of an entrenched “oil curse,” a phenomenon in which a petroleum-endowed nation or region fails to transform its abundant oil wealth into sustainable growth. These fears are not unfounded. If history is anything to go by, the experiences in the region’s most established oil economies, shows that successive governments (military or democratic) have not exploited their vast oil wealth to benefit their citizens, or to achieve prosperity and their desired socioeconomic ends. Both Angola and Nigeria epitomize this concern: their vast oil revenues have either been squandered or the wealth has not trickled down to their general populations. Even though it earns over $8 billion a year from crude oil sales, Nigeria’s per capita income stands at a mere $290 per year (Ghazvinian 2007). Though Angola’s is higher, at $4980 according to recent World Bank estimates, it is marked by a huge wealth disparity between a small upper class and an increasingly large impoverished population. The other concern is that the introduction of petro-capitalism into a region that has been adversely affected by the resource-fueled civil wars of the 1990s and other major public health emergencies such as the 2014 Ebola outbreak, is bound to have major ramifications for the tentative peace and stability that now prevails in large parts of West Africa. The region consists predominantly of weak states that have experienced varying degrees of challenges to their internal stability since independence in the 1960s. Eight of the 16 countries that make up the West Africa region have experienced various forms of political and social instability in the last two decades. Some of these conflicts—such as the devastating wars in Angola, Liberia, Sierra Leone, and even Nigeria—have been attributed to a combination of resource mismanagement, bad governance, and years of marginalization by the ruling elites of the region’s largely youthful population, of whom more than 64% are under the age of 24 (United Nations Population Fund 2018). Oil and poor governance are bound to have major implications for state and human security in West Africa. An oil bonanza in an environment of weak institutions and poor governance creates all manner of accountability issues as well. A government

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that derives its revenue from oil, evidence from both the region and elsewhere shows, is less likely to be accountable to its citizens. Flush with oil money, or in anticipation of a continued oil boom, oil-rich governments often embark on wasteful public projects with little benefit for the wider population. That is already playing out in the region. In anticipation of a continued oil boom, some of the producer governments have embarked on major politically—driven public projects that only benefit the privileged few. For example, having come into considerable wealth in the 1980s, Nigeria embarked on building a brand-new capital in Abuja, with the construction of the city center alone costing a whopping $3.5 billion (Deloitte 2014). President Bongo of Gabon commissioned the 650kilometer Transgabonais rail line to Franceville in 2005 mainly to move manganese from the interior to the coast, at the cost of $362 million. The end result of all of these rapacious spending is that despite intensive oil production in both countries for more than forty years, the average citizen is no better off than they were before the oil finds in 1955 and 1956, respectively. Unsurprisingly, because of the seeming lack of transparency and accountability, the continuing emergence of a West Africa-wide oil industry has become a magnet for all manner of campaigners and activists, often opposed to the rapacious effects of oil drilling on people, institutions and the environment. Abuses and human rights violations in the oil industry has become a cause celebre for many crusading organizations (and individuals) around the world, including nongovernmental organizations (NGOs) working on human rights, social justice, gender, and peacebuilding. The London-based Global Witness and a host of local advocacy organizations have used a moral and ethical lens and the concept of redistributive justice to draw attention to the negative impacts of the petroleum industry in regions such as West Africa. These campaigning groups argue that the redistribution of profits and the longterm negative effects on peoples and the environment has to be factored into any oil contracts in regions such as West Africa, a region where oil extraction has often been associated with human rights abuses (BarreraHernandez et al. 2016, p. 8; Human Rights Watch World Report 2013). Such critics of the industry, including various domestic and international organizations are quick to point out that in spite of the enormous oil revenues, many citizens remain excluded from, or are at best marginal participants in, emerging oil sectors and the ensuing resource activity. They point out that local communities often tend to bear the risks of losses, such as environmental degradation and health impacts. The main

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environmental impacts are felt in the coastal regions, whose communities often are faced with “localized costs” including abandoned pipelines that cause spills, water, and air pollution, and land damage (BarreraHernandez et al. 2016, p. 7). As a result of growing awareness of the negative impacts of petroleum extraction, the twin issues of transparency and accountability are gaining traction around energy and resource development. There are growing calls by nongovernmental organizations and other watchdog institutions for corporate and regulatory actors to be answerable as well as responsive to the needs of the communities from which the resources are extracted (Barrera-Hernandez et al. 2016, p. 2). Local communities are now asserting their rights to be involved in decisions about energy and projects that impact their traditional ecosystem and way of life. This has energized various “bottom-up” movements and local organizations. They now call for explicit economic and social benefits from energy project development and resource extraction. As a result, virtually all oil companies have now been forced to pay attention to their operational environment. Many adopt Corporate Social Responsibility (CSR) measures that are in theory designed to go beyond purely environmental protection and management and include actions aimed at helping address the problems of the community in which they conduct their business. The broad and diverse set of actions includes those at the micro level (social infrastructure such as roads and hospitals) and macro-level (to tackle poverty, and assist the declining manufacturing and agricultural sectors…) and, as a result, expectations are often generated among local stakeholders with respect to their contribution to the development of the country (García-Rodríguez et al. 2013, p. 375). Such corporate efforts are however limited in their positive impacts on the affected communities. In fact evidence shows it actually causes more harm than good as it often intensifies tensions among various social groups. At the community level, the presence of oil and the mode of distribution of its proceeds have inflamed competition among various social groups, who use corporate support as an endorsement of community claims over others (Watts 2003, p. 64). In the Niger Delta, a recent European Union report found that the way the oil corporations engaged with local communities through development projects caused conflicts between communities participating in such projects and those that did not directly benefit (Baumüller et al. 2011). The discovery of oil and the encroachment into the region’s fragile and unique biodiversity

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by the oil companies carry major implications for the region’s marine and coastal ecosystem, and by extension for its coastal people’s way of life. With two of the region’s largest economies being petro-states, the proliferation of commercially viable oil finds, there are questions around the regional implications in the area of peace and stability. As West Africa is slowly being transformed into a petro-region, some fear that the region might become susceptible to the resource curse phenomenon, as evidenced in the case of Nigeria and to some extent Angola, where entrenched corruption and patrimony has circumscribed the industry. The general thinking is that the ongoing discoveries, if unchecked will have major implications for the peace and stability of one of the world’s most politically—unstable regions. If managed well however petroleum revenues could harness the good potential of oil, spur growth and minimize social conflicts, The tried and trusted methods and strategies utilized by various official (track 1) and unofficial (track 2) methods at thwarting or reducing oil-induced violence and harnessing the transformative powers of oil will play a critical role in preventing such conflicts. These issues are key to understanding the political economy of West Africa’s “oil complex” and its potential for promoting human security, peace and stability.

Objectives and Approach The book maps the correlation between oil extraction and state and human security in West Africa. More specifically, it analyzes oil revenue flows and the role of the various stakeholders (both domestic and international) in West Africa. To do so the book contextualizes the nature of conflicts and human security challenges in oil-producing regions in West Africa as well as identify possible solutions for addressing cases of conflict and human rights violations associated with oil extraction in the region. Theories on human needs as propounded by Burton (1990), civil society, and global governance have been utilized to foster a deeper understanding of the conflict and peace “properties” of oil in a region such as West Africa. The relationship between unmet basic human needs and natural resource agitation and grievances described by Murshed (2002, p. 389) as “motivations based on a sense of injustice in the way a social group is treated.” is nothing new in West Africa. This book expands on that argument as it traces the history and evolution of such grievances in the oil industry. How oil and grievances intersect forms a core element in this analysis in this book.

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Challenges The oil industry is notoriously difficult to study. Politics, the economy, geography, and the actors involved all add to the complexity and challenges. It has often been described by critics as a secretive industry. While official data on reserve estimates are found in different places, there is really no comprehensive state-of-the-art measure of the volumes of proven, probable and possible reserves (Clarke 2008, p. 382). To compound the problem further, oil contracts are treated as state secrets, often managed by the executive branch of government, with details of deals and contracts known only to a closed circle of top government insiders. Furthermore, the field is highly technical and littered with jargon that might pose challenges to an “outsider” researcher with a passing interest in the topic. A typical oil contract is of varied types (production sharing contracts and joint ventures); has many parts and phases (exploration, production, and development) and involves a multitude of powerful stakeholders (both domestic and international) with vested interests ranging from profits to the environment. In spite of the secrecy and difficulties in penetrating a rather reclusive industry, what is often easy to discern is the effects (especially the negative impacts) of oil extraction on a society. The book draws on a review of the relevant documents (including company and newspaper reports) and from interviews and focus-group sessions with representatives of civil society and communities from across the region conducted between 2013 and 2015. It has been further enriched by insights gained from extensive field-based engagements in the region over the last two decades, including fieldwork in Nigeria’s Niger Delta, the twin cities of Sekondi/Takoradi in Ghana’s western region, and in southern and western Sierra Leone and on the coastal and border regions of Liberia. Researching for this book has involved directly organizing or participating in trainings, workshops, and other formal and informal engagements around the extractive industry with civil society thought leaders and community members from countries as diverse as Liberia, Sierra Leone, Nigeria, Togo, Cameroon, Guinea, Angola, the Gambia, and Senegal. Interactions with experts and industry watchers both within and outside the region have also contributed immensely to broadening my horizons and interests in the subject matter. In the summer of 2015 the author traversed London, Belgium, the Netherlands, and the Nordic countries of Norway, Sweden, and Finland in a bid to gain firsthand insight into the transformative influence of oil as

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a critical natural resource and as a global product. To address adequately the strategic challenges that petro-capitalism poses for West Africa’s regional stability and human security, one must understand the transformative powers of petroleum revenue vis-à-vis the complex realities of the region’s changing geopolitical landscape and its linkages to the outside world. Oil industry demarcation is at best an imperfect science, made difficult by the fact that oil flow does not follow the contours of official political boundaries. The countries that compose West Africa include Nigeria and several non-OPEC countries. The latter group includes seven important producers, three small producers, and many nonproducers. The important producers are Angola (defines the southern limit of West Africa), Cameroon, Congo (Brazzaville), Gabon, Equatorial Guinea, Ivory Coast, and Mauritania (defining the northern limit of West Africa). The small to medium producers are Benin, Ghana, and Senegal. The nonproducers include Gambia, Guinea, Guinea-Bissau, Liberia, Sao Tome and Principe, Sierra Leone, and Togo. This book properly contextualizes world-wide oil industry’s operations in West Africa, a strategic enclave in the global political economy. The challenge is that some countries that are economically in West Africa, especially in oil terms, such as Angola and Gabon, are politically not considered West African as they are not members of the Economic Community of West African States. This book breaks new ground in how it approaches the study of natural resources in West Africa. First, it utilizes a West Africa–specific regional approach, with emphasis on countries that are in the two main geological oil zones of the Senegal Basin and the Gulf of Guinea respectively. The regional approach is useful for understanding patterns and trends across a wider geographical area with mostly consistent socioeconomic and political features. A regional study of petroleum industry is the most productive approach to understanding patterns, dynamics, and the modus operandi of a rather reclusive industry. That is mainly because country-specific or firm-specific studies, though important, are not always ideal for capturing larger trends and the complexities of a large and powerful industry. There are other reasons for adopting a regional approach. This is the first time in the history of West Africa that the discovery of oil has taken a regional dimension, with more countries set to become “first-time producers.” Also, the impact of oil on a community and its ancillary effects (oil spills, armed groups, environmental degradation, and piracy, to name a few) are both transnational and regional in scope and are critical to understanding the region’s human security challenges. For example, the coastal communities, which are the frontline

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stakeholders in the region’s emerging offshore oil industry, share similar riverine-based socioeconomic activities (farming, fishing, and trading) and are thus heavily dependent on the coastal terrain for their sustenance. With the oil finds located largely offshore, a threat to their way of life often triggers various forms of social unrest whose impact could be felt across borders. Country-specific or firm-specific studies, though important, tend to utilize a pro-business approach that fails to capture the larger trends and complexities. In Oil and Politics in the Gulf of Guinea, Soares de Oliveira (2007, p. 163) argues that a singular country or company focus would fail to capture other external powerful forces or the wider ramifications in oil investment decisions. As such a regional study of the petroleum industry, as adopted in this book, is the most productive approach to understanding patterns, dynamics, and the modus operandi of a rather reclusive industry.

The Urgency of Oil This is the first time in the history of West Africa that one natural resource has become the common political and economic denominator in the majority of the countries in the same geological zone. More than 12 countries in the region are either oil producers (Nigeria, Ghana, Angola, Gabon, and Equatorial Guinea) or have discovered or are on the verge of discovering oil in commercial quantity (Ivory Coast, Cameroon, Sierra Leone, and Liberia). As more countries continue to explore for oil, there is a need for a deeper understanding of the oil industry in the region, including knowledge of the businesses and cultures involved, along with West Africa’s unique socioeconomic and political context within which an oil economy is taking shape. African hydrocarbons could prove decisive in long-term economic relations, as it a strategic resource base for the modern, industrial, energy-importing world. As such, what happens in (West) Africa’s oil (and gas) will have profound ramifications for both the producer countries and indeed for the global economy. As Clarke (2008) correctly points out, governments may stand or fall on the management of this crucial industry (p. 72). The diverse and competing foreign interests and investments in this part of the world are not understood in depth, largely because their operations often evade scrutiny. As already alluded to at the beginning of this chapter, a theme that will be explored in-depth in subsequent chapters, the leading multinational oil companies are heavily invested in the region.

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This book provides an insight into the motivations and modus operandi of some of the most powerful and wealthiest transnational corporations in the world. Royal Dutch Shell, BP, and ExxonMobil are the world’s second-, third- and fourth-largest transnational companies, respectively (Economist 2012). In spite of their power and influence, not much is known in terms of the details of their contracts or specifics on their general operations. This is not surprising, given that the oil industry is one of the most secretive in the world. Most of the easily available information is put out by the oil companies themselves or through groups that they sponsor, either directly or indirectly. While these pro-industry reports are important contributions in their own right, they do not provide the full picture of what is, needless to say, a very complex, opaque, tenacious, and constantly evolving industry. The key international oil companies (IOCs) that operate in the countries along the Gulf of Guinea and the Senegal Basin share similar characteristics either through multicountry ownerships of oil concessions in the region or as subsidiaries of one another. For example, in addition to the big IOCs such as Shell and ExxonMobil, other lesser-known names, such as African Petroleum and Anadarko have major stakes in several countries in the region. A regional approach helps us better understand their interests and alliances. In very specific terms, therefore, the study provides an opportunity to evaluate the commitments (known in the business world as corporate social responsibility) of profit-seeking companies that operate in a regulatory vacuum with lax laws and weak implementation. The book also provides an alternative argument for curtailing the resource curse. While the linkages between natural resources and conflicts have received immense attention from both scholars and analysts of all sorts (Sachs and Warner 1995; Collier 2000; Collier and Hoeffler 1999, Klare 2002), there is very little focus on the varied nuances of the impact of oil on societies or regions emerging from conflict. The book focuses on the more multifaceted ways in which oil’s impacts are felt at various layers of societies and communities. Among other themes this book explores the “Peace properties” of oil. The argument put forward here is that oil by itself is not a “cursed” resource. In other parts of the world, including the Scandinavian countries, it has been used to propel development, peace, and stability. In West Africa it has the potential to foster communication and dialogue among the various stakeholders. The stakes and investments in oil are often so high that it requires cooperation among

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various stakeholders to make it economically viable. In short, where managed diligently, oil can promote peace and sound development in a region that is desperately short of these markers of progress. Perhaps the most significant relevance of the study is its focus on the perspectives of domestic actors in the region’s petroleum industry. The book advances a theory of local agency in the oil industry by arguing that diverse voices, including from “below” are critical to mitigating the oil curse. Thus the perspectives of local communities, including women’s groups, youth associations, and traditional and religious leaders as well as representatives of oil communities form a centerpiece in this book. The impact of oil on a community and its ancillary effects (oil spills, armed groups, and piracy) are both transnational and regional in scope and are thus important for understanding the region’s human security challenges. In the end, it is these aggregate efforts of countless individuals and groups that make social change happens (p. 98). The key point, which Ugor (2013, p. 85) gestures toward, is that oil communities, often the ones that bear the brunt of the negative effects of oil are not passive but rather active agents of change. This book contributes to our understanding of the agency of community groups in the political economy of West Africa by outlining their perspectives, actions, and counteractions. If nothing else the multicausal, multidimensional, and interconnected nature of the issues surrounding oil in the region requires such a bottom-up understanding of the rationale for the evolution of community groups into what Ikelegbe (2005) refers to as a “mobilizational and agitational force… involving ingenuity, vision, and resilience to get their voices heard in a space dominated by oil-producing governments and powerful international oil companies”.

Book Structure To properly contextualize the complex relationship between a strategic natural resource such as oil and its “conflict properties” in the context of West Africa, I have divided the book into three main parts. The first part (the centrality of oil) provides an analytical background to the growing influence of hydrocarbons in the region’s two main geological oil zones: the Senegal Basin and the Gulf of Guinea. The first section is mainly concerned with the historiography as well as the geological and topographical mapping of West Africa’s emerging oil economy. Here the book provides a general historical overview of West Africa’s oil industry and outline the

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relevant theoretical framework for understanding the “oil complex” phenomenon. I focus on theories in the realm of the political economy of conflict, especially around human needs, the paradox of plenty, resource capture and the rentier state phenomena respectively. In Part II (the stakeholders and core issues), which is made up of Chapters 3, 4, and 5, I focus on the various external and internal stakeholders in the West African oil industry. There I analyze the region’s political economy and its linkages to the global petro-economy. This part also deals with the varied forms of state and human security issues and challenges posed by the rapid incursion of petro-capitalism into West Africa. The role of the producer governments in the region and their national oil companies are also the subject of analysis in this section. The third and final part (oil and peace) is made up of Chapters 6, 7, and 8 provides an analytical assessment of the effectiveness of varied strategies to make West Africa’s “big oil” more accountable to the needs and aspirations of its people. The section outlines in very specific terms the possible outcomes of an entrenched petro-capitalism as well as various multilayered efforts by national, regional, and international third parties to manage oil-related conflicts. It deals with the management and resolution of various types of conflicts in the oil sector, as well as attempts made by various conflict resolution mechanisms to prevent and resolve disagreements and disputes in the industry. This section also contains the conclusion, which weaves together all of the core elements relating to oil revenues and human security. The core argument posited here is that the oil industry will shape West Africa, and will in turn be shaped by other critical centrifugal forces both within and outside the region. This is how the rest of the chapters are broken down, starting with the historical context, then moving on to the stakeholders and their modus operandi; the fiscal dimensions of oil, its impact; agency of local communities, and ending with its implications for the conflict resolution. Chapter 2: The History and Geology of Petroleum in West Africa Commercial oil exploration and drilling in West Africa goes back nearly a century. The region has experienced varied commercial oil exploration phases that spans more than a hundred years. This chapter traces the historiography and phases of the oil industry pointing out that the region’s search for oil has been in fits and starts with exploration halted and resumed often based on major events—some domestic, others global. The

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chapter also points out that West Africa’s oil finds are widely dispersed and unevenly distributed, with the resource found in commercial quantity in its onshore, offshore, deep waters, and ultra-deep waters. There are primary producers, such as Nigeria, Angola, and Equatorial Guinea; and there are secondary producers. The chapter outlines the various ways the geography, geology, and history has positioned West Africa as a key player in the global political economy of oil. It ends with a discussion of the role of technology on the development of the region’s oil industry. Chapter 3: External Stakeholders and the Geopolitics of Oil West Africa has become a magnet for oil companies from all over the globe. More than 500 oil (and gas) expatriate firms are participating vigorously in the region’s upstream and downstream energy sector. These external stakeholders consist of states, investment and equity firms, multilateral agencies, and an eclectic mix of well-established oil companies and various Africa-specialist upstart companies. They are engaged in funding, exploring, drilling, monitoring, and setting the policy agenda that shapes the region’s oil commercial activities. Their collective investment portfolios, commercial activities, and policy strategies have turned West Africa into not just one of the most promising oil zones but also one of the most heavily contested hydrocarbon provinces in the world. This chapter deals with the expatriate business history of West Africa’s oil ventures, tracing its cartel-like beginnings at the turn of the twentieth century, through the colonial period, into the independence and postindependence era. The key finding here is that because of their depth of technological experience, influence, wealth, and global reach, the role of external actors is key to understanding West Africa’s modern resource extraction environment. The chapter concludes with a brief discussion of the wider implications of expatriate business activities for the subregions status in the global oil industry. Chapter 4: Oil Revenues and the State Oil revenues are becoming increasingly crucial to the political economy of West Africa. Both oil-rich and oil-scarce countries in the subregion are generating funds from the intense oil exploration and drilling activities taking place right across the West African coastline. In some countries in the subregion, as much as 85% of export earnings are derived from oil.

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The ensuing revenue streams, which come in various forms—bonuses, taxes, rents, and production sharing or joint-venture contracts—should in theory enable West Africa’s governments to address sorely neglected developmental problems. Though in theory the increased oil revenues enable producer countries to allocate additional resources for infrastructure and social services including construction of roads, hospitals, schools, in practice the monies are often used to fund megaprojects and strengthen state security at the expense of human security. This chapter outlines the different oil revenue streams, their allocation, and the varied ways they impact state and human security, exploring the political economy of oil: in particular, the social, economic, and political ramifications of oil revenue flows in the subregion. It posits that governments’ spending habits as well as foreign and domestic and foreign policies, including investment in public infrastructure and social services, often directly correlate with the price of oil on the global market. All of this in turn carries major implications for both foreign and domestic policy. Chapter 5: Oil and Community Agitation The incursion of petro-capitalism into West Africa has activated grievances among the region’s oil host communities in unprecedented ways. From Pujehun District in southern Sierra Leone to Takoradi in Western Ghana, from Bomahun in southeastern Liberia to the well-publicized Niger Delta in southern Nigeria, the ancillary effects of oil and the mode of distribution of its proceeds have inflamed passions among populations that are often exposed to enormous negative externalities with few tangible benefits. This chapter focuses on the symbiotic relationship between oil and grievances at the community level in West Africa. It explores the eclectic nature of these grievances and the wide array of actions adopted by oilproducing communities in seeking redress for perceived injustices emanating from the region’s emerging petroleum industry. The chapter also focuses on the creative strategies used by various local communities to gain concessions from the international oil companies and the host or producer governments. The chapter concludes that the failure of West Africa’s petroleum industry to translate oil wealth into human-centered development, as outlined by the UNDP (2013), that meets the socioeconomic aspirations of the oil host communities in particular and the countries in the region as a whole has the potential to undermine the region’s shaky peace and stability.

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Chapter 6: Civil Society and Global Frameworks The ongoing discovery of oil across large swaths of West Africa and its negative impacts on people and the ecosystem has attracted a plethora of critics from the nongovernmental sector. This chapter explores the intersections between existing global frameworks and those of local civil society agencies as they promote transparency and accountability in West Africa’s petroleum industry. Unofficial efforts by nongovernmental organizations in articulating the needs and demands of various affected communities across the region are discussed and analyzed. Through their multistakeholder and watchdog initiatives at all levels of society, an eclectic mix of nongovernmental and civil society organizations have continued to exert pressure on producer governments and oil companies for the transparent use of proceeds from the region’s emerging oil wealth. Using a combination of judicial measures, research, and documentation of violations, reports, and in some cases direct nonviolent action, civil society has become a factor in crystalizing the growing influence and impact of petro-capitalism in West Africa. Varied multi-track efforts are critical to ensuring that West Africa’s oil riches become a catalyst for development and sustainable growth rather than a curse that hinders and stunts the region’s socioeconomic growth and undermines its stability. Chapter 7: Managing Disputes in West Africa’s Petroleum Industry The oil industry is one of the most conflict-prone natural resource extraction environments in the world. The sheer scale of the investment, the complexities and protracted nature of the various agreements, the plethora of stakeholders and the bewildering number of interests both domestic and international all coalesce to make disagreements and disputes of all sorts inevitable in the oil industry. This chapter explores the nature and types of conflicts and the mechanisms used to produce successful mutually beneficial agreements in the region’s nascent oil industry. It critically assesses the role of national, regional, and international actors engaged in resolving or preempting the various oil-driven conflicts across the subregion. A combination of track 1 (state level and formal diplomatic) and track 2 diplomacy (informal and nonstate level) have been applied to quell or reduce oil-induced and other natural resource-based conflicts. This chapter also explores the joints policy efforts designed to

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help countries manage their differences through various conflict resolution mechanisms. Chapter 8: Conclusion: Implications for Conflict Resolution In the brief concluding chapter, the issues of oil, peace, and conflict are revisited. The chapter looks at the wide-ranging ramifications (real and perceived) of the expanding oil industry on various facets of life in West Africa: human security, community relations, securitization of the state, military–civil relations, maritime and riverine activities, and international conflicts. It explores the implications of these phenomena for the field of conflict resolution, which emphasizes the amicable resolution of disputes and the fostering of dialogue and communications among the various stakeholders.

Core Themes of the Book On the surface, this is a book about oil. It is about how a natural resource that was at best marginal to the global economy a mere 150 years ago, has now become one of its most critical and most sought after, leading nations who perceive a threat to their energy security to go to war over it. But the book is much more than that just an extractive resource project. It deals with several interconnected and overlapping themes ranging from politics to the economy to protracted social issues in a small but strategic corner of the world. Oil is about profits and state security as it is about people, communities, the environment, and the institutions that shape and are in turn affected by the network of interactions between and among sometimes diametrically opposed forces, both small and gargantuan, domestic and global. Another core theme that runs throughout the book is the relationship of oil, a strategically critical resource, to conflict and peace. Jeff Colgan (2013) considers oil’s relationship to international conflict as “central to understanding contemporary world politics.” Using empirical data from several case studies he showed that petro-states-defined as states that have at least 10% of GDP derived from oil exports-are twice as prone to international conflict as non-petro-states. In Petro-Aggression, When Oil Causes War (2013, p. 11) the author argues quite convincingly that the propensity of petro-states to engage in conflict comes about when leaders, especially revolutionary ones, converts large proceeds from oil into “military

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and political assets in support of aggressive foreign policy.” In what he termed as “petro-aggression,” he points out that “oil income enables aggressive leaders to eliminate political constraints, reduce accountability, and take their countries to war.” Using the case studies of Sudan, Libya, and Iraq, Colgan argued that at the domestic level, oil facilitates risky behavior on the part of petro-state leaders. This argument builds on one posited earlier by Klare (2002) who pointed out that oil intensifies competition between states more than any other natural resource. Some of these, the author points out, are due to historical factors such as the poor delineation of national borders or by attempts of big powers to shore up allies in resource-concentrated but turbulent regions. It is for these reasons, he argues, that the United States in particular has either signed defense pacts with several countries in the region, or has sold huge quantities of sophisticated weapons to these countries. Klare’s analysis also posits that international conflict resolution will come under a lot of strain as nations and nonstate actors engage in a free for all fight to protect “national security” in the case of governments, or to access the oil wealth through the use of force. Klare contends that power struggles over petroleum, among others, will be the engine driving international politics in the near future. As such, the foreign policies of most western governments will be shaped by the desire to control access to these resources. Such policy will be based on military power projection, partly because these resources are often located in the most volatile regions of the world. This point had been taken up a year earlier by the National Energy Policy Development Group in a May 2001 paper when it argued that as natural resources become scarce and depleted, they will lead to more friction between people both within and across borders, and subsequently wars. Signs of these predictions are already coming to pass in West Africa. Oil-fueled border disputes, have intermittently flared up between Nigeria and her neighbors, Equatorial Guinea and Cameroon. In the case of Cameroon the two have engaged in several armed skirmishes over the potentially oil-rich Bakassi peninsula which was awarded to Cameroon by the International Court of Justice in November 2007. In spite of these potential negative impacts, there is also empirical evidence (at least in West Africa) to suggest that oil could help various stakeholders including states and communities better manage their differences in a more peaceful manner. Where oil finds are located near common borders states have realized it is in their best interests to negotiate and amicably resolve their differences to ensure that everyone benefits. They

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are increasingly utilizing various multi-track diplomatic efforts to harness the full potential of oil proceeds and oil-related foreign direct investment for socioeconomic development and the peaceful resolution of conflicts between and within states, as well as at the community levels. The regional lens adopted in this work explores the wide range of creative methods and techniques used at the domestic, national, regional, and global levels, ranging from formal peacemaking to grassroots human rights advocates, to address the region’s intractable conflicts. Harnessing the “Peace properties” of oil is key to making West Africa, home to 5% of the world’s population, strong, secure, viable and a dependable member of the global economy.

Summary West Africa is in the midst of an oil frenzy. The region is projected to provide around 7–10% of the world’s total output in the next decade. A constellation of factors has coalesced to turn the region into an “increasingly attractive prize both by major energy-importing states and by transnational energy corporations” (Raphael and Stokes 2011, p. 22). These factors included technological advances in the way petroleum is explored and drilled; high global demand; seemingly endless upheaval in the Persian Gulf and North Africa, where the world’s largest oil reserves are found; the phenomenal rise and growing energy needs of China; and the consistently high prices that oil fetches in the international market. The region’s oil is generally of the highest quality (commonly called sweet crude, in petroleum parlance) and thus highly desirable: it is less costly to process into the refined product. Also, West Africa’s proximity to Europe and the United States means its oil can get to some of the largest and most important global markets much faster and cheaper as opposed to oil from places like the Middle East. From the oil companies’ perspective, the fact that most of the oil finds in West Africa are located offshore is a major incentive to source there. This is because such exploration and drilling make it largely immune to onshore instability and communitylevel conflicts. Furthermore, the West Africa region itself has a very small local consumption market, meaning that the vast majority of whatever is produced will be headed mainly for the international market. This book explores the reasons for the region’s rise in profile, the modus operandi of the varied stakeholders, including the responses of the grassroots communities often affected by the negative consequences of oil drilling and

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the efforts at peacemaking. What happens in West Africa’s oil industry has major implications for the rest of the world.

References Barrera-Hernandez, Lila, Barry Barton, Lee Godden, Alistair Lucas, and Anita Ronne. 2016. Sharing the Costs and Benefits of Energy and Resource Activity: Legal Change and Impact on Communities. Oxford, UK: Oxford University Press. Baumüller, Heike, et al. 2011. The Effect of the Oil Companies’ Activities on the Environment, Health and Development in Sub-Saharan Africa. European Union (EU) Parliament Commissioned Study. London: Chatham House. Black, Brian C. 2012. Crude Reality. Lanham, MD: Rowman & Littlefield. Burton, John. 1990. Conflict: Human Needs Theory. London: Palgrave Macmillan. Clarke, Duncan. 2008. Crude Continent: The Struggle for Africa’s Oil Prize. Glasgow: Profile Books. Colgan, Jeff D. 2013. Petro-Aggression, When Oil Causes War. New York: Cambridge University Press. Collier, Paul. 2000. Doing Well Out of War: An Economic Perspective. In Greed and Grievance: Economic Agendas in Civil Wars, ed. Mats Berdal and David M. Malone, 21–112. Boulder, Colorado: Lynne Rienner. Collier, Paul, and Anke Hoeffler. 1999. Greed and Grievance in Civil War. The World Bank. http://elibrary.worldbank.org/content/workingpaper/10. 1596/1813-9450-2355. Accessed September 14, 2018. de Oliveira, Soares. 2007. Oil and Politics in the Gulf of Guinea. New York: Columbia University Press. Deloitte. 2014. African Construction Trends Report. Available at deloitte.com. Economist. 2012. Biggest Transnational Companies. http://www.economist. com/blogs/graphicdetail/2012/07/focus-1. Accessed April 18, 2016. Egbula, Margaret, and Qi Zheng. 2011. West Africa Challenges: China and Nigeria: A Powerful South-South Alliance. Paris, France: OECD. Ellis, Stephen. 2003. Briefing: West Africa and Its Oil. African Affairs 102 (406): 135–138. Frynas, Jedrzej George, and Manuel Paulo. 2007. A New Scramble for African Oil? Historical, Political and Business Perspectives. African Affairs 106 (423): 229–251. García-Rodríguez, Francisco J., José León García-Rodríguez, Carlos CastillaGutiérrez, Silvério A. Major. 2013. Corporate Social Responsibility and Environmental Management. Corporate Social Responsibility 20 (6): 371–384. Ghazvinian, John. 2007. Untapped: The Scramble for Africa’s Oil. Orlando, FL: Harcourt Inc. Human Rights Watch World Report. 2013. http://www.hrw.org/world-report/ 2013/country-chapters/nigeria. Accessed June 27, 2018.

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Ikelegbe, Augustine. 2005. Engendering Civil Society: Oil, Women Groups and Resource Conflicts in the Niger Delta Region of Nigeria. The Journal of Modern African Studies 43 (2): 241–270. Kanyako, Vandy. 2007. Government by the People? The Challenges of Staging Elections in West Africa. Journal of International Operations 2 (5). Klare, Michael T. 2002. Resource Wars: The New Landscape of Global Conflict. New York: Holt Paperbacks. McDougal, Serie. 2009. The Crude Intentions: The Pursuit of African Fuel Minerals and the Need for an Afrocentric Foreign Policy. Journal of Black Studies 39 (5): 803–813. https://doi.org/10.1177/0021934707302645. Mordor Intelligence. 2018. West Africa, Oil and Gas Upstream Market— Growth, Trends and Forecast (2019–2024). Available at https://www. mordorintelligence.com/industry-reports/west-africa-oil-and-gas-upstreammarket. Accessed October 12, 2019. Murshed, Mansoob. 2002. Conflict, Civil War and Underdevelopment: An Introduction. Journal of Peace Research 39 (4): 387–393. National Energy Policy Development Group. 2001. US Government Printing Office, Washington, DC. Palazuelos, Enrique. 2012. Current Oil (Dis)Order: Players, Scenarios, and Mechanisms. Review of International Studies 38 (2) (April): 301–319. Platts Oilgram Price Report. 2013. Regulation and Environment. McGraw Hill Financial. Raphael, S., and Doug Stokes. 2011. Globalizing West African Oil: US ‘Energy Security’ and the Global Economy. Journal of International Affairs 87 (4). Roberts, Adam. 2006. The Wonga Coup: Guns, Thugs and a Ruthless Determination to Create Mayhem in an Oil Rich Corner of Africa. New York: Public Affairs. Sachs, Jeffrey D., and Andrew M. Warner. 1995. Natural Resource Abundance and Economic Growth. NBER Working Paper No. 5398, Issued in December 1995, Cambridge, MA. Servant, Jean-Christophe. 2003. The New Gulf Oil States. Le Monde Diplomatique. Ugor, Paul. 2013. Survival Strategies and Citizenship Claims: Youth and the Underground oil Economy in Post-amnesty Niger Delta. Cambridge: Cambridge University Press. United Nations Development Programme (UNDP). 2013. Human Development Report. Available at hdr.undp.org. Accessed May 12, 2019. United Nations Population Fund. 2018. Adolescents and Youth Report: West and Central Africa. Watson, Mark. 2009. America, Africa and Oil. Available at http://www. markswatson.com/afrioil.html. Accessed September 10, 2018. Watts, Michael. 2003. Economies of Violence: More Oil, More Blood. Economic and Political Weekly 38 (48): 5089–5099. World Bank. 2012. World Bank: Data. Available at http://data.worldbank.org.

CHAPTER 2

The History and Geology of Petroleum in West Africa

The History and Evolution of West Africa’s Oil West Africa was one of the first subregions to make contact with the European world in what eventually became known as the Atlantic intercontinental trading system. Beginning with the Portuguese contact in 1444, the Dutch, French, English, and Scandinavians soon followed. Between the 1580s and 1670s, various European ships landed on West Africa’s shores, including Cape Verde, Senegambia, the Gulf of Guinea, and West Central Africa, which includes Angola. They engaged in commerce with the natives and eventually established trading posts all along the coast to guarantee military protection for their commerce. They exchanged European goods such as cutlery, china, guns, and gunpowder for ivory, reddyed woods, beads, gold, and eventually slaves (De Golyer 1965, p. 169). These early transactional encounters marked the beginnings of West Africa’s interaction and engagement with global commerce. That the region was rich in natural resources was not in doubt. The area was variously known to the Europeans during this period as the Grain Coast, the Gold Coast, the Ivory Coast, and around the eighteenth century the Seep Coast. The Atlantic intercontinental trade marked a major turning point both for intra–West African trade and for the more sinister commerce: the Transatlantic Slave Trade. The region’s early commerce with the outside world was built largely on the exploitation of its natural resources. Three institutional practices established during these early encounters laid the foundation for the © The Author(s) 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5_2

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brand of petro-capitalism that emerged a few centuries later. The first is that most of this early trade was carried out by private traders and businessmen, with some on the payroll of various trading companies, the precursors to today’s multinational corporations. The second is that the companies that were eventually set up were largely state-sponsored or in some cases state-owned. Such was the case for the West India Company, a chartered company set up by the State General’s Office in the Netherlands in 1621. Even where they were considered private, the companies still depended to a large extent on “home country” protection, and occasionally financial support, to keep them afloat. The third point is that these companies were granted monopoly rights over the natural resources, especially to the minerals that were found in abundance in this part of the world. For example, the Dutch granted the West India Company a monopoly over all Atlantic commerce. The British, Spanish, and French all utilized the same practices of favoring their national or home companies over others. All of these practices shaped the extractive industry that emerged in West Africa in the eighteenth century and well into the twentieth century. The West African region has experienced varied commercial oil exploration phases that spans more than a hundred years. Oil was known to exist in West Africa as far back as the eighteenth century, when the Portuguese noticed seeps and slicks in present-day Angola. In spite of this however our knowledge of history and growth of oil in the subregion is rather uneven. For example, not much is known about pre-1950s commercial oil exploration and production. During the colonial era (between 1857 and 1947), Ghana was known to the British (and French) colonial authorities who administered the region as the Seep Coast—on account of the number of tarballs and other evidence of oil that were found along the coast. (New African 2012). Between the eighteenth century, when knowledge of the existence of oil became known, to the dawn of the twentieth century, when the British discovered oil in commercial quantity in the Niger Delta, major powers—including Britain, France, Germany, the USA, Portugal, Spain, and international oil companies such as Shell and Exxon, to name just two—vied for control of the continent’s vast natural resources and engaged in frenetic prospecting for commercial oil. In spite of the overwhelming evidence of the availability of oil in the region, it was not until the turn of the twentieth century, when the British discovered commercial oil in Nigeria’s Niger Delta in the early 1930s,

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that most of the world started paying attention to West Africa’s oil viability. The reasons for the delay in harnessing West Africa’s oil potential are manifold, ranging from financial, logistical, political, economic, and technological challenges. The most important of the reasons for the delay lies elsewhere, in other parts of the world, where the technology and the capital to extract oil first started. The Drake Well oil creek drilling in Pennsylvania in 1859 is generally considered to be the genesis of modern oil drilling. Edwin L. Drake, a conductor for the New York and New Haven Railroad, who had no prior knowledge of the oil business, is known as the “father of the petroleum industry” because he devised a technology and technique of driving a pipe down to protect the integrity of the well bore that revolutionized how crude oil was produced and launched the industry on a large scale (American Oil and Gas Historical Society 2019). Prior to Drake’s revolutionary techniques, early oil exploration and drilling was unsophisticated. Primitive methods of locating oil were largely through trial and error, known in the industry as “wildcatting,” often undertaken by enthusiastic prospectors with no scientific background or knowledge and who largely depended on guesswork. But what these early oil moguls lacked in scientific method they more than made up for in enthusiasm and tenacity. De Golyer (1965, p. 120) described it best: “Most of the world’s early production was found by men who knew no more of origin or occurrence of oil than they did of the inner workings of a slot machine. They drilled. They pulled the lever and hoped for the jackpot.” As one could imagine, such a rudimentary search for what was soon to become the world’s most sought after resource, was highly inefficient and expensive too. De Golyer gave the example of the United States, where in 1948 “out of the 6,182 wildcat wells that were drilled (at the cost of about a billion dollars each) seven out of eight were dry” (1965, p. 120). Following Drake’s remarkable discovery, the nascent oil industry began to register modest progress in the next four decades. Thanks largely to his contributions to the industry, the great age of oil discovery started in earnest in the twentieth century when the first great oil strike was recorded on January 13, 1901, at Spindletop in eastern Texas, near the Louisiana border (De Golyer 1965, p. 117). This was the first-recorded large-scale commercial oil well. Shortly after these technological breakthroughs of drilling for oil, modern techniques of harvesting oil in commercial quantities (including the

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dry rotary auger method; rotary drill; and the mechanical percussion drill method) all began to spread to other parts of the world, including Europe, Asia, the Middle East, and subsequently sub-Saharan Africa. At the time of Drake’s discovery, in the latter half of the nineteenth century, Russia, with one of the world’s known oil reserves began to modernize its oil production in the highly lucrative Baku region by replacing its unsophisticated manual-labor techniques, where locals reportedly used “rags and buckets” to scoop up oil sleeks, with modern and more sophisticated borehole techniques (Goldman 2008, p. 18). The Middle East, which is today the world’s largest-known deposit, did not hit oil until the beginning of the twentieth century, with the discovery of oil in Iran in 1907, followed by Saudi Arabia in 1938 by the ARAMCO Consortium (Goldman 2008, p. 21). Why did West Africa lag behind? To start with, oil is a very difficult and complicated natural resource to harness. Prospecting for it efficiently requires a deep knowledge of geology as well as huge financial resources. It is one of the most capital-intensive industries in the world. Locating oil, especially in the early days when oil-drilling technology was in its infancy was incredibly difficult, made all the more difficult by the fact that those initial efforts were not backed by science. As Golyer reminds us, it wasn’t until the twentieth century that the field of geology truly gained recognition in the oil industry. Prior to that, the industry depended largely on digging holes and hoping for the best. Even though they knew of its commercial worth, the colonial authorities in West Africa had a hard time locating oil and an even harder time drilling for it. With the entry of geologists who used scientific methods to locate oil, most of the guesswork in oil exploration was eliminated. Geology and other scientific methods helped determine with more certainty the availability (or not) of oil, the quantity of the find, as well as help determine whether it is technically feasible to extract and the overall commercial viability of the enterprise. The combustible nature of the material makes extracting oil, processing it, and making it available to the end user even more complicated. The field of geology helped make the industry safer and more efficient. With the scant information about the genesis and modus operandi of the oil actors before 1950, scholarly and public analyzes do not bother to interrogate the nature and forms of horizontal and vertical relationships, often hugely disadvantageous to the West African countries, that evolved among the stakeholders, both local and international. The role of

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the colonial state and the pioneer oil explorers, many of whom were wildcatters, is key to understanding the nature of the industry that emerged in the late nineteenth century in what became the oil-producing countries of Angola and Nigeria. Potential for economically viable oil has been recognized since at least the nineteenth century, when sustained exploration for oil in most countries commenced (Clarke 2008, p. 3). The region’s oil exploration and development occurred over four main time periods (colonial/preindependence; postindependence; post–Cold War, and the globalized twenty-first century). Each historical time period registered slow but steady progress toward prospecting, exploring, and developing commercial oil in the region. Colonial Period/Preindependence (Exploration and Discovery) The growing demand for oil, partly fueled by the invention and wide use of the internal-combustion engine created a huge demand for and an acute shortage of petroleum. At the turn of the twentieth century, oil production was heavily concentrated in a handful of countries. For example, in the whole of the British Empire, commercial oil was produced only in Burma and Canada by 1900. Though the oil shortage was marginally offset (3.8%) by commercial production in countries such as India, Canada, Trinidad, Egypt, and Brunei, it did not adequately address the limited availability problem (Steyn 2006, p. 251). By 1918, at the end of the First World War, the frenetic search for reliable oil supply forced the European powers to look elsewhere for alternative sources of fuel, a commodity that had proven decisive in the just-concluded war. West Africa was a natural choice, as it was already known at that point that pieces of bitumen and oil seepages were noticeable over a wide geographical area in the zone now known as the Gulf of Guinea. The various European powers made more funds available, both as loans and grants, to various oil prospectors from their home countries or friendly governments. For example between 1945 and 1958 the French government quadrupled its tropical Africa investments with special focus on “countries bordering the ocean” (Twomey 2001, pp. 80, 81). It was during this post-World War era period that the economic structures, policies, and political relations that have had a lasting impact on the subregion were created. These had an enduring legacy on the way and manner in which the industry evolved. From about the 1850s and 1940s, most of sub-Saharan Africa was under the direct or indirect control of

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seven European powers: Great Britain, France, Italy, Germany, Belgium, Spain, and Portugal. West Africa, which was dominated by the French and British, was central as it had vast natural resources and trade goods, including palm oil, cotton, palm kernel, rubber, gold, and groundnut, that the colonialists desperately needed. The control for these resources set in motion both a political and economic battle for supremacy, between especially Great Britain and France that was to have a major impact on the region and indeed the rest of the world. The colonial era established beyond all reasonable doubt that the region had oil. Around the mid-eighteenth century, the Portuguese discovered oil in what is now Angola. Oil and gas exploration in Ghana (which was then known as the Seep Coast) got underway in 1896 when the West Africa Oil and Fuel Company (WAOFCO) commenced exploration in an area known as Half-Asini. In 1909 the French company, the Société Française de Petrole, followed suit with their own commercial prospecting and drilling (Openoil 2012). Soon after this surface indication of petroleum, which included mainly onshore oil seeps, was also established in at least seven countries in and along the Gulf of Guinea, including Gabon, Cameroon, and Nigeria. In 1926 petroleum exploration was initiated in Gabon by the French company Elf, with drilling commencing in earnest in 1934 (Clarke 2008, pp. 158, 181). With petroleum exploration underway during the colonial period, the ultimate goal for Britain and France in particular, was to exploit the critical resource for commercial purposes. The colonial authorities also centralized the process of commercial exploitation by encouraging the joint public-private enterprises. Not surprisingly, most of the international companies during this era, including those focused on oil, were either partly or wholly government—owned. Such an arrangement meant for example that the security and safety of the companies’ overseas staff were the ultimate responsibility of the home governments. As part of the centralization process during this era, all policies on extraction were decided in major cities like London and Paris, and with the sole aim of benefiting the home country and not the local economies, as was the case with most of the region’s extractive industry. For example, as soon as oil was discovered in Nigeria, the British government passed an ordinance in 1914 making any oil and mineral under Nigerian soil legal property of the British Crown. The colonial governments gave special concessions to their home country oil companies. On the eve of the Second World War, in 1938, the British government granted Shell (then known as Shell D’Arcy) sole

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rights over the exploitation of “all minerals and petroleum throughout the entire colony” (Steyn 2006). Thanks in large part to the devastating effects of the Second World War, the 1950s were particularly active in the exploitation of the region’s oil industry. The colonial governments made a desperate attempt to commercially exploit West Africa’s oil. With their respective economies in ruins following the conclusion of the war, both Great Britain and France started vigorously drilling for oil in their respective colonies. They opened up the industry to more companies which in turn led to the proliferation of oil prospecting in the region. Though these initial attempts were short-lived, it was a success as the investment paid off as they opened up the industry to more investments and eventual commercial discoveries which began to “yield dividends by the 1950s with the commencement of commercial drilling in Nigeria, Gabon and Angola” (Clarke 2008, p. 181). Angola’s first onshore oil was produced in the 1950s, and the first offshore was produced in Cabindan waters in 1968. Côte d’Ivoire and Gabon were to follow shortly in 1953 and 1956, respectively. In the Gambia, modern oil exploration got underway in 1956. Four years later, in 1960, British Petroleum (BP) drilled two onshore wells, followed by the purchase of acreage by Chevron. Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after a half century of exploration through largely to the pioneering efforts of the Nigerian Bitumen Company and British Colonial Petroleum companies, respectively, which by 1908 had succeeded in drilling for oil in an area known as Okitipupa, in present-day Ondo state. Oil exploration in Cameroon started some 70 years ago (Clarke 2008, p. 175; NNPC 2019). It was also during this era that the first commercial oil from the region was exported from Nigeria in 1958. This intensified the search for commercial oil in the region, which has not abated since. The struggle for independence upped the stakes and altered the political and economic landscape for both West Africa and the colonial powers in profound ways. Given the unpredictable and sometimes violent nature of independence, especially following Guinea’s turbulent separation from French colonial rule in October 1958, it became a race against time for the European colonial powers to either exploit as much of the region’s natural resources as possible or to design new arrangements with the soon-to-be independent countries that will enable former colonial masters to continue to hold sway over the region’s economic independence. They did both. Home governments and the oil companies redoubled their

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efforts, knowing fully well that independence for the region and continent as a whole, was just a matter of time. West African countries were soon to gain their independence from the European powers in the 1960s, only to realize that political independence did not equate to economic independence. Because of the critical nature of oil and its strategic importance to nations even in its early phase of its widespread use, even political independence did not necessarily lead to the severance of African nation’s economic ties with the former European colonizers. If anything, the business and economic ties were strengthened further, to the extent that the same companies that were visible and active during the colonial era remained the dominant players in the extractive industry in the region even after independence. Political independence from colonial rule did not amount to economic independence. The newly independent African leader’s hands were tied. Their countries lacked the financial means and the technical know-how to drill for oil on their own. For companies such as Shell and Exxon, it was business (and profits) as usual. The preferred strategy of the African leaders, therefore, was to seek some kind of an accommodation with the various foreign powers, mainly those from which they had just gained independence, to continue to extract and sell their natural resources, including oil (Twomey 2001, p. 81). Postindependence and the Cold War (Drilling and Exportation) The period following the end of colonialism (1960s–1990s) was by far one of the most important and active phases in the oil exploration and development in West Africa, as it witnessed drilling and commercial exploitation. For the first time, control of the region’s natural resources came under the direct governance and control of Africa’s postindependence leaders, who were desperate for funds to undertake their various national development projects. In a bid to gain economic independence, the continent’s new political masters embarked on various capital accumulation projects, chief among which was the commercial exploitation of their natural resources, including oil. They wasted no time in exploring for oil, whose world demands had risen considerably. For example, less than a year after Sierra Leone gained independence in 1961, its government granted oil exploration rights to the little-known Tennessee Sierra Leone Inc., an affiliate of the Tennessee Gas Transmission Company of Houston, Texas (New York Times, March 24, 1962). Around this time,

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in the first half of the twentieth century, shallow drilling for prospectivity was conducted by Ghana, Côte d’Ivoire, Nigeria, and Gabon, with surface indication of oil and gas recorded in all geological littoral areas at this time (Clarke 2008, p. 73). The situation in Ghana exemplifies the methods, approach, and dilemmas faced by newly independent African countries who for their survival looked both to the West and also to each other through various bilateral and multilateral arrangements. The country was known not just for gold but had signs of oil by the time it gained independence in 1958 from Great Britain. In 1963, AGIP an Italian oil company was awarded a contract to construct an oil refinery at the port of Tema, Bight of Benin to process imported crude oil from neighboring Nigeria. In its heyday in the mid-1970s, the plant had a processing capacity of 43,000 barrels a day (McCaskie 2008, p. 322). While importing oil from its neighbor, Ghana embarked on aggressive oil prospecting as a way to reduce dependency on outsiders, a stated objective of its independence leader, Kwame Nkrumah. Through his efforts and initiatives, including nationalizing TOR in 1975, Ghana became a modest oil producer in 1978 (Clarke 2008, p. 181). By the late 1960s—a few years after independence for most African countries—oil exploration, which had until that point largely been confined onshore, started moving offshore. International oil companies shifted their focus to offshore exploration again, partly influenced by global developments thousands of miles away. On September 10, 1964, the United Nations ratified what became known as the Geneva Convention on the Territorial Sea and the Contiguous Zone. Article 1 of the 32-article document states categorically that “the sovereignty of a State extends, beyond its land territory and its internal waters, to a belt of sea adjacent to its coast, described as the territorial sea” (Clarke 2008, p. 73; United Nations 1964, p. 2). This provided West Africa’s littoral states with the legal instruments to extend their reach beyond the territorial borders to maritime borders with full access to all the natural resources contained therein. By the 1970s, the focus on the offshore terrain progressed steadily, with some spectacular results. Initial wells were drilled on the shelf and shallow water, followed by drilling in deeper waters, especially in countries like Angola, Gabon, and Nigeria, paid off with series of discoveries (Horn 2018).

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Post–Cold War (Expansion and Consolidation) The Cold War had a major impact on oil exploration in the region. Many countries were hobbled by the constraints imposed by the division of the world into two main spheres of influence: communism versus capitalism. Both Nigeria (1967–1970) and Angola, two of the region’s leading producers, were embroiled in major civil wars that claimed the lives of millions of their citizens. Things changed quickly in the industry, however as oil exploration and development progressed rapidly in the aftermath of the Cold War with search for commercial oil moving into the deep water, off the Atlantic Coast where 40% of new oil fields, yielding more than 500 million barrels have been found (McCaskie 2008, p. 318). Twenty-First Century and Beyond (Commercial Export) By the dawn of the twenty-first century, West Africa had gained recognition as a growing oil province, one to be reckoned with in the global petroleum industry. It had witnessed a series of new ventures, which includes the expansion of the oil search from traditional and wellestablished countries to new prospects. Another focus involves moving the prospecting for oil from onshore (with all its attendant consequences) to deep and ultra-deep waters. Angola has already set the pace where twothirds of its newest and most profitable finds are in ultra-deep waters off the coast of the Atlantic Ocean (Clarke 2008, p. 73). Advances in technology, trade liberalization, and increases in foreign direct investment (the theme of Chapter 3) all helped to open up the subregion’s oil industry for further exploration. The end result was spectacular oil finds, which attracted more investors. Now West Africa is firmly established as an oil province and a key member of the international petroleum industry. The region’s search for oil has been in fits and starts. Serious exploration was halted and resumed often based on major events—some domestic, others global—much larger in scope, such as the First and Second World Wars and the fight for independence and indeed available technology. Because of the technologically—intensive nature of oil exploration and extraction, the hydrocarbon sector, as important as its always been to the region’s political economy, developed relatively late, compared to less financial, and technology intensive extractive industry such as diamond, timber, or gold. Only 20 years ago neither Equatorial Guinea nor Ghana was known for oil (Clarke 2008, p. 262). That has changed with oil exploration in all countries of the region.

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Once the region gained independence, the new leaders were faced with challenges in exploiting their oil potential. They lacked the resources and technical know-how to harness oil—a notoriously technology-heavy and large investment industry. It was a catch-22 situation: severing political ties while as a matter of expediency relying on the Europeans for economic development. Africa’s new leaders quickly found out that political independence did not mean economic freedom. To be able to make the best out of their natural resources they still needed to rely on overseas partners, often their former oppressors, to help them harness the resource. After years of difficulty Africa is positioned for improved exploration and development, with West Africa as the main source of oil, accounting for well over half of total production of the continent’s oil. The region’s crude output has been rapidly improving and will continue to do. What is new is the scale of the finds and the growing number of actors, both domestic and international. By 1980 only Nigeria was producing oil on a commercial basis. By 2000, 12 of the 16 countries in the region had commercially—viable oil finds and productions. Due to rising competition in the global energy market, the nature and character of the industry has witnessed a dramatic shift over the last three decades.

West Africa’s Geologic Oil Provinces Where the region known as West Africa starts or ends is a matter of intense debate. According to the United Nations Statistics Division, Western Africa comprises 17 countries: Benin, Burkina Faso, Cape Verde, Côte D’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Saint Helena, Senegal, Sierra Leone, and Togo. Others agree- to some extent. The Economic Community of West African States (ECOWAS), the African Union, and even the African Development Bank Group (2005) have different geographic subcategorizations. Member countries making up ECOWAS do not include St. Helena or Mauritania (which left in 2002). The highly regarded Oil and Gas Journal adds Cameroon, Congo (Brazzaville), and Mauritania to the count of countries that make up West Africa. According to the African Development Bank (2013) the region consists of 15 countries, eight of which are from the CFA zones while Nigeria, Ghana, Cape Verde, Guinea, The Gambia, Liberia, and Sierra Leone are non CFA members. With the exception of Nigeria and Cote d’Ivoire all member countries of the region are net oil importers.

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Because oil is often found concentrated in overlapping “zones,” political boundaries alone are insufficient and sometimes unhelpful in situating petroleum’s geographical enclaves. For example, the Gulf of Guinea, which is one of the richest oil provinces on the African Continent, extends all the way to Angola, which is technically in Southwest Africa. The West African continental margin is defined as the coastal area extending from Morocco in the north to the Cape of Good Hope in South Africa (see Fig. 2.1). Twenty-three countries share the coastline along

Fig. 2.1 Oil zones of West Africa: February 2010 (Credit U.S. Geological Survey. Department of the Interior/USGS)

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the West Africa margin. Presently, 9 of these 23 countries in the subregion are oil exporters: Nigeria, Angola, Equatorial Guinea, Congo (Brazzaville), Gabon, Cameroon, Ivory Coast, Democratic Republic of Congo (DRC), and Mauritania (Ceraldi et al. 2017). When it comes to oil, politics, economy, and geography are sometimes diametrically opposed. As the territorial waters of these countries, so far found to possess large economic resources, continue to be actively explored for hydrocarbons the debate around the geographical confines of what constitutes West Africa will continue to feature in policy discussions. In oil production terms, West Africa can be divided into four main categories: mega producers; major producers, modest producers, and nonproducers. Angola (which defines the southern limit of West Africa) and Nigeria (the heart of West Africa) are by far the region’s oil giants. Between them they account for more than 60% of all oil produced in the region. The second category, major producers, includes Gabon, Ghana, and Equatorial Guinea. The modest producers are Côte d’Ivoire, Cameroon, and Mauritania (defining the western limit of the region). The smaller countries, including the Gambia, Guinea, Guinea-Bissau, Liberia, Sao Tome and Principe, Sierra Leone, and Togo, are at this stage prospects, but nonproducers (Table 2.1). Much like the discussion around the geographical boundaries of West Africa, the exact location of its oil finds are even less clear. The simple reason is that unlike other minerals such as coal that tend to stay where they are formed, oil is relatively mobile, drifting and moving around by circulating waters and other geological forces (De Golyer 1965, p. 120). The region’s geology and morphology provides further insights and complexities about the exact location of West Africa’s oils. Geography, like history and politics, has shaped the oil industry in the subregion in profound ways. The West African region consists of a wide-ranging and Table 2.1 Oil endowment in West Africa Major producers

Small producers

Negligible/Nonproducers

Nigeria, Angola, Cameroon, Congo (Brazaville), Gabon, Equatorial Guinea, Cote d’Ivoire, Mauritania, Ghana

Benin, Senegal

Gambia, Guinea, Guinea-Bissau, Liberia, Sao Tome and Principe, Sierra Leone, Togo

Source Author

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varied topography including coastal sedimentary basins in deepwater areas of the Atlantic Ocean (USGS 2006, p. 1). So far oil has been found in a combination of onshore, shallow water, deepwater and, increasingly, the ultra-deepwater enclaves where Angola gets most of its oil. In spite of the wide sourcing of oil, the commercially viable finds thus far are relatively concentrated in four main geological oil zones: (1) the Senegal Basin, (2) the Gulf of Guinea, (3) the Niger Delta, and (4) the west-central coast (United States Geological Survey World Petroleum Assessment 2000). Each of these oil provinces will be discussed in brief detail. The USGS has undertaken the most comprehensive study of the West Africa subregion energy resources. Since 2006, the agency has produced more than seven voluminous reports on some key aspects of the region’s hydrocarbon (oil and gas) industry, ranging from its known reserves (The chance of actually getting the oil out is greater than 50%) to its proven reserves (chances of extracting oil greater than 90%), to its possible reserves, the likelihood of recovering the oil in place is significant, but less than 50% (Amaded 2019). The highly technical, geology-based reports assessed “the potential for undiscovered oil and gas and technically recoverable oil in the United States and the world” (USGS 2006, p. 1). The report divides West Africa into four main geologic provinces. The West Central Coastal Province consists of the coastal and offshore areas of Cameroon, Equatorial Guinea, Gabon, Democratic Republic of the Congo, Republic of the Congo, Angola (including the disputed Cabinda Province), and Namibia. The area stretches from the east edge of the Niger Delta south to the Walvis Ridge. It includes the Douala, Kribi-Campo, Rio Muni, Gabon, Congo, Kwanza, Benguela, and Namibe Basins, which together form the Aptian salt basin of equatorial West Africa. The area has had significant exploration for petroleum, with more than 295 oil fields having been discovered since 1954. Since 1995, several giant oil fields have been discovered, especially in the deepwater area of the Congo Basin (USGS 2006, p. 1). The Gabon-Mauritania-Senegal-Bissau Province is an upstream destination that is still in the early stages of a new exploration cycle (Clarke 2008, p. 263). It is situated along the northwestern African coast, covering some 600,000 square kilometers of offshore margin and extends and includes parts of Western Sahara, Mauritania, Senegal, the Gambia, Guinea-Bissau, and Guinea. The USGS has carried out two major assessments of the Basin, first in 1982 and again in 2003. Both concluded that the basin “is underexplored for its large size and does have possibilities

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in both the offshore and onshore potential prospects in all three total petroleum systems” (Mattick 1982, p. 36). It is a classic frontier with a large deepwater potential (Clarke 2008, p. 266). This province is composed of several basins, the most prospective being the Senegal Basin. One accumulation off Senegal is thought to contain 800 million bbl of heavy oil but remains unproven, while in Mauritania some discoveries totaling 500 million bbl (2P) have been made in deepwater (Barkindo and Sandrea 2007). Of growing importance is the Senegal basin. Compared to the Gulf of Guinea Basin, this province has a limited exploration history. The exploration has stretched further north into the joint zone of cooperation between Senegal and Guinea-Bissau, where a heavy oil venture is under active consideration. In Senegal, most of the available acreage has now been leased to independents, with more scheduled to be assigned as more seismic data are analyzed (Clarke 2008, p. 78). Here a total of six oil fields and 10 gas fields were discovered in 2009; most of the industry took notice because it proved, in USGS terms, “the existence of active petroleum systems” (USGS 2006, p. 17). The West African Coastal Province This area, much like the other emerging oil provinces, has witnessed intensive oil exploration over the last two decades. It covers Guinea, Sierra Leone, and Liberia. All three countries have embarked on a flurry of activities after seismic data obtained from 10 exploration wells dug in 2009, ranging from 100 to 470 meters on the continental shelf demonstrated the existence of “an active petroleum systems” (USGS 2006, p. 1). After the 2011 assessment, three deepwater discovery wells were drilled in the Sierra Leone offshore part of the Liberia Basin. This growing attention is beginning to pay off. Sierra Leone has discovered commercial oil and so has Liberia. Using a geology-based assessment, the USGS estimates the province’s technically recoverable hydrocarbon reserves at 3200 million barrels of oil, 23,629 billion cubic feet of gas, and 721 million barrels of natural gas liquids. The estimated mean size of the largest oil field that is expected to be discovered is 783 million barrels of oil (USGS 2006, p. 10).

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Gulf of Guinea and Niger Delta As defined by the USGS, the Gulf of Guinea Province includes the coastal and offshore areas of Côte d’Ivoire, Ghana, Togo, and Benin, and the western part of Nigeria’s coast. The province contains the Cote d’Ivoire, Tano, Central, Saltpond, Keta, and Benin Basins and the Dahomey Embayment (USGS 2006, p. 1). Its proven oil reserves and its potential have attracted global attention for the better part of the last two decades. The Niger Delta covers more than 300,000 square km, with the majority of it in Nigeria, extending onshore, offshore, and into deepwater. It includes the Rio del Rey Basin, and is also the main source of hydrocarbons in Cameroon, Equatorial Guinea, and Sao Tome and Principe. It is the richest of all West African oil zones. The USGS estimates mean volumes of undiscovered, technically recoverable conventional oil resources for the Agbada Reservoirs Assessment Unit in the Niger Delta Province alone at 1616 million barrels of oil, and the mean size of the largest oil field expected to be discovered at 274 million barrels of oil (Brownfield 2016, p. 1). No discussion on oil in West Africa, or sub-Saharan Africa for that matter, would be complete without at least an honorable mention of the regional giant, Nigeria, the continent’s oldest and most prolific oil producer. It’s Africa’s largest producer and the world’s sixth-largest producer, with surplus production capacity. The country has been engaged in exploration and eventually commercial oil production since 1930. It has oil reserves of 33 BBLS (Clarke 2008, p. 87). The country produced more than 2.4 million barrels of oil per day in 2014 and has consistently produced between 2.1 million and about 2.6 million barrels per day for the last 18 years (Investopedia 2015). But as is typical with most petro-states, oil has also stunted the growth of other industries in the country. In 1974, Nigeria was the world’s thirdlargest coffee producer, and today 95% of the Nigerian economy is based on export of petroleum and petroleum products. One hundred and fifty thousand barrels of oil are stolen each day from pipelines by gangs of youth aggrieved by the lack of investment in basic infrastructure in their communities (Pinto 1987) This has had a negative impact on the economy, especially on local communities impacted by the ongoing exploration. The myriad ways in which communities articulate their grievances in the oil industry is the subject of Chapter 4. Exploration for oil in Ghana goes as far back as the nineteenth century. Despite this early start under the British Colonial administration, serious

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and sustained efforts to find oil only got underway in earnest in the early 1960s. The Ghana National Petroleum Corporation was established in 1983 to coordinate oil exploration and exploitation. (Van Gyampo 2011, p. 49). All of these earlier efforts eventually paid off when in 2007, Ghana discovered oil in commercial quantities west of Cape Three Points in its western region, making the country an attractive investment destination for emerging international oil companies and their suppliers. With production beginning in December 2010 and offshore oil reserves estimated at three billion barrels, Ghana is in a position to be described as an oilrich country. According to Tullow Oil, Africa’s largest independent oil company and a major foreign player in Ghana’s oil industry, an estimated 110,000 barrels of oil per day were being produced in Ghana as of the end of 2012 (Arthur and Arthur 2014). Congo, Gabon, Cameroon, and Côte d’Ivoire are secondary producers, with continuing and future exploration potential. The rest of the category is made up mostly of landlocked Sahelian states (Mali, Chad, Niger, and Burkina Faso) and several littoral states that are both small and desperately poor—Benin, Guinea, Guinea-Bissau, the Gambia, Sierra Leone, and Liberia all fall into this latter category. But because they (jut) into the highly lucrative Gulf of Guinea, the countries are not necessarily unimportant. Even the Sahelian countries harbor hope of finding black gold deep underneath their sands. There are several nonproducer countries with exploration potential. As a result, several of these countries have restructured their various national oil companies and have opened new exploration hunting grounds to enable them to participate in oil exploration. Role of Technology In order to make up for lost time, the search for oil in the region has now gone offshore, thanks in part to advances in technology. Technological breakthroughs in extracting hydrocarbons from new geological frontiers including deepwater has opened up more prospects for oil exploration. Perhaps the factors that most accounts for the delay in exploiting West Africa’s oil wealth is technology, or the lack thereof. More modern and efficient means of drilling for oil (including the invention of the portable seismic rig in 1920) evolved slowly, spanning over a century. It is not just about the machines necessary to drill for oil but also seismic data to pinpoint and determine the viability of oil in a region. “It was only in the mid-1980s that improved geological understanding, combined with successful adaptation of exploration techniques that led to better seismic quality data” (Clarke 2008, p. 158). Technological advances that now

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allow drilling in seas as deep as 8000 feet simply did not exist or were beyond the reach of most West African governments at the time of independence in the 1960s (Crawley 2002). Improved technologies, more noticeable in the late twentieth century, now allow more rapid and complete surveys. The energy crisis of the 1970s forced energy companies to embark on research and development, and to become more innovative which in turn spurred technological developments. This was made possible in part by the availability and power of computers that enabled geophysicists to more quickly and accurately analyze seismic processes that produced increasingly detailed underground mappings. Such technical advances revolutionized the production of petroleum by greatly extending the capacity to find and produce oil in deeper waters offshore (De Golyer 1965, p. 150). This helped open up new oil and gas frontiers that were hitherto out of reach. Major oil discoveries in the “ultra-deepwater” of the Gulf of Guinea and the Senegal Basin and offshore have ushered in a renaissance in deepwater exploration. Onshore fields in areas where the industry had previously been reluctant to venture are now opening up. Developments in technology have also helped expand the sourcing of oil in the region. Through technology “unconventional” sources of fossil fuels, mainly natural gas and “tight oil” produced by hydrofracture drilling (or “hydrofracking”) in shale formations have dramatically extended West Africa’s energy resources. This has in turn lowered the entry costs for smaller companies, such as the ones that dominate the West African petroleum scene. They have sunk a total of 14,000 oil wells in the region (Anderson and Browne 2011, p. 370).

Conclusion West Africa’s oil exploration and development have played out in fits and starts. The subregion was a latecomer to petroleum production. Geography in part accounts for the delay. Some of the region’s geology is considered to be highly complex, with the most prospective areas feature rugged topography and hostile terrain. The region has approximately 1600 km of coastline, including rough and uneven bays and inlets. For example, the search for oil in Gabon was delayed by swamps, dense vegetation, and hilly terrain (Clarke 2008, p. 158). Furthermore, the most profitable oil finds are located in some of the most densely populated (home to one third of its population) and otherwise economically viable parts of the region. Extracting oil from such sensitive areas requires tact, compromise, and a series of negotiations with the various stakeholders in order to create a win-win outcome.

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This chapter has set out to analyze the historical origins, evolution, and contemporary configuration of West Africa’s oil industry. The chapter outlines the varied ways in which history (colonialism, independence, and the Cold War) and geography (topography and geology) influenced the growth and development of West Africa’s oil industry. It shows that factors both internal to the subregion as well as external have had a profound effect on West Africa’s search for commercial oil. The chapter also points out that West Africa’s oil finds are widely dispersed and unevenly distributed, with the resource found in commercial quantity in its onshore, offshore, deep waters, and ultra-deep waters. There are primary producers, such as Nigeria, Angola, and Equatorial Guinea; and there are secondary producers. Then there are the nonproducers, who are in the majority, though they’ve all been prospecting for oil, some as far back as colonial times, but with limited success. Extracting oil in each area has its advantages, disadvantages, risks, and benefits. The chapter highlights the significance of the regions historical context to understanding its present political economy.

References African Development Report. 2005. Public Sector Management in Africa. Oxford, UK: Oxford University Press. African Development Bank. 2013. West Africa. Available at https://www.afdb. org/en/countries/west-africa. Accessed September 14, 2019. Amaded, Kimberly. 2019. Oil Reserves, Their Categories, and the World’s Largest. American Oil and Gas Historical Society. 2019. First American Oil Well—American Oil & Gas Historical Society. Anderson, D., and A. Browne. 2011. The Politics of Oil in Eastern Africa. Journal of Eastern African Studies 5 (2, May): 369–410. Arthur, Peter, and Emmanuel Arthur. 2014. Local Content and Private Sector Participation in Ghana’s Oil Industry: An Economic and Strategic Imperative. Africa Today 61 (2, Winter): 57–77 (22 Pages, Indiana University Press). Barkindo, Mohammed Sanusi, and Ivan Sandrea. 2007. Undiscovered Oil Potential Still Large Off West Africa. Oil and Gas Journal 105 (2): 30–34. Brownfield, Michael E. 2016. US Geological Services, Assessment of Undiscovered Oil and Gas Resources of the Senegal Province, Northwest Africa. https://pubs.usgs.gov/dds/dds-069/dds-069-gg/REPORTS/ 69_GG_CH_2.pdf. Accessed June 7, 2019. Ceraldi, Teresa Sabato, Richard Hodgkinson, and Guillaume Backé. 2017. The Petroleum Geology of the West Africa Margin: An Introduction. Geological Society 438: 1–16. Clarke, Duncan. 2008. Crude Continent: The Struggle for Africa’s Oil Prize. Glasgow: Profile Books.

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Crawley, Mike. 2002. With Mideast Uncertainty, US Turns to Africa for Oil. Christian Science Monitor. De Golyer, E. L. 1965. How Men Find Oil—Fifty Years of Exploration, 1902– 1952. In Exploration and Discovery, ed. Robert Greenhalgh Albion (1896– 1983). New York: Macmillan. Goldman, Marshall. 2008. Petrostate: Putin, Power, and the New Russia. Oxford: Oxford University Press. Horn, Brian. 2018. What Next for Exploration on the West Africa Margin. Africa Oil Weekly, Presentation on December 12. Investopedia. 2015. The Biggest Oil Producers in Africa. Available at https:// www.investopedia.com/articles/investing/101515/biggest-oil-producersafrica.asp. Accessed September 17, 2019. Mattick, Robert E. 1982. “Assessment of the Petroleum, Coal, and Geothermal Resources of the Economic Community of West African States (ECOWAS) Region” by US Geological Survey. Washington, DC: Government Printing Office. McCaskie, Tom C. 2008. The United States, Ghana and Oil: Global and Local Perspectives. African Affairs 107 (428): 313–332. New African. 2012. Ghana Oil: A Crude Awakening. New York Times. March 24, 1962. Sierra Leone Grants Oil Rights. NNPC. 2019. History of the Nigerian Petroleum Industry. Available at http://www.nnpcgroup.com/NNPCBusiness/BusinessInformation/ OilGasinNigeria/Industry/History.aspx. Accessed February 12, 2017. Openoil. 2012. Oil Contracts: How to Read and Understand Them. London: Openoil. Pinto, Brian. 1987. Nigeria During and After the Oil Boom: A Policy Comparison with Indonesia. The World Bank Economic Review 1 (3): 419–445 (27 Pages). Steyn, Phia. 2006. Oil Exploration in Colonial Nigeria, International Economic History Congress, Helsinki. Available at http://www.helsinki.fi/iehc2006/ papers1/Steyn.pdf. Accessed March 18, 2019. Twomey, Michael. 2001. A Century of Foreign Investment in the Third World. London: Routledge. United Nations. 1964. United Nations Convention on the Territorial Sea and the Contiguous Zone 1958. United States Geological Survey World Petroleum Assessment. 2000. Available at https://pubs.usgs.gov/fs/fs-062-03/FS-062-03.pdf. Accessed November 8, 2019. USGS. 2006. Geology and Total Petroleum Systems of the West-Central Coastal Province (7203) West Africa, Brownfield, Michael E., and Ronald R. Charpentier (Authors). Available at https://pubs.usgs.gov/bul/2207/B/ pdf/b2207b_508.pdf. Van Gyampo, R. E. 2011. Saving Ghana from Its Oil: A Critical Assessment of Preparations So Far Made. Africa Today 57 (4): 49–69. Indiana University Press. http://www.jstor.org/stable/10.2979/africatoday.57.4.49.

CHAPTER 3

External Stakeholders and the Geopolitics of Oil

Introduction West Africa is of strategic importance to the global energy market production and consumption. The region’s crude oil has become a magnet for an assorted mix of external actors from all corners of the world, including India, Malaysia, Singapore, and of course China. The region, has attracted global attention and immense foreign direct investment over the last two decades from a diverse mix of foreign governments, international oil companies, large commercial and merchant banks, investment houses, and state agencies of all sorts (Clarke 2008, p. 388; Ellis 2003). External involvement in West Africa’s oil industry comes in different forms: prospecting, drilling, construction and management of oil sites, marketing, monitoring, and funding are the most obvious. One of the most significant of these, one that drives the rest, is foreign direct investment, a reference to an investment from a party in one country into a business or corporation in another country with the intention of establishing a lasting interest. The region’s oil sector has proven to be particularly attractive to foreign private sector investors because of its ongoing discoveries. More than 60% of sub-Saharan Africa’s $10.25 billion investment capital funneled into West Africa over the last decade has been in the oil sector. Thanks in large part to oil, West Africa has become a leading destination for FDI. Three of the top seven FDI recipients are from the subregion, with Angola alone accounting for 21% of FDI to the continent, followed by Nigeria with 11%. With exploration and development © The Author(s) 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5_3

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ongoing in both the deep and ultra-deep blocks, Angola alone (in 2007) was projected to attract an estimated $4 billion in investments in the oil sector in the next 10 years (Kaldor et al. 2007, p. 107).

Oil Companies in West Africa Of all the external actors engaged in the West African oil industry, the multinational oil companies are among the most high profile and most influential. They are the face of the industry, with a wide range of assets, portfolios, and technological and financial assets, to prospect, drill and commercialize oil—a highly complicated but richly rewarding commercial enterprise. The precise number and identity of external actors in West Africa’s oil industry can be difficult to ascertain. That’s partly because oil companies are fluid rather than static institutions that calibrate their operations depending on a host of internal factors such as (restructuring, mergers, or bankruptcy) and external causes, including the price of oil (which can make or break a company) and the political situation in the producer country or region. Historically, oil companies have undergone major changes that have led to mergers, consolidations, and acquisitions, as a result of both market and nonmarket forces (Clarke 2008, p. 6). Famously, ExxonMobil is the result of a 1999 merger between two dominant energy companies. The company that started of as Vacuum Oil was incorporated in 1866 and adopted the name Mobil in 1960 after going through several reorganizations. Standard Oil (formed in 1882) first became Shell Transport and Trading Company (1897), then Shell D’Arcy, then Shell, and now Royal Dutch Shell. These rafts of management and sectoral restructuring have led to the proliferation of new companies in regions like West Africa (Palazuelos 2012, p. 303). The constant metamorphosis and spinoffs make it hard to gauge the precise number and identity of oil companies, and the extent of their influence. Furthermore, it is not just the nomenclature than changes when an oil company merges or restructures: the modus operandi of these companies is constantly evolving as well, in line with changing circumstances, sometimes beyond the control of the companies themselves. To survive and thrive, they have had to adapt to a rapidly changing environment influenced by multiple, sometimes contradictory market forces and the geopolitics of international relations. One consequence of this reinvention and adaptation is that in regions such as West Africa, international oil companies operate either directly or through separate legal entities

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called subsidiaries. For example, Assala Energy operates in Gabon via its subsidiary, Assala Gabon. The company manages both operated and nonoperated licenses as well as extensive production infrastructure, including an onshore pipeline network and an oil export terminal at Gamba. Royal Dutch Shell Plc carries out its operations in Nigeria through a consortium called Shell Companies of Nigeria (SciN), with Shell Nigeria its key subsidiary. In theory, these subsidiaries are separate legal entities with their own management structure and operations. In practice, however, they are the channels through which large corporations maintain their presence, take on new projects, or extend existing ones in a particular oil zone. When it comes to West Africa, evidence suggests no international oil company has ever exited completely. In spite of these challenges in estimating the exact number, we do know that enthusiasm for West Africa’s oil potential by foreign companies has always been high, going back to the turn of the twentieth century. History evidences the early interest in West Africa’s nascent oil industry. As early as 1912, (Steyn 2006) points out, no fewer than 592 oil-related companies were registered in Britain. A lucrative oil extraction environment attracts companies from all over the world at every stage of the process. The general aim of the participating companies is to discover oil reserves that can be brought to commerciality; even as the prospect of oil attracts companies of various sorts: “The promise of vast returns on investments captured the imagination of British investors and attracted substantial British investment abroad which amounted to over £14.3 million by 1907, increasing to over £40 million by 1913” (Clarke 2008, p. 6). The interest and passion for investing in the region’s oil industry was there from the outset. Since the Shell monopoly days, the oil industry in West Africa has undergone some rapid changes in the outlook and character of its external actors. The region now hosts a combination of large private companies (supermajors and their subsidiaries), independents, state-owned concerns, and small outfits. All of the so-called Seven Sisters (Exxon, Mobil, Gulf, Texaco, Chevron, British Petroleum, and Royal Dutch Shell) have operational presence in West Africa. They are engaged in both the upstream (prospecting, exploration, development, production, and chemicals) and the downstream operations (refining, marketing, and transportation) (Clarke 2008, p. 4). The positive investment climate has attracted global media attention both to the region and to the activities of multinational companies and

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other investors. A 2013 documentary titled Big Men, which aired at the Tribeca Film Festival in New York City encapsulated the discourse. The movie highlights the role of various external actors (oil firms, governments, and equity firms, and oil traders) in oil exploration and production in West Africa, though with specific reference to Ghana and its relationship with the Texas-based oil company Kosmos Energy. The 140-minute film reveals the intricacies of contemporary oil business, starting with a modern-day version of an oil “wildcatter” who won a prospecting contract from the Ghanaian National Petroleum Company (GNPC) but had no financial resources or technological know-how to actualize his dream of becoming a key player in the country’s quickly evolving industry. He decided to look overseas for funds to prospect for oil. After several tries and rejections, he was finally able to locate Isner, who turned out to be the CEO of Kosmos Energy, an upstart oil company, founded in 1983 and based in Texas. Big Men stands apart from other media files of the West Africa oil sector partly because it provides a behind-the-scenes look at high-stakes negotiations in the oil industry. Access to some of the biggest players in the industry makes it an interesting addition to our growing knowledge of how modern oil works. The documentary does fall into the stereotype of oil portrayals in Africa in particular, as events are largely seen through external actors lens with local actors in West Africa portrayed either as victims (with the exception of the oil “bunkerers”) or as angry youths agitating for their share of the oil wealth through force. But the movie is important for one main reason, with its exclusive access to some of the most powerful actors in the global petroleum industry. In one fell swoop, the film highlights the role of various external stakeholders: IOCs and equity backers, and foreign governments that are often the main driving forces behind the financing of the oil industry. It offers a rare behind-thescenes access into the modern-day oil industry: the stakeholders, their motivations, and their modus operandi. Big Men reinforces the media narrative that oil is the most globalized natural resource, in use everywhere and in high demand. It is therefore unsurprising that the West Africa region has attracted a plethora of external actors ranging from state-backed firms to oil service companies, utilities, traders, multilateral agencies, states, and diversified mineral firms based around the world (Palazuelos 2012, p. 249).

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External stakeholders’ involvement in the region’s petroleum industry is inevitable, in large part because commercial oil production requires significant capital investment, which is often out of reach for producer governments in the region. The traditional oil-producer states, such as Nigeria, Gabon, Equatorial Guinea, and Angola, lack the financial resources, technical know-how, and skilled personnel to prospect for, extract, refine, and market oil on their own. As already alluded to in earlier chapters, oil is one of the most complicated and expensive natural resources to drill, process, transport, and sell (Kaldor et al. 2007, p. 13). The capital-intensive nature has always been the case, going back even to the start of the industry. In 1948, the cost of drilling a wildcat oil well was a staggering one billion dollars (De Golyer 1965, p. 120). For the international operators (oil companies, banks, equity firms, states, and multilateral agencies of varied kinds) who finance, produce, and sell West Africa’s oil, the attractions of West African oil are obvious. More often than not, the profit margins are worth the inconvenience and risks. As a matter of fact, if anything, most oil companies continue to increase their presence by expanding existing projects and establishing new ones in places such as Ghana, Gabon, and Côte d’Ivoire. The key to understanding this mutual attraction between West Africa and its external business investors can be partly explained by the globalized nature of oil. Unearthing and mapping the major players (both international and domestic) and their modus operandi in a typical oil extraction environment is key to understanding the region’s expatriate business history. West Africa’s oil industry would not have emerged and developed in the time, space, and manner it did without the input (financial, technological, and organizational skills) of various external stakeholders. From its inception to date, these external agents have set policies that have often had major implications for the region and the continent as a whole. All of these actors and external stakeholders have undertaken different, though sometimes contradictory, roles in shaping the industry to its current form. Most of the socioeconomic, political, commercial, and trade relations and policies that are now in place were initiated during European domination of sub-Saharan Africa. West Africa’s initial attraction for the colonial powers was partly due to its natural riches. The region was endowed with resources of all kinds: renewable, nonrenewable, metallic and nonmetallic. It was these raw materials (land, natural harbors, freshwater, spices, fruits, vegetables, etc.) that first caught the attention of the Portuguese mariners who—on their way to the Spice Islands in India—docked on the coast

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in the fifteenth century to rest and replenish. For centuries both before and after colonization, the region’s bountiful agricultural yields and fishing industry (worth an estimated 2.5 billion dollars; World Bank 2013). became major revenue earners that helped sustain its local economies and provide a source of livelihood for citizens. The fate of West Africa is intertwined with its history and its natural resources. While a lot is known of Africa’s political history leading to the division of the continent following the Berlin Congress of 1889, not much is known about the economic partition of the continent in which expatriate firms divided the continent among themselves. West Africa’s business history is incomplete without its colonial chapter (Phimister 1995).

Colonial Politics and Commercial Oil in West Africa Oil’s commercial discovery in West Africa occurred at the time when the African continent was largely under colonial rule. This was to have a lasting impact on the growth and evolution of the extractive industry in general. Beginning in the 1870s, large swaths of the continent came under the control of several European powers, chiefly Great Britain and France, the two most influential powers in West Africa. This “scramble for Africa,” as the era that led to the partition of the continent came to be known, saw the English and French competing fiercely for territory, global influence, and of course natural resources, in which West Africa was endowed. Together with their allies in the United States, Canada, Australia, and others, the Anglo-French colonial administrations set the policies and programmatic agenda that were to have a lasting impact on the oil industry. From the outset, the colonial governments adopted a policy of preferential treatment for oil companies and nationals from their home countries or allied countries. This meant, for example, that the Colonial Office of Britain preferred British or allied companies drilling for oil in their spheres of influence, with the French government adopting the same policy but favoring French companies such as Total. As a consequence, most of the region’s international trade, from precolonial times to independence in the 1960s, came to be controlled by foreign companies, mainly French and British and their western allies. Countries with the technological know-how to drill for oil and on good terms with the two

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main European powers in the region had an advantage from the beginning. That policy became the modus operandi for the extractive industry across the region. In Ghana, the gold mines were owned and operated almost exclusively by the Europeans, largely British companies (Twomey 2001, p. 92). In Francophone Africa, on the other hand, the French government had formed “special relationships” with its colonies, through Total and Elf, in which it had stakes. The two multilateral companies’ oil interests in countries like Gabon and Côte d’Ivoire were, and are still, protected to a large extent by the French government, which used its influence to extract favorable concession terms from the producer governments (Maurer, p. 5). The First World War brought oil into prominence and made it an international commodity. The “black gold,” as it was referred to at the time because of its economic and symbolic significance, perhaps more than anything else played a decisive role in the allied power’s victory over Nazi Germany, when the navies of the great powers such as Great Britain and the United States made the dramatic switch from coal to gas. From this point forward, oil came to be viewed by governments as a crucial accessory to national security. From its large-scale introduction in World War I, oil quickly became the dominant fuel of the twentieth century. As the significance of oil to the global economy grew worldwide—for aviation, transportation, and household use—and rapid industrialization ensued, demand quickly outstripped supply. This led to a frantic search for oil in other parts of the world. The scramble for new sources of oil saw attention turned to sub-Saharan Africa. As a result of anxiety of Britain’s reliance on foreign oil for most of the Second World War period, the British government encouraged the exploration of the oil possibilities in British West Africa, especially in Nigeria, mainly through British companies or firms from friendly countries such as Canada and the United States. With global powers preoccupied with prosecuting the war or in the postwar rebuilding of Europe, private investors, entrepreneurial individuals, and various-sized oil companies became the main catalysts driving the industry’s nascent growth, especially in the period following the end of the First World War. Largely due to the preferential treatment the British colonial administration gave to their home companies, it was not surprising that the earliest multinational corporations to emerge and control the region’s oil sector in those early days were from the British oil industry (Steyn 2006, p. 251). British Petroleum and Royal Dutch Shell are just two examples of such companies.

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In these early stages of the oil industry in West Africa, private oil ventures were the norm. The companies and investors set out to discover the proverbial “Spindletop” in Africa. Often referred to in the oil industry as “wildcatters,” these founder-entrepreneurs were engaged in what Hopkins (1976, p. 267) described as “amateur efforts” driven largely by “individual enthusiasm and initiative.” The pioneers in the region’s oil industry, came in the form of private prospectors (usually larger than life characters) and small startup companies. Perhaps because of their lack of technical training in related fields such as geology, these pioneers were viewed by governments and the established business community with a high degree of skepticism. Partly as a result of this, little attention has been paid to the economic and business activities of these private investors in the early phase of the oil business in West Africa (Steyn 2006, p. 14). Despite being overlooked and sometimes mocked, their perseverance, and in some cases ingenuity, paved the way for the eventual oil wealth for which West Africa is becoming known around the world. One such pioneer was the British engineer and businessman John Simon Bergheim, founder of the Nigerian Bitumen, one of the earliest international oil companies in sub-Saharan Africa. He was also one of the most influential oil entrepreneurs in this period, who founded the corporation in 1903 as a private enterprise with the explicit aim of prospecting for and drilling for oil in present-day Nigeria. He was somehow able to convince both the colonial government in Nigeria and the Colonial Office in London not only to grant his company monopoly to drill for oil in Nigeria but also to loan him money to do so. With political backing and financial support, Bergheim succeeded in buying up all drilling sites in the country. By 1912 he had sunk up to 15 wells in southern Nigeria at the cost of 143,000 British pounds. He was not to enjoy his fame and fortune, however. In September of that year he died in a tragic road accident, and with that went one of the most aggressive oil exploration programs in sub-Saharan Africa. Not long after his passing, the Nigerian Bitumen Corporation went bankrupt and eventually out of business (Obasi 2003). Successive oil companies emulated the Nigerian Bitumen model of sourcing support from their home governments both for financial support and for protection from hostile enemies, both local and international competitors. The West Indian Petroleum Company in 1903 requested a government loan of 10,000 pounds from the British government. In return for the financial assistance, some of the oil companies offered the government the right of preemption, which ensured first priority over

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any oil finds. In that regard, it was a win-win proposition. Though the government was reluctant at first to get involved in the search for oil, it eventually acquiesced at the beginning of the First World War when the British government became a majority stakeholder in the Anglo-Persian Oil Company (later renamed the British Petroleum Company), with 51% of the shares (Steyn 2006, pp. 252–53). Another one of the first of such “vanguard” companies was the D’Arcy Corporation, which gained concession rights (to drill for oil) from the Crown Agent and the colonial authorities in Nigeria. The company was named after its founder, William Knox D’Arcy (October 11, 1849–May 1, 1917), one of the principal initiators of the oil and petrochemical industry in what is now Iran. D’arcy first became enormously wealthy in the gold industry in Australia, where he relocated after his father’s law firm in England went bankrupt. But his real fortune, the one that established him as a true millionaire, was in the Persian oil industry in Persia. In 1900, upon the invitation of the former British ambassador to Iran, he obtained a 60-year concession for oil prospecting and drilling in Iran. In April 1909, after several failed attempts, his newly formed company, the Anglo-Persian Oil Company (APOC), which would later become British Petroleum (BP), struck commercial oil in Iran (stanmoretouristboard.org, n.d.). With the experience, clout, enormous wealth, and—perhaps most importantly—powerful connections its founder gained in Persia, the D’Arcy Corporation was in a strong position to influence the oil industry globally, especially in the British Empire. It set to work by entering Nigeria’s nascent oil industry with similar tactics: personal and professional networking, buying up smaller competitors, and partnering with the government. In January 1918 the Crown Government and the Nigerian colonial government granted oil concessions to the D’Arcy Oil Corporation, a subsidiary of the Anglo-Persian Oil Company. With that monopoly and official government backing coupled with millions of pounds worth of investment, the D’Arcy Corporation, later D’Arcy Shell, soon discovered commercial oil in Nigeria in 1956, at Oloibiri in present-day Bayelsa State (Steyn 2006, p. 250). The company focused its attention on the eastern region, where it produced an estimated 83% of its oil. Thus began the spectacular journey of one of the largest and most prominent oil companies in the world.

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The efforts of these early pioneer oil men and companies were met with limited success. Driven by the possibility of quick profits and vast returns but lacking the infrastructure to engage in the sustained production of oil, these pioneer companies tended to form a special relationship with their home governments as a way to enhance their profitability and survivability. Though the early oil companies like Nigerian Bitumen and others from the United States were largely speculative ventures, they nevertheless went on to play a pivotal role in discovering and opening up the West African oil industry to the rest of the world in the twentieth century (Steyn 2006, p. 251). Large state-chartered (or at least state-associated) mercantile firms, as well as independent companies, became more prominent during this era (Hopkins 1976, p. 42). The remarkable discoveries of commercial oil in 1956 in Nigeria by the company now known as Shell encouraged other oil companies to invest in the subregion.

Independence and Diversification of the Nascent Oil Industry With the exception of Ghana (1957) and Guinea (1958), most of West Africa gained independence in the 1960s. Guinea Bissau in 1973 and the Seychelles in 1976 were among the last to decolonize in the region. Unlike other parts of Africa such as East Africa where independence was achieved through violence, the decolonization process in West Africa was largely peaceful. Partly because of the relatively smooth transition, with independence, the commercial ties between the newly independent states and the colonial powers were largely retained. With independence and the introduction of more attractive fiscal terms to incentivize investors, the newly independent African governments set out to accelerate diversification and participation of foreign oil companies. In the ensuing restructuring, Shell (which had sole concession rights for the whole country up to that point) was forced to relinquish 50% of its oil concessions in the Niger Delta. Exploration rights were granted to other foreign companies. Mobil and Tenneco leaped at the opportunity to prospect and drill for oil in Nigeria’s Niger Delta. Between 1959 and 1961, Mobil (then known as Socony Mobil Oil Company) had drilled four wells in Dahomey Basin without much success (Obasi 2003). Diversification, in turn, led to the noticeable entrance of the “supermajors” in West Africa. These are the energy giants and the state-owned entities that dominated oil production in most countries and regions of the

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world. Some of the earliest companies in the region include Royal Dutch Shell, Pittsburgh-based Gulf Oil, Société Africaine des Pétroles (SAFRAP) from France, Azienda Generale Italiana Petroli (AGIP) of Italy, Phillips Petroleum Company (Oklahoma), Amoseas, and Mobil (Klieman 2012). Others such as Tenneco, Texaco, Gulf (later Chevron), Safrap (now Elf), Agip, Philip Esso, Japan Petroleum, Occidental, Deminex, Union Oil, PetroChina all joined the oil economy of West Africa. Together they became the principal drivers of the industry, producing on average 4.3 million barrels per day (bpd), or 88% of the total oil in the region. Their entitlement (net oil) was 2.7 million bpd or roughly 55% (Barkindo and Sandrea 2007). The supermajors have the largest financial commitments on the continent, heavily focused on the more technologically challenging but highly profitable deepwater and ultra-deep waters of the Gulf of Guinea. International operators Shell, Chevron Total, ExxonMobil, and ConocoPhillips produce most of the oil in West Africa. All of them have operated in the region, albeit under different names, since the early days of exploration. Their financial investment has helped to keep the industry buoyant in both boom and bust times. Since 2009, both ExxonMobil and ChevronTexaco, two of the largest transnational corporations in the world, have spent about $10 billion annually toward the region’s oil exploration (de Oliveira 2007; Roberts 2006; Kanyako 2015). Because of their size and enormous wealth and global reach, these companies came to wield enormous influence over the resources, markets, and politics of not just the producer governments in West Africa but also the global economy writ large. According to the Forbes list of most profitable companies for 2018, ExxonMobil made $16.4 billion in profits that year alone. In comparison, Walmart which, was ranked third on the prestigious list, grossed a respectable $7.4 billion. PetroChina—China’s premier oil company— made a profit of $5.7 billion (Forbes 2018). Thanks in large part to these companies, oil production by the Gulf of Guinea countries (Nigeria, Congo, Gabon, Cameroon, Equatorial Guinea, and Angola) is over five million barrels per day, more than that of Iran, Saudi Arabia, or Venezuela (US EIA 2010). The companies are attracted by the huge profit margins they could accrue from the sale of West African oil. Angola, which drills for most of its oil from its ultra-deep waters, has been particularly successful in attracting key international oil exploration and production companies from around the globe with multibillion-dollar contracts. British, Chinese, and

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US companies such as Chevron and ExxonMobil together account for one-third of national production. The French company Total has 41% of the country’s market share, producing about 800 bpd, with 26% market share, Chevron produces some 510 bpd. ExxonMobil has 19% market share (375 bpd), and BP’s 13% market share equates to 252 bpd. The French oil company Total owns the Kaombo project valued at $16 billion, expected to peak at 230,000 bpd. British Petroleum, on the other hand, owns the oil projects referred to as “Pluton, Saturn, Venus, and Mars” (PSVM) in Block 31, valued at $14 billion (“Angola—Oil and Gas,” n.d.). As alluded to already and as will be discussed later, it is not just the countries with the most oil that attract international companies. Even moderate producers attract a slew of international interest. Other international players of note, with smaller operations across the region, include the Rome-based oil and gas company Ente Nazionale Idrocarburi ENI (National Hydrocarbons Authority) and the Norwegian company Equinor, whose management interest is overseen by the Norwegian Ministry of Petroleum and Energy. Vaalco, ConocoPhillips, and the Texas-based Vaalco Energy have also had fleeting involvements with the region. Côte d’Ivoire, a marginal producer at best, has pulled in smalland medium-sized companies from the United States, UK, France, the Netherlands, and of course China to its nascent oil industry. In addition to its leading players Tullow Oil and Canadian Natural Resources Limited, it also has Azonto Oil, which holds a controlling share in block C212, Vanco Energy and Co., and Sinopec Overseas Oil and Gas Ltd. of China (Obeng-Odoom 2016, p. 104)

The Medium, Africa-Specialist Companies The West African oil market is unique in that its petroleum industry is not completely dominated by a handful of international oil companies or a small number of state-owned companies. The region also has a sizeable proportion of startups, small, mid-sized privately owned companies, some of them Africa-specialist companies with a strong presence in the region. Since the 1990s a slew of independents and superindependents have entered the West African market in greater numbers. Many of these are not only heavily invested in the oil powerhouse markets of Nigeria and Angola but have managed to establish strong footholds across the region (Clarke 2008, pp. 89, 394). While some of these national oil companies are affiliated with OPEC, the vast majority are not. The Oil and Gas

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Journal (2007) estimates such companies amount to over 70 companies. These are the companies that specialize in the business of drilling for oil in the sometimes-unpredictable and unforgiven business terrain of West Africa. Together they produce more than 45% of West Africa’s oil. Two of the most important of these are Kosmos Energy and Tullow Oil: both transnational oil companies have a strong presence in many parts of West Africa. The growing role of Wall Street firms is increasingly noticeable especially in sustaining these small and medium startups. Kosmos Energy is best known for its spectacular discovery of oil in Ghana in 2007. The Dallas-based startup company featured prominently in the Big Men documentary referenced earlier. The company is backed by the Wall Street trading firm, Warburb Pincus. In a short amount of time the hitherto unknown companies have become two of the leading oil investors in West Africa. Tullow Oil, the Texas-based company is actively present in Côte d’Ivoire, Equatorial Guinea, Gabon, and Ghana. It has maintained a robust presence in Côte d’Ivoire since 1997, where it currently holds a 22.3% share in offshore production interests in the Espoir Field, which sits on the edge of the African continental shelf some 19 km from shore. The company also holds substantial exploration acreage both onshore and offshore. It shares operational interest with the Côte d’Ivoire national petroleum company, Petroci. In Equatorial Guinea, Tullow, according to the group’s website and annual report, has development and production interests in two Hess-operated licenses offshore, encompassing the Ceiba field and the Okume Complex. The Ceiba field has been producing since 2000 and Tullow gained its interest in the field through the acquisition in 2004 of Energy Africa. The Okume Complex development commenced in 2004 and according to company reports came onstream at the end of 2006 (Tullow 2019). Tullow’s two biggest investments, however, are in Gabon and Ghana, where it engages in exploration, development, and production. In Gabon, it operates a portfolio of more than 20 onshore and offshore fields, some in partnership with other companies including Kosmos and GE Petrol, the national oil company of Equatorial Guinea. In Ghana, since 2007 the company has been engaged in upstream oil activities, where it has drilled two successful operations following seismic acquisition and interpretation, In October 2008, the company was appointed the Jubilee field operator and set about working with the partners and the government

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of Ghana on developing the field to bring Ghana its first major oil production. The Minister of Energy in Ghana formally approved the Jubilee Phase 1 Development Plan and Unitisation Agreement on behalf of the national government in July 2009. In November 2010, following a successful development program that included the building of a Floating Production Offtake Vessel (FPSO), the first oil was achieved from the Jubilee field. This was some 40 months post the initial discovery well, which represents the fastest-ever comprehensive full-scale deepwater development (Tullow 2019). It is not just the global companies that have created an impact. Another interesting trend in West Africa is that new actors from around the subregion, including national oil companies and independents, have also started gaining access to the region’s oil markets. African companies also have a demonstrably visible presence in the upstream and downstream phase of oil production in West Africa, especially in the traditional oilproducing countries of Angola and Nigeria. Some of these companies, such as Niger Petroleum and Niger Oil Resources, are wholly local and have been around since the 1960s when civil war led to the cessation of operations by some of the foreign companies. As the instability increased, more companies scaled back on their activities in the country. The vacuum was filled by small, local, private Nigerian companies. According to the IMF and the International Energy Agency (IEA), local Nigerian entrepreneurs now control 18.9% of oil production. One of the most prominent of these African companies is the Angolan state-owned company Sonangol, which operates through its subsidiary Sonangol E&P. The company has a strong presence in the country and occasionally flexes its negotiation muscles when dealing with much larger companies. It showed its ruthless streak in its negotiations with the US company Cobalt International Energy in 2015. Major discoveries and assets in Blocks 20 and 21 were bought by Sonangol at the steep price of $500 million, after initial valuation had put it at $1.8 billion. In December 2017, the company filed for Chapter 11 bankruptcy due in part to a US corruption problem and legal woes in Angola. Sonangol immediately turned around and made the two blocks available for investment (Burgis 2016).

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Contractors and Equity Firms Big or small, oil companies are supported by a cast of financiers, operators or contractors who carry out an immeasurable number of specialized logistical and analytical tasks ranging from transportation, insurance, and risk assessments to the construction and management of oil platforms, rigs, and refineries, to security, geological surveys, and data analysis. Other contractors and equity firms that provide a range of services in both the upstream and downstream phase of the industry—such as the construction and management of oil refineries, security, oil drill platforms, geospatial data gathering and analysis, and contract negotiations— are all noticeably present in West Africa. Major US contractors including Halliburton, the GE company Baker Hughes, FMC Technologies, Oceaneering, Weatherford, and Schlumberger are at the forefront of the global engagement in the region. These entities explore and develop oil fields, transport, and store petroleum products, construct refineries, and work on associated infrastructure. Japanese company MODEC, one of the world’s leading suppliers of floating platforms, supplied an accommodation vessel to support the hookup operations on BP’s PSVM project (“Angola—Oil and Gas,” n.d.). Financiers from all over the world are perhaps the most important of these global agencies in the region’s oil industry. Because the energy in West Africa is capital deficient, foreign investment is sorely needed to build and manage its energy industry (Clarke 2008, p. 387). For the past three decades through these funding agencies, the world’s leading IOCs have invested more than $20 billion in upstream and downstream activities, mainly in the Gulf of Guinea (Ghazvinian 2007) but also to a smaller but growing extent in the Senegal Basin. Huge financial investments have come from some of the world’s largest international oil companies, traders, and equity firms. In some cases these equity firms, often little known as they tend to operate largely behind the scenes, are just as powerful and influential, as the oil companies they fund. An equity firm known as Blackstone Group was the real power behind the spectacular discovery of oil in Ghana by Kosmos Energy. The Group is one of the two largest private equity firms in the world, with $174 billion in assets. How Wall Street got involved in West Africa’s oil business is itself an intriguing story that developed well outside of the region. The 2008 financial crisis was a major turning point that attracted more private equity firms into the oil (and gas) business. The crisis forced banks to

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introduce tighter regulations and more stringent measures in screening applicants to prevent another crisis and in a bid to boost profit margins. As these traditional lenders became more risk-averse, they suddenly saw small- and medium-sized companies like the ones dominating the West African landscape as liabilities. With large capital suddenly in short supply, the companies were forced to look for alternative sources of financing for their capital-intensive oil projects. They turned to little-known groups such as BlackRock, Schroders, Henderson, and Fidelity (Fiorucci 2017). These equity firms were able to lend money to upstart oil companies with less stringent conditions and more favorable terms than traditional banks did. For investment firms looking to diversify their portfolio and mitigate market volatility, the attraction to these companies and the industry was in general fairly mutual. In 2017 the Blackstone Group went public when it traded on the New York Stock Exchange. Going public conferred a certain brand status, particularly overseas, on the then-32-yearold, New York City-based company. The world’s biggest listed private equity firm has its eyes set on West Africa. Through its Blackstone Oil and Gas, founded in 2007, the company invests in so-called “distressed” oil and gas companies with upside potential. It helps them restructure by providing loans, expertise, and in some cases through outright purchase. Blackstone’s credit arm GSO Capital Partners raised $4.5 billion for one of the largest energy-focused credit funds ever in 2019 (Logan 2019). Such financial muscle has proven to be pivotal in the 2007 discovery of the Jubilee Oil Field in West Africa when they backed the upstart oil company Kosmos Energy. One of the most notable private equity acquisitions in West Africa in the last two decades is a firm called Carlyle. The oil world was stunned when in March 2017 Assala Energy, a little-known oil company, acquired Shell’s onshore assets in Gabon for a total of $628 million, including an amount equivalent to interest. What is interesting to note is that Assala Energy were not only funded but actually created by the UK-based Carlyle. Capital for this investment came from two Carlyle funds: (a) Carlyle International Energy Partners (CIEP), a $2.5 billion fund that invests in global oil and gas exploration and production both mid- and downstream, oil field services, and refining and marketing in Europe, Africa, Latin America, and Asia, and (b) Carlyle Sub-Saharan Africa Fund (SSA), a $698 million fund that invests in buyout and growth opportunities across Africa (The Carlyle Group 2017).

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In the movie Big Men, referenced earlier, viewers are given rare access to the CEOs and board members of an equity firm called Warburg Pincus. This obscure group, with a net worth of $62 billion demonstrates the growing influence of equity firms in far-flung places such as West Africa. Their funding largesse has enabled various startup companies to continue to prospect and drill for oil in the region. Their rather shadowy nature has also attracted critics and watchdog institutions interested in fostering transparency in the industry. The concern is often premised on the fact that these equity firms have strong connections to some of the most powerful governments in the world and are thus likely to influence policies that favors profit-seeking firms to the detriment of locals and the environment. This theme will be explored a bit later in subsequent chapters.

Role of States Oil’s importance to-and strategic role in the global economy with respect to the well-being of states, cannot be overemphasized. Crude oil is a source of political power and thus the business of governments around the world. It is a strategically critical resource to the smooth functioning of the global economy, worth an estimated $4 billion per day (United Nations 2008; Addison and Roe 2018). No fewer than 50 countries produce oil in commercial quantity. Because of its critical nature to a nation’s economy, security and social development, oil is the only commodity whose policies are often directly managed by the executive arm of vast majority of governments around the world. One of the leading governmental stakeholders in West Africa’s oil industry is the United States, the world’s largest oil consumer. West Africa is critical to US energy oil needs. The US Department of Energy’s 2010 International Energy Outlook report referred to West Africa as the “new frontier for the petroleum industry” (p. 28). The United States’ reliance on West African oil has increased steadily over the last decade, from 15% in 2002 to around 25% (Ghazvinian 2007, p. 45; Black 2011; Raphael and Stokes 2011). In 2005 the United States imported more crude from West Africa than it did from Saudi Arabia and Kuwait combined. It was no coincidence when in 2003 Colin Powell visited Gabon, the first visit for an acting US Secretary of State. The terrorist attacks on the Twin Towers in New York City and the Pentagon in Washington, DC, on September 11, 2001, had a direct effect on West Africa’s strategic importance

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for the United States. This historic event forced the world’s leading consumer of petroleum products to expedite the exploration of alternative sources of energy, thereby reducing its dependency on any one region. To this end, a series of agencies and policy guidelines have been developed to source West Africa’s oil and to reduce dependency on Middle Eastern oil. The National Energy Policy Development Group was commissioned by President George W. Bush in 2001 with the express aim of designing a detailed plan to deal with America’s growing dependence on foreign sources of energy. Vice President Dick Cheney was selected to lead the group, which produced a detailed report called the National Energy Policy. The report acknowledged the strategic importance of the region, both in terms of the high quality of oil and its geography, to the world’s largest economy and encouraged the government to prioritize the region as a critical source of energy (McDougal 2007). The strategy of other consumers, such as the European Union, is not much different from that of the United States. For its part, the European Union still imports its largest amount of crude oil from Russia, about 30.3% in 2017. With the EU worried about dependency on one region for its energy needs, it has set out to diversify the sources of its crude oil imports by turning to places like West Africa. It imported 22% of its oil from the Gulf of Guinea in 2000 (García-Rodríguez et al. 2013, p. 375). Nigeria and Angola provided 7.4% of the union’s energy needs in 2017 (Eurostat 2018). As Brussels recalibrates its engagement with the African continent, West Africa will become increasingly important for its overall energy needs. The EU’s commercial and political engagement with the continent is mainly through a web of Economic Partnership Agreements (EPAs), which Brussels has negotiated with 40 sub-Saharan African countries. The EPAs provide European companies with preferential access to markets across the region and will liberalize about 80% of imports over 20 years (Schneiderman and Weigert 2018). China (the world’s second-largest oil consumer and the world’s largest net importer of petroleum products) has signed a series of trade deals and bilateral agreements with governments in the region. For more than four decades China has shown a particularly keen interest in sub-Saharan Africa. While political considerations including warding African countries off Taiwan played a part, the region’s natural resources are the major draw. Ninety percent of its African imports consist of natural resources such as iron ore, cotton, diamonds, timber, and copper. Oil alone constitutes 66% of all African exports to China, which makes it by far the largest (USGS 2006, p. 28). In 2012 China met about 24% of its petroleum needs (62.6 million tons) from Africa, which is more than that of the

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United States at (59.7 million tons), but they remain far behind Europe’s (143.8 million tons) (Thrall 2015, p. 31). Not surprisingly it has concentrated its largest investment and diplomatic efforts in Angola, which provides more than half of its oil. In 2004. That same year a crude oil deal was signed between PetroChina and the Nigerian National Petroleum Corporation to supply 30,000 barrels of crude oil per day to China. Two years later, in 2006, CNOOC agreed to pay $2.3 billion for a stake in a Nigerian oil and gas field. In the Ivory Coast, Sinopec bought a 27% stake in block 49, an oil field off the coast (Taylor 2006, p. 944). Chinese oil diplomacy in Africa has two main goals: in the short term, to secure oil supplies to help feed growing domestic demand back in China and, in the long term, to position China as a global player in the international oil market (Taylor 2006). In some ways, therefore, its needs are not dissimilar to other major powers: its rapid industrialization hinges on energy. It desperately needs energy security, especially after making the switch from being a major oil exporter in the 1970s and 1980s, after its oil fields matured or declined, to being a net importer of oil in 1993. In 2007 China imported more than half of its consumption, with its crude oil net imports projected to continue to rise sharply (Crane 2009). A decade later, the country now imports more than eighty percent of its crude oil a day amounting to a record 461.9 million tons, or 9.24 million barrels of oil per day. In 2018, China had record oil and gas imports and remains the number-one crude oil importer in the world after surpassing the United States in 2017 (US Department of Commerce 2019). Chinese business presence in West Africa is maintained through a series of state-owned enterprises, which extracts resources, sometimes in exchange for large infrastructural projects, including roads, stadiums, airports, and dams. A growing presence is large-to-medium private institutions sometimes focused solely on the business side of diplomacy, unlike the SOEs, which are to all intents and purposes business arms of the Chinese government. The third group are usually small scale private merchants resident on the continent, doing a wide range of activities. In terms of value and visibility, the SOEs have been the most impactful. The Chinese government has sought to secure foreign supplies of oil through its national oil companies (NOCs): China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC), and China Petroleum and Chemical Corporation (Sinopec). China Railway and China Construction are among the foremost of these companies.

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China offers West Africa’s governments a very attractive alternative to dealing with Western (particularly European and North American) governments and companies. For producer governments in the region, China’s appeal lies in its more straightforward business approach. It asks very few questions and imposes minimal conditions, unlike the multitude of governance stipulations (including good governance and human rights) often imposed by its Western counterparts. Whereas China’s needs are similar to that of other major powers, in terms of energy security, its approach is radically different from other external actors. For example, the key difference between China and the United States, the world’s two largest consumers, which de Oliveira (2007) rightly points out, is that China prefers oil-for-infrastructure deals as opposed to cash payments for oil—the preferred mode of operation for Western oil companies. This is the model that is in use in Angola and other parts of the continent, where they are building critical infrastructure including roads, bridges, and hospitals. Under the Chinese model, production and management of oil are carried out by government-run oil companies as opposed to private companies in the West, as well. Companies such as BP or Chevron are answerable to their shareholders, not to China’s Ministry of Natural Resources. The other key difference is that compared to other major, particularly Western powers, China is a latecomer to international oil-importing, having been an oil exporter until 1993. As such it has a lot of catching up to do. Because of this relatively late start, its firms lack the experience, relationships, and market penetration of international oil firms. But what it lacks in experience and expertise it more than makes up for in desire and creative thinking. Instead of competing with the more established oil giants such as Shell or BP, China’s business model is infrastructurecentric. The China–West Africa partnership is in many ways mutual, and a major game-changer, if the partnership could be sustained. China’s investment has helped revitalize Africa’s crumbling infrastructure. Throughout the continent, Chinese companies are building hospitals, dams, government offices, and stadiums and refurbishing facilities wrecked by corruption or armed conflict. Additionally, from the West African governments’ perspective, China’s demand for energy resources has inflated prices, bringing a windfall to African states’ coffers. Partly as a result of China’s interest in African oil, the continent’s growth rate increased to 4.5% in 2004. Fifteen years later, the continent’s economy hovers around

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2.8%, a downturn the World Bank (2019) attributes to macroeconomic instability and inflation. But China’s growing robust investment presence and increased activity in the region also raises some serious concerns, especially with regard to the linkages between state abuse and human security. The controversy involves critical issues such as human rights, environmental protection, democracy, rule of law and community interests, which are often less of a priority for China whose straight-swap model is a barter system of sorts. Officially they don’t comment on or criticize government officials that engage in graft or human rights abuses. In countries like Angola, Equatorial Guinea, Nigeria, and Gabon, where corruption in the oil industry is rife, China has so far resisted Western pressure to reduce its support for regimes considered corrupt (Mossman 2017). Beijing’s official stance is that it does not interfere in the internal affairs of states. In other words, what African leaders do with their oil revenue is entirely up to them. Human rights activists and community advocates are worried about the impact of the sudden influx of oil receipts on good governance, so China’s challenge is to find the happy medium to ensure that its increased engagement with Africa benefits the ordinary people and promotes sustainable developments beyond infrastructure.

Multilateral Organizations: Strategies and Impact The fourth set of external stakeholders that are important for understanding the operations of the oil industry in West Africa are the multilateral interstate institutions. The policies of the United Nations, the World Bank, the European Union, the African Union, and the regional body the Economic Community of West African States are critical to the region’s crude oil regime. These various interstate institutions serve several functions that help to regulate the extractive industry. One critical function performed by multilateral agencies is funding. The World Bank provides funding to various governmental and nongovernmental agencies to strengthen institutions, laws, and regulations to promote good governance and prudent management of various country’s oil sector. One of the biggest of such projects in the subregion is the hugely controversial Chad-Cameroon pipeline. Since 2000, the Washington, DC-based financial behemoth with a $280 billion lending portfolio has funded the construction of a 1070 km long pipeline, worth an estimated $3.7 billion, designed to transport oil from Chad to connect

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with oil depots in Kribi on the Atlantic coast in Cameroon. Under the Chad-Cameroon pipeline project, 300 oil wells are being drilled. The maximum production from these wells is estimated at 225,000 barrels a day (Harshe 2003, p. 115). This project was in many ways a unique social engineering experiment designed to bring transparency and accountability to one of the most protracted and opaque industries in the world. The project brought together some of the most powerful stakeholders in the oil business: governments and a global consortium of international oil companies including some of the biggest names in the hydrocarbon business: ExxonMobil, Chevron, and the little-known but powerful and highly experienced Petronas, from Malaysia. The loans were provided directly to the Chadian and Cameroonian governments and the IOC consortium (Elliot 2019). As the principal funder, the World Bank gave itself an oversized role in an industry in which the oil companies and individual governments, and not necessarily a multinational financial institution, often has the largest say. States involvement in the region’s oil industry is also done through multilateral agencies. The Economic Community of West African States (ECOWAS) is a major stakeholder in the region’s oil industry. By sheer volume, fuel represents the largest export commodity in the ECOWAS zone. At 75%, crude oil—mainly from Ghana, Nigeria, and to some extent Côte d’Ivoire—is the dominant export from the regional trade block. If one includes the output of Angola, Gabon, Equatorial Guinea, which are not members of the politico-economic community, then the critical importance of crude oil becomes even starker. Through its Industry and Private Sector Promotion unit, the economic community has made energy needs and security a priority for the ECOWAS region. Its focus is not just on the extraction of the resource but also on working with governments and civil society to minimize the negative impact of the resource on communities. State institutions also provide monitoring and evaluation roles, including compensation for victims. Their involvement in minimizing the impact of oil extraction is partly justified by the role played by Royal Dutch Shell in Ogoni Land in Nigeria. The company was accused of financing the military dictatorships in Nigeria that hung nine men who were part of a sustained civic protest against the company. At a trial held in New York City in 2009, the oil giant Shell agreed to pay $15.5 million in settlement to the descendants of the nine men killed (Pilkington 2009).

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Whether individually or collectively, states also create the regulatory framework within which international oil companies operate. The US Dodd-Frank Act has perhaps been the most impactful government policy on resource extractors, especially those working overseas in places such as West Africa. The act requires oil and gas companies to disclose in their annual reports to the Securities and Exchange Commission any payments made to the US federal government, foreign governments, or companies owned by foreign governments for the purpose of commercial development of oil, natural gas, or minerals. Such payments include taxes, royalties, fees (including license fees), production entitlements, bonuses, and other payments the SEC may recognize as “part of the commonly recognized revenue stream for the commercial development of oil, natural gas, or minerals” (US Congress 2009). Legal policy documents such as the Dodd-Frank Act have practical and long-lasting implications for American and their global competitors operating in far-flung regions such as West Africa. The biggest complaint that the international oil companies have had against the act is that the stringent financial reporting requirements disadvantage them against other companies from countries like China. The ideological and economic war that has circumscribed relations between the United States and China plays out very intensely in West Africa.

Conclusion West Africa’s oil has attracted a plethora of interest from various international stakeholders from all over the world. External actors of various kinds from oil companies to contractors to international agencies, various external agents have a visible presence in both the upstream and downstream ventures of West Africa. The external players in West Africa are a mixture of states as well as old and new investors from the traditional Western nations (United States, UK, Australia, Canada, France) and from the Gulf states and Asia—notably India, Malaysia, South Korea, and China. The active presence of these external companies and actors is to be expected. While West Africa has the natural resources, it lacks the technological, skilled personnel, and financial means to harness them in a way that would benefit its economies. This is in sharp contrast to the Middle East, where its national oil companies have 100% ownership in the exploitation of their oil wealth. West African countries in contrast have had no choice but to accept the dominant presence of foreign companies

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that have the technology and market experience in extracting and marketing the energy that fuels the global economy. They have vast wealth that no government in the region could rival. ExxonMobil alone is worth 50 billion dollars, more than the combined wealth of all West African countries. This skewed power arrangement means that West African countries often operate at a disadvantage. But even with this constraint, in terms of capacity and financial means, West African countries do not lack agency. Mainly through the national oil companies, they are slowly exerting themselves in their business dealings with their highly influential international partners. In Ghana, Angola, Nigeria, Gabon, and Equatorial Guinea, governments are increasing their control over how external actors shape the industry. The agency of producer governments forms the basis of the next chapter.

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Mossman, Matt. 2017. How Nigeria’s Oil Industry Went Local: The Unintended Benefits of Graft. https://www.foreignaffairs.com/articles/nigeria/2017-1129/how-nigerias-oil-industry-went-local. Accessed May 30, 2019. Obasi, N.K. 2003. Foreign Participation in the Nigerian Oil and Gas Industry. https://onlinenigeria.com/links/adv.php?blurb=4. Accessed June, 18, 2019. Obeng-Odoom, Franklyn. 2016. Oil in the West African Transform Margin: Dangers and Possibilities. International Critical Thought 6 (1): 101–118. https://doi.org/10.1080/21598282.2016.1142385. Palazuelos, Enrique. 2012. Current Oil (Dis)Order: Players, Scenarios, and Mechanisms. Review of International Studies 38 (2) (April): 301–319. Phimister, Ian. 1995. Africa Partitioned. Review (Fernand Braudel Center) 18 (2, Spring): 355–381 (27 pages). Pilkington, Ed. 2009. Shell Pays Out $15.5 m Over Saro-Wiwa Killing. Available at https://www.theguardian.com/world/2009/jun/08/nigeria-usa. Accessed July 14, 2019. Raphael, Sam, and Doug Stokes. 2011. Globalizing West African Oil: US ‘Energy Security’ and the Global Economy. The Royal Institute of International Affairs 87 (4): 903–921. Roberts, Adam. 2006. The Wonga Coup: Guns, Thugs and a Ruthless Determination to Create Mayhem in an Oil Rich Corner of Africa. New York: Public Affairs. Schneiderman Witney, and Joel Wiegert. 2018. Competing in Africa: China, the European Union, and the United States, Brookings. Available at https:// www.brookings.edu/blog/africa-in-focus/2018/04/16/competing-in-africachina-the-european-union-and-the-united-states/. Accessed May 12, 2019. Stanmore Tourist Board. n.d. William Knox D’Arcy. Available at http://www. stanmoretouristboard.org.uk/william_knox_darcy.html. Accessed September 8, 2019. Steyn, Phia. 2006. Oil Exploration in Colonial Nigeria. Department of History University of Stirling Scotland, XIV International Economic History Congress, Helsinki 2006 SESSION 11. Taylor, Ian. 2006. Unpacking China’s Resource Diplomacy in Africa. School of International Relations, University of St Andrews and Department of Political Science, University of Stellenbosch, South Africa. Thrall, Lloyd. 2015. China’s Expanding African Relations: Implications for US National Security. Santa Monica, CA: RAND Corporation. The Carlyle Group. 2017. Carlyle-Backed Assala Energy Completes Acquisition of Shell Gabon Onshore Assets. Available at https://www.carlyle.com/ media-room/news-release-archive/carlyle-backed-assala-energy-completesacquisition-shell-gabon. Accessed October 11, 2019. Tullow. 2019. About Tullow in Equatorial Guinea. https://www.tullowoil.com/ operations/west-africa/equatorial-guinea.

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Twomey, Michael. 2001. A Century of Foreign Investment in the Third World. London: Routledge. United States Department of Commerce. 2019. Available at https://www. export.gov/article?id=China-Oil-and-Gas. Accessed November 12, 2019. U.S. Energy Information Administration. 2010. Office of Integrated Analysis and Forecasting, U.S. Department of Energy, Washington, DC 20585. United Nations. 2008. World Economic Situation and Prospects, New York. Available at https://www.un.org/en/development/desa/policy/wesp/wesp_ archive/2008wesp.pdf. Accessed May 12, 2017. United States Geological Survey. 2006. Geology and Total Petroleum Systems of the West-Central Coastal Province (7203) West Africa. Available at https://pubs.usgs.gov/bul/2207/B/pdf/b2207b_508.pdf. Accessed February 12, 2019. World Bank Group. 2013. Protecting West African Fisheries. Available at https://www.worldbank.org/en/results/2013/03/28/protectingwest-african-fisheries. Accessed February 12, 2019. World Bank. 2019. The World Bank in Africa. Available at https://www. worldbank.org/en/region/afr/overview. Accessed May 30, 2019.

CHAPTER 4

Oil Revenues and the State

West Africa’s Oil Wealth: Issues and Context West Africa’s political economy is heavily impacted by its hydrocarbon resources. Oil (and gas) revenue is flowing into the region at an unprecedented rate. The region’s governments are generating funds from several revenue streams including bonuses, taxes, rents, and joint ventures or sharing contracts with various external agencies. The proceeds from these new fiscal regimes are extremely crucial for the governance, political stability, and economic well-being of the relatively poor countries that constitute the subregion. Oil-dependent countries such as Angola, Nigeria, Equatorial Guinea, and Gabon, to name just four, generate between 60 and 80% of their gross domestic products from oil receipts alone. It is not an exaggeration to state that oil revenues have changed the fortunes of these countries in profound ways. Take the case of Equatorial Guinea where this author spent several weeks for this book project and saw first hand the transformative powers of oil. Before the discovery of oil in 1991, the country’s total income was $132 million, or $330 per capita. Within the next decade per capita, GDP rose significantly, peaking in 2012 at $19 billion ($24,304 per capita [World Bank 2010; Human Rights Watch 2017, p. 1]). It is not just the oil-rich countries that are benefiting from these new financial resources. The allure and power of oil wealth are such that even countries that are yet to drill for commercial oil, such as Liberia and

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Sierra Leone, still obtain substantial revenue from prospecting and various predrilling bonuses. The funds for the region’s oil minnows come through direct and indirect means that will be outlined in this chapter. To understand the political economy of oil revenues, as well as its pitfalls and controversies, with regard to state and human security, we first have to determine the financial value of the sub region’s oil reserves. Unfortunately, even with all the advances in the field of geology, especially in seismographic techniques and gravitational monitoring methods, there is no single or clear-cut answer to determining the region’s oil wealth. Estimates of oil reserves (an approximation of the amount of recoverable crude oil in a specific area) are notoriously difficult to forecast. This helps explain why even some of the most powerful stakeholders in the oil industry occasionally get it all wrong when trying to guesstimate a region’s commercial reserves. For example, in late 2016 ExxonMobil, one of the largest and wealthiest multinational corporations in the world, drilled its first well in Liberia. After weeks of “wildcat” drilling, at a cost of hundreds of thousands of dollars, the well turned out to be a dry hole. In 1996 Royal Dutch Shell estimated African oil potential at only 50 barrels (BBLS). In that same year, Mobil estimated African Oil resources at 300 barrels of oil equivalent (BOE) out of world resources at 4.450 BOE. Both of these turned out to be gross underestimates. Oil finds between 1980 and 2008 amounted to 65–70 barrels (BBLS) (Clarke 2008, p. 76). In December 2005 the highly regarded Wall Street Journal forecasted that by 2010 “West Africa will be the world’s number one oil source outside of OPEC” (Ball 2005). Though the region is still a very important part of the global oil network, that predicted scenario did not come to pass. Why is it so difficult to assess a region’s oil worth with any degree of certainty? The reasons for the challenges in precisely assessing a region’s oil wealth are numerous, ranging from company decisions to government action (or inaction), global oil consumption patterns, the price of oil on the international market, economic growth patterns and even the sociopolitical conditions prevailing in the producer country or region. To start with, the total amount of oil in a specific area, technically called the “total oil in place,” or sometimes simply the oil reserves, consists of three kinds (proven, probable, and possible), all of which have a direct bearing on the estimated worth of oil in an area. “Proven reserves” are oil reserves in which the probability of recovering the oil is at least 90%. “Probable” reserves are oil reserves in which the probability of recovering the oil is

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at least 50%. “Possible” reserves are oil reserves in which the probability of recovering the oil is less than 50%. The proven reserves are without a doubt the most valuable and therefore worth more because of the certainty it has. It is important to remember also that, due to economic, technological, geological, and political challenges, not all of the total oil in place is recoverable (Amaded 2019; Oil Reserves 2019). So to estimate West Africa’s oil worth, we would need to determine whether one is referencing proven, probable, or possible reserves. The challenge of arriving at an oil estimate for a region is further complicated by the fact that oil is a dynamic rather than static natural resource. Unlike other natural resources, such as coal, that stay where they are formed, oil is fairly mobile. It moves around until it is trapped in underground barriers called pools. A moving target, especially one that is underground or below the ocean floor at thousands of feet, is more taxing to pin down and evaluate. Also, West Africa’s oil is geographically dispersed (with oil finds occurring in onshore, offshore, and ultradeep waters) making it harder to assess its full financial worth. Oil that is found onshore is relatively cheaper to extract than oil found offshore or in ultra-deep waters, such as is common in Angola, with the latter requiring specialist tools and highly experienced personnel to be able to harness the resource. Whether the find is economically viable is the first question geologists would need to answer before drilling commences. Companies will drill for oil if it is worth the investment. If it is not, and the market conditions are not favorable, they simply won’t invest their resources. The oil business is also a specialized field to the extent that generating the geological data, analyzing, and interpreting it to establish the commerciality of reserves is a highly technical and time-consuming process. According to OpenOil (2012), analyzing seismic data and interpreting results takes an average of two to four years, during which time the price of oil changes dramatically. For example, Canada’s Oryx Petroleum took almost the whole of 2017 acquiring and interpreting 3-D seismic data covering a portion of its AGC Central Licence Area off the shore of Guinea-Bissau and Senegal (Oryx Petroleum 2018). Also, the value of oil in a specific locale is determined not just by the cost of extracting it but also by how much the end-user is willing to pay for it, financially or otherwise. The final cost of oil, as Wiorkowski (1981) points out, is “heavily dependent on both the costs of fossil fuel exploration and recovery and the price, both social and economic, that consumers will expend for the final products” (p. 534). One of the most

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important externalities that can complicate the valuation process of a region’s oil wealth is price fluctuation, a phenomenon that has been a constant feature of the oil industry for the past forty years. Prices were high in 1979 ($86.60), 1980 ($114.93), and 2008 ($107.05) (price adjusted for inflation) but dipped again in 1985 ($63.26), 1989 ($37.36), 1998 ($18.48), and 2002 ($32.03 [Inflation Data 2019]). Oil-dependent economies, such as the ones in West Africa, are often adversely affected by price fluctuations. Because the resource-rich countries are overly dependent on one commodity (in this case, oil) for the majority of their foreign exchange earnings, they have a difficult time balancing their budgets and meeting public spending or fiscal obligations (Mazaheri 2014, p. 770). The end result is that such governments are forced to cancel investments and restrict spending as a way to curb inflation. On my 2015 visit to Abuja, capital of Nigeria, I saw signs of this unpredictable economic planning caused by overdependence on oil revenues. Driving around the city, one could not help but notice the numerous unfinished public projects. My unofficial guide, a college instructor from the oil-rich delta state who was in the city for a conference, explained the problem: “When the contractors are not paid on time they suspend or in some cases just abandon the project, sometimes poor planning and the wrong people, sometimes political appointees with very little experience being put in charge of major projects” (Interviewed by author, Delta State, Nigeria, 2015). This was startling, given that more than 40 years after the city was officially relocated from Lagos at the cost of billions of dollars, large parts of it still had the look and feel of a work-in-progress. The difficulty of policy design in such an atmosphere was highlighted in 2008 by Godswill Akpabio, a Nigerian state governor: Our economic fortunes have largely depended on the global oil market. In 1985, our gross domestic product (GDP) was $81 billion, but ten years after (1995) it dipped to $40.5billion. And ten years after that (2005) it went up to $99 billion. This makes economic planning an unpredictable enterprise. (quoted in Mazaheri 2014)

Despite these highlighted challenges at arriving at a credible valuation of the region’s oil wealth, estimates are a critical element for designing a comprehensive oil regime, including forecasting revenues and expenditures. One of the key benefits of knowing a country’s oil worth, particularly for producer governments, is that it makes them credit-worthy

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and therefore more attractive to borrowers on the international market. Improved rating allows them to borrow with relative ease, with future oil productions as the main guarantor. Countries with oil potential find it easier to raise funds on the global market, as these are often guaranteed against future oil production (Kaldor et al. 2007, p. 109). In other words, a country that has proven oil reserves can more easily borrow money from the international market than those without. Oil wealth is almost always enough collateral for securing loans on the global market. That is most certainly the case with Angola, which has found itself in a unique position of access to large amounts of funds, mainly Chinese loans. Oil estimates are also important not just for securing loans, but also for planning and budgeting purposes.

Oil Revenue Streams Oil revenue is money earned from the exploration, production, and sale of oil. In oil economic terms, revenue is a combination of money spent on exploration, generating, and interpreting data (negative revenue) plus money obtained from the signing of contracts and the sale of the end product also known as positive revenue (OpenOil 2012). There are many revenue streams for governments from a typical oil project. At the most basic level, oil revenues are often split between the host or producer government and the international oil company. The fiscal terms are often outlined in the oil contract signed between the government and the IOC. The money paid out to the producer government comes in the form of surface rents, taxes, bonuses, and gross royalties. The challenge for producer governments is to balance their need to capture as much of the oil revenue as possible from the IOC while at the same time creating enough incentives for the latter to continue operations and in turn make profits. Some of the major sources of revenue that accrue to governments as outline by OpenOil (2012) includes the following: • Signature bonus (payment to government at the time of the signing of the petroleum contract)—often involves no risk to government, • Production bonus (payment made at a certain point in the life span of a petroleum contract), • Rental (fixed amount paid on an annual basis, regardless of the price of oil), • Corporate income tax,

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• Royalty, • Profit share, and • General taxes such as import duty, excise, withholding, sales. In addition to these general revenue streams, parties can also tweak a contract to make it more specific to the local circumstances in line with various tax laws. For example, the government of Equatorial Guinea included a clause in its oil contract where it reserves the right to impose a “windfall tax” on a contractor which basically means that when the price of oil goes up on the international market, the share of the government also increases. In Equatorial Guinea, the minimum royalty is 13%. The amount, though often paid in cash, can also be paid in kind: fully, partially, or in a manner stipulated under the relevant contract (Colon and Gerena 2014; Equatorial Oil 2006). In general, clauses in the contract makes room for flexibility; royalties and other forms of payout to the government are not fixed but dependent on daily production rates. Each of these fiscal tools provides revenue to the government at different times over the lifespan of a petroleum contract. Some, such as the signature bonus, are payments made at the beginning of the contract and others, such as the general taxes, are staggered payments made from the onset of the production phase to the very end of the project cycle, also referred to as the abandonment phase. While some of these funds are not necessarily large payouts, others are not unsubstantial and are muchwelcome sources of revenue for governments experiencing various forms of financial challenges. Ghana charges a rental fee of $30 per kilometer during the first exploration period. In the second exploration period, the amount increases to $50 per kilometer. It is $75 at the final phase and as high as $100 for the development and production phases (OpenOil 2012, p. 80). While generally these revenue streams may be large, Angola awarded a deepwater offshore block for $1.1 billion (OpenOil 2012, p. 79). Even non-oil-producing countries such as Sierra Leone and Liberia obtain a substantial amount of money in spite of the fact that they are yet to produce commercial oil. Liberia’s oil production is at least five to seven years away from actualization, with an estimated $1 billion foreign direct investment required to build and run the required infrastructure. If managed properly, oil revenues could add an estimated $100 million a year to the country’s economy in the next decade, a huge boost to a country with a national budget of only $400 million (West Africa Oil Watch

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2014). Even though its commercial production is several years away, the government has already started generating funds from its potential oil wealth. In 2009 Chevron paid the Liberian government more than $30 million after it was granted the rights to develop three offshore blocks. Half of the payout was classed as “signature bonus,” while the remaining was for tax-deductible community development funds for a period of five years. In addition to those payments, Chevron also paid the Liberian government $15 million in withholding taxes for 2010 (Propublica 2012). Sierra Leone offers another instructive example. According to the SLEITI Second Reconciliation Report that covered the period 2008– 2010, before oil was discovered in 2009, Anadarko paid the Sierra Leone government $481,870 for surface rent, for contributions to a training and development fund, and geophysical data (SLEITI 2012). In 2010, after the discovery of oil, Anadarko’s payout increased to $966,905. The grand total for possible earnings from oil block sales for the Sierra Leone government for 2013 was $11,758,002. Again, this is a very general calculation that in all probability underestimates potential earnings (SLEITI 2012; West Africa Oil Watch 2014).

West African Oil Wealth: The Numbers Due in part to advances in technology and in the field of geology we now have a fairly good sense of the quantity (and quality) of West African oil. Seismic data provides reliable scientific ways of determining and arriving at a safe estimate for determining the quantity of oil reserves in a particular locale. The USGS World Energy Assessment Team carried out a detailed assessment in 2000, estimating West Africa of having oil with “mean volumes of 71.5 billion barrels of oil” (USGS 2010). This assessment, one of the most authoritative, placed West Africa at seventh globally in proven reserves. Though it lacks the high volume of oil found in other parts of the world, such as the Middle East, what is not in doubt is that West Africa has viable proven reserves as evidenced by new finds in hitherto unknown zones. As highlighted in Chapter 2, estimates of commercial or recoverable oil vary considerably by country. West Africa is the oil powerhouse of sub-Saharan Africa, with four of the top five producers all located in the region. The subregion had proven oil reserves of 132.4 billion barrels at the end of 2011, an increase of 154% over the 1980 figure of 53.4

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billion barrels (Brown 2013). Nigeria, the largest producer on the continent, produces 113 million tons per year. Angola, a distant second, produces 88.7 million tons annually. As a result of its proven reserves, West Africa is now widely recognized in the oil industry as one of the most promising hydrocarbon provinces in the world. The region’s onshore and offshore basins and deep waters contain enormous oil reserves that could potentially revive its sputtering economies. The “oil zone,” which is concentrated in the Gulf of Guinea, holds an estimated 100 billion barrels of proven reserves, making it one of the most productive oil-producing zones in the world (USGS 2010). The oil finds are also widely dispersed. In the past five years, commercial-quality oil sources have been found on or off the coasts of Senegal, Gambia, Sierra Leone, Liberia, Ghana, and Sâo Tomé, and Principe. Although the estimates of recoverable oil reserves vary in their certainty, what is clear is that several countries, according to the available data, have enough exportable oil to transform their economies and address their developmental challenges. Top countries in oil recoverable reserves include Nigeria (5002.7 mt), Angola (1709.4 mt), Gabon (273.6 bcm), and Chad (215.8 bcm). Top producing countries include Nigeria (113 mt), Angola (88.7 mt), Equatorial Guinea (13.5 bcm) and Gabon (11.6 bcm; Current estimates put four billion barrels in Sâo Tomé and Príncipe, two billion in Ghana, 1.5 billion in Senegal and Liberia, and one billion in Gambia (World Energy Council 2017) (Table 4.1). In the last ten years, oil exploration has picked up in earnest in heretofore oil-less sections of the region. As the scope for further oil exploration in the region expands, the numbers—in terms of both proven reserves Table 4.1 Oil wealth of West Africa (for select countries) Country

Nigeria Angola Equatorial Guinea Gabon Ghana (current)

Estimated reserves (1000 barrels)

Production (1000 barrels per day, bpd)

Annual production (in million tons)

36,220,000 8,000,000 1,100,000 2,000,000 15,000

2167 1695 320 230 115,000–200,000

113 88.7 13.5 11.6 5.2

Source Compiled by author from various sources

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and probable reserves—are expected to increase in the coming years. For example, according to the World Energy Council estimates, there may be at least 100 billion barrels of oil offshore that is yet to be discovered (Belfrage 2017). Even countries that are producing oil are set to increase their output in the next few years. For example, Ghana’s oil reserves currently stand at 15,000 barrels, but that is set to increase to between 600,000 and 1,300,000 barrels per day in the next five years: at the very minimum, a nearly fourfold increase (World Energy Council 2017). Once they are “onboarded,” these lesser-explored countries could further dramatically increase the oil viability of West Africa. A brief discussion of the oil revenues of select countries follows, highlighting the changing face of emerging fiscal regimes in the region. Nigeria, the subregion’s largest oil producer is the natural choice for any discussion on oil revenues in West Africa. The country is enormously wealthy in oil, with the Niger Delta as its richest oil province. The Nigerian government accrues more than $7 billion in annual revenue from oil. In a 30-year period (between 1958 and 1998) Shell extracted an estimated $130 billion worth of oil from the country, with $30 billion of that from Ogoniland in the Niger Delta alone. Overall the country is estimated to have earned well over $350 billion in oil revenue over the past 40 years (Harshe 2003, p. 114; McDougal 2009, p. 806). Lessons from the Nigerian case will continue to appear throughout this book for now suffice it to state that the fortunes and misfortunes of Nigeria can be traced to its oil wealth. Angola is the second-largest oil producer in sub-Saharan Africa, after only Nigeria. Angola’s highly lucrative deep oil fields have caught the world’s attention. Between 1999 and 2001 the Luanda-based government earned an estimated $10 million a day from its oil fields. By 2002 the country doubled its oil earnings to $20 million a day. Most of the oil wealth lies in its ultra-deep waters and in its restive Cabinda province, where Cabinda Gulf Oil Company, a subsidiary, has continued to produce more than 2,40,000 barrels a day (Harshe 2003, p. 115). The centrality of oil was not always the case for Angola. Prior to the discovery of oil, it was a major agricultural producer. But by 1973 oil had overtaken coffee as the biggest export, bringing in 3.8 billion in fiscal revenue (Kaldor et al. 2007, pp. 106–107). In 1998 oil accounted for 61% of GDP and 71% of government revenue (pp. 109–100). The country’s oil income has increased exponentially since then. Between 2006 and 2015, the Luanda government earned a whopping $267.2 billion in oil-related revenues.

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This sum includes taxes collected directly from oil companies such as ExxonMobil, Texaco, and BP, as well as proceeds from the state-owned oil company, Sonangol. On average the government secured around $27 billion per year during the last decade. In 2013 Angola’s oil revenue was $37.1 billion (Jensen 2018, p. 6) Estimates of Ghana’s oil finds have ranged between 800 million and 3 billion barrels. The size of the daily barrels of oil extracted is between 24,395 and 105,000 barrels per day (Obeng-Odoom 2016). According to the Ministry of Finance and Bank of Ghana figures, the total income earned from oil as of September 2018, was $723.55 million. This compares with the receipts of $362.58 million for the same period in 2017. The receipts from royalties have also increased steadily. In 2016 the government earned $44,793,483. In 2017, it was $91,760,907. By 2018, it had jumped to an impressive $208,656,066 (Ghana Ministry of Finance 2018). Ghana is increasingly becoming a petrostate and thus more dependent on oil revenues Equatorial Guinea, one of the smallest countries in the subregion, has more than one billion barrels of proven oil reserves. The tiny Lusophone country has exported as many as 400,000 barrels of oil a day since 1995, which Diamond and Mosbacher (2013, p. 86) described as “a bonanza that has made the country wealthier, in terms of GDP per capita, than France, Japan, and the United Kingdom.” The windfall profits from oil revenues have been made possible to a large extent by Mobil Oil Corp, whose technology and investment have helped the country double its GNP since the mid-1990s (Diamond and Mosbacher 2013, p. 114). The country took in approximately $45 billion in oil revenues between 2000 and 2013, catapulting it from one of the world’s poorest countries to the one with the highest per capita income on the African continent. Oil exports currently represent over 90% of total export earnings (Human Rights Watch 2017). Côte d’Ivoire is French-speaking West Africa’s largest economy. It also has one of the largest reserves among Francophone West Africa. Its current oil reserves stand at 14 million tons, according to the World Energy Council (2017). For more than 40 years oil has played an important role in the economic development in the country. In 1970, oil revenues constituted 6.5% of the country’s GDP. This share has steadily increased over the last two decades. In 2004, for example, oil exports expanded in both volume (38%) and value (64%) over 2000 levels. Oil exports constituted 15% of all exports in Côte d’Ivoire in 2004 (African Development

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Report 2005, p. 237). More recent figures clearly show that the hydrocarbon industry is pivotal to the Ivorian economy. Figures compiled by the EITI through its disclosure mechanisms show that the country earned around $687 million with the vast majority of these funds, more than 90%, accrued from its crude oil. The revenue stream is as follows: 31% through the state’s share of profit oil, 31% through PETROCI’s share of in-kind revenue (profit oil and cost oil), and 3.4% from signature bonuses (EITI 2019; Obeng-Odoom 2016, p. 105). Another francophone African country worthy of note is Senegal. The country has yet to make any substantial funds from its huge oil potential. It begins commercial oil production in 2022, having established viable oil finds off its coast. According to Petrosen, the state-run NOC, the country hopes to receive more than $30 billion—three times its 2018 public debt stock—over the next 30 years. According to the self-reporting mechanisms adopted by the EITI, the government earned $93,165,487,564 from its extractive industry in general in 2017 (EITI 2019; African Business Magazine 2019). Petroleum is the primary source of public revenue in Gabon, the African continent’s eighth largest producer of crude oil. It is one of only three countries in the subregion that is a member of the Organization of Petroleum Exporting Countries (OPEC), after it rejoined in the summer of 2016. The other two countries in the subregion that are part of that exclusive club are Nigeria and Angola. Gabon produces an average of 240,000 barrels (38,000 m3 ) of oil per day in 2014. Its proven crude oil reserves are estimated at 2.0 billion barrels (OPEC 2019). Its crude oil earnings account for between 27% of GDP to as high as 60% of government revenue in 2017 (US State Department 2019). The Minnows Benin: Even though Benin has been producing commercial oil since the 1970s, its overall output remains negligible. Not surprisingly, with no new discoveries and skyrocketing costs, the country stopped drilling for oil altogether by the end of the 1990s. It slowly resumed operations in the 2000s. The last discovery of note occurred in 2013 when the Nigerian exploration company South Atlantic Petroleum (SAPETRO) discovered

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an 87-million-barrel field in the republic’s onshore Block 1. Like elsewhere in the region, however, Benin’s own share of production and output is set to increase. Output could start at 7500 barrels per day (African Oil and Power 2019). Sierra Leone: Oil was first discovered in the country by the Texas-based Anadarko petroleum in 2009 in an offshore area off the Atlantic Ocean now known as Venus. This was followed a year later by yet another offshore discovery by the same company in 2010 in an area labeled Mercury. Further discoveries soon followed. In 2012, UK-based Tullow Oil discovered more offshore oil. A series of oil block tenders, the last of which was completed in August 2012, led to Petroleum Blocks being awarded to a range of Africa-specialist and some relatively unknown IOCs (see Table 4.2). African Petroleum puts Sierra Leone’s oil worth at an estimated 2.5 billion barrels, which translates roughly into 40 billion dollars (Graeber 2017). For one of the world’s poorest countries with a 2016 UN Human Development Index ranking of 179 out of 188 countries (UNDP 2015), such a colossal amount, if properly harnessed, has the potential to transform Sierra Leone into to a stable and sustainably developed country. But the country’s poor administration of its mineral resources shows that sound management for the benefit of the citizenry of the country is not a guarantee. Already there are signs pointing to future challenges. Table 4.2 provides a summary of the oil concessions and their current ownership. The bidders and eventual winners of the oil concessions were overwhelmingly foreign-owned, from countries such as Malaysia, Nigeria, Russia, and Gibraltar as well as Western countries such as the United States, Australia, and the United Kingdom. Liberia: In February 2012 African Petroleum Corp and Anadarko announced the joint discovery of “good quality oil” off the coast of Liberia. The positive news was the culmination of more than 50 years of exploratory efforts and test-drilling of wells by American (mainly Texasbased) oil and gas companies such as Frontier, Union Carbide, Fusion Oil and Gas, Amoco, and Chevron. After such a frustratingly long waiting period, which saw many of these companies disengage or drastically reduce their investment in the country’s oil exploration, the announcement reinvigorated the waning interest in Liberia’s oil industry. But with the renewed interest came high hopes about the transformative powers of oil. To add to the hype, barely two months after the “good news” announcement, on April 20, 2012, President Ellen Sirleaf gave a major policy speech at Rice University’s Baker Institute for Public Policy, in

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Table 4.2 Oil companies occupying oil blocks in Sierra Leone and the estimate payout in 2013 Block

Company

SL-01 SL-02 SL-03

OPEN OPEN African Petroleum African Petroleum Petronas LUKOIL Prontinal Ltd. Talisman LUKOIL Oranto Pan Atlantic Minexco Petroleum Inc. Signet Petroleum Ltd. Andarko Petroleum Corp. Reposol Tullow Oil Masters Energy Oil & Gas Ltd. Chevron Sahara Noble Energy Odye Africa Ltd. Chevron Sahara Noble Energy Odye Africa Ltd. SL Exploration, Investment & Management GmbH SL Exploration, Investment & Management GmbH

SL-04A SL-04B SL-04B SL-04B SL-04B SL-05 SL-05 SL-05 SL-07A SL-07A SL-07B SL-07B SL-07B SL-07C SL-08A SL-08A SL-08A SL-08B SL-08B SL-08B SL-09A

SL-09B

Country of company

Percentage of block

Estimated payout ($)

Australia

100

909,090

Australia

100

909,090

Malaysia Russia United Kingdom Canada Russia Nigeria United States Gibraltar

25 25 20 30 49 30 21 90

227,273 227,273 181,818 272,727 445,454 272,727 190,909 818,181

United Kingdom

10

90,909

United States

55

966,905

Spain Ireland/UK Nigeria

25 20 100

439,502 351,602 909,090

United States United States United Kingdom United States United States United Kingdom Germany

55 30 15 55 30 15 100

500,000 272,727 136,364 500,000 272,727 136,364 909,090

Germany

100

909,090

(continued)

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Table 4.2 (continued) Block

Company

SL-10A SL-10B

OPEN Varada Petroleum & Hydrocarbons

Country of company

Percentage of block

Estimated payout ($)

United States

100

909,090

Total

11,758,002

Source Vandy Kanyako/Robert Tynes, West Africa Oil Watch

Houston, Texas, as part of the Chevron Excellence in Leadership Lecture Series on oil. In the speech, targeted to potential investors, she outlined three key elements that are critical to the successful management of her country’s oil industry: reforming policies to bring them in line with international standards and best practices; seeking and strengthening partnerships with companies with the required technical skills and resources, and guaranteeing that the proceeds will benefit Liberia and Liberians. Less than a year after this Liberia-is-open-for-oil-business speech, in January 2013, African Petroleum declared a commencement to test drill on its Narina-1 site to better gauge the commercial viability of the site and the country’s new finds (NOCAL 2019). For a country devastated by more than 15 years of civil conflict and hobbled by foreign debt (more than $4 billion) and donor funding volatility, the announcement was misconstrued as the commencement of uninterrupted commercial drilling. Managing and dampening local expectations about an imminent economic windfall from the country’s fledgling oil industry will be a major challenge and a potentially destabilizing factor as expectations and reality clash.

Producer Governments and the Role of the State Producer governments remain the most dominant stakeholders in the region’s industry. As the source of legal authority, the set policies, monitor implementation and enter into negotiations with external investors. They mediate the relationship between the people and the external actors discussed in Chapter 3. Governments create the regulatory framework, monitor implementation, and introduce new tax regimes as a way of maximizing share of oil revenues. The government enters into negotiations and signs contracts on behalf of its people. A typical oil project cycle involves

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several contracts with a host of stakeholders. The most important of these contracts is the one between international oil companies and the actual or prospective oil-producing government, often known as the host government contract. The regulatory framework in which the oil companies operate is often enshrined in this contract. For example, the Ghanaian parliament passed the Revenue Management Act, which outlines the varied ways of collecting and distributing petroleum revenue (Dovi 2013). Lawmaking bodies in Sierra Leone, Liberia, and Nigeria all passed local content laws aimed at strengthening the capacity of local actors in their respective countries’ oil industries. Governments are often interested and heavily involved in all links in the oil extraction chain, from prospecting to the distribution and sale of the finished product. Because oil has a direct impact on the price of basic commodities, governments are often heavily vested in its downstream phase (refining, marketing, distribution, and sale). The distribution and sale of oil for domestic consumption is in all countries in the region the sole preserve of governments. Due to a plethora of issues including financing and logistics, they often tend to manage these affairs in concert with other parties, including domestic or foreign importers. In some countries, governments issue licenses specifically for the purpose of distribution and sale of the finished product. The other critical reason for the involvement of the producer governments is that in West Africa, oil and other kinds of natural resources such as gas are considered collective property. They belong to all the citizens, with management vested in the state. The resources are exploited under society’s mechanisms of collective decision-making. Sierra Leone provides an example of how governments assert control over the oil production and supply chain. In order to garner a larger share of its natural resource wealth in oil and to enhance local participation, the country instituted legislation to bring the petroleum industry under the purview of the state. In 2011 Parliament passed the Petroleum Exploration and Production Act “to provide for the management of petroleum operations, to regulate and promote petroleum exploration, development and production; to regulate the licensing and participation of commercial entities in petroleum operations; to provide for proper supervision of petroleum operations, to promote the participation of Sierra Leoneans in the petroleum industry; to provide for efficient and safe petroleum operations; to provide for an open, transparent and competitive process of licensing and for other related matters” (Government of Sierra Leone

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Petroleum Exploration and Production Act 2011, p. 3). In general, the act gives all rights to petroleum to the state, with the Petroleum Directorate administering the act and managing all petroleum resources produced. In fiscal terms, this means establishing how revenues will be generated: tax percentages, as well as royalty and signature bonuses with oil companies. Additionally, the Petroleum Directorate initiated a call for local content requirements. The government foresaw the immediate potential to generate money by spreading the oil wealth through the active participation of local companies and local entrepreneurs in areas such as refining, marketing, and distribution, as well as tertiary industries including air transportation, insurance, telecommunications, real estate leasing, and banking. Oil revenue flow, it must be pointed out, is a very top-down process. From the international oil companies that have been granted the rights to drill for oil and pay the government’s share, revenue flows directly into the coffers of the government. There is no intermediary involved, and often very little scrutiny or oversight. Once the money is in its coffers, often the government alone can decide how to allocate the proceeds—through legislative and other formal institutions, including national oil companies. The funds that the government receives are known in oil industry parlance as oil rents, which is a reference to the difference between the value of crude oil production at world prices and total costs of production. In petro-countries such as Angola and Nigeria oil earnings account for a sizable share of GDP. In 2019 oil rents accounted for more than 50% and 55% of Equatorial Guinea and Angola’s GDP, respectively. Gabon’s was over 40% in 2017. Oil rents are critical to West Africa’s producer governments. The World Bank (2019) outlines the problem with relying on this source of income: Rents from nonrenewable resources indicate the liquidation of a country’s capital stock. When countries use such rents to support current consumption rather than to invest in new capital to replace what is being used up, they are, in effect, borrowing against their future.

The other challenge with rent is that they are not funds earned from production, as such it tends to be seen by governments as easy money. Also because the availability of oil makes it easier for countries to borrow money from the international market, oil revenues earned through this means creates dependency syndrome. Furthermore, because the oil

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producer countries in the region have no control over the prices of their natural resources, it makes it harder to plan and budget. When flush with cash from oil rents governments embark on a spending spree. How much a country earns from rents is partly determined by the type of contract entered into (Figs. 4.1 and 4.2). Governments execute the petroleum development objective of entering into and executing contracts on behalf of their people using one of four main types of arrangements:

Fig. 4.1 Oil rents (% of GDP) (Source Estimates based on sources and methods described in “The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium” [World Bank 2011]. License: CC BY-4.0)

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Fig. 4.2 Oil rents (% of GDP) in West Africa (Source Estimates based on sources and methods described in “The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium” [World Bank 2011]. License: CC BY-4.0)

• • • •

concessions joint ventures production sharing contracts service contracts (Radon 2013).

As shown in Table 4.3, most West African oil-producing countries use production sharing agreements (PSAs), also referred to as production sharing contracts (PSCs). Because West African producer governments lack the financial and technological capabilities to harness their resources,

4

Table 4.3 Types of production agreements

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Country

Type of production agreement

Nigeria Angola Equatorial Guinea Ghana Gabon

PSA PSA PSA PSA/JVA PSA (plus a host of others)

91

they often have to enter into these kinds of ventures or contracts. Under such types of contracts, a government retains ownership of oil (managed on behalf of the community, of course). The PSA type of agreement allows the state greater control than does a concession or joint venture contract. Ghana is the exception to the rule, as it allows not just PSAs but a host of other instruments including joint venture agreements. Often these are entered into through an institution referred to as the national oil company. The nationalization of oil resources, both in OPEC and non-OPEC countries, led to the emergence of new players known as the National Oil Companies (hereafter NOCs). Because they own most of the world’s reserves and have extensive distribution networks, refining industries, and sale centers for finished products (Palazuelos 2012, p. 305), they affect revenue allocations. Governments’ primary interface with international oil companies and other external actors often occurs through their NOCs. Such an agency will be the primary party to a petroleum contract, as it acts on behalf of the state. Governments assert their ownership over international oil companies through NOCs, whose role is to supervise and check the implementation to ensure international and domestic companies uphold their own side of the bargain. Perhaps as a result of the significance and outsize role of oil in each country, their respective oil sectors are heavily regulated. All oil-producing countries in West Africa have their own NOCs, a reference to companies that are majority-owned by the governments, that is responsible for managing production and defending their national interests in the oil sector (Belfrage 2017). The NOCs play a critical role in mediating the relationship between sometimes relatively weak producer countries, such as Equatorial Guinea, and larger, more powerful international corporations and foreign governments. With primary responsibility for governing, regulating and in some cases drilling for oil, they are

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involved in every aspect of the industry’s supply and value chain. Because they sometimes lack the technical skills or trained personnel, these NOCs, collaborate, through joint ventures with international oil companies. The case of Angola illustrates the importance of nationalized institutions of this nature. Shortly after independence in 1976, one of the first institutions that the new government in Luanda founded was its NOC, Sociedade Nacional de Combustíveis, better known by its acronym SANONGOL. According to its official website, Sonangol is the stateowned oil company, responsible for the management of oil and natural gas exploration on the subsoil and continental shelf of Angola, and is responsible for the exploration, production, manufacturing, transportation, and marketing of hydrocarbons in Angola. The situation in Ghana’s oil sector is similar to that of Angola. In 1983, Ghana established the Ghana National Petroleum Corporation (GNPC) to promote exploration and production, and to reduce the country’s overall dependence on foreign petroleum imports. The GNPC signed a series of PSAs with a number of IOCs, including the US-based Amoco, which was charged to prospect in ten offshore blocks between Ada and the western border with Togo; Petro Canada International, which was granted the right to prospect in the Tano River Basin; and Diamond Shamrock in the Keta Basin (International Business Publications 2013). In the hope of finding oil, even nonproducing countries have their own national oil companies (Table 4.4). The situation in Liberia highlights the importance as well as the pitfalls of domestic oil companies in West Africa. The National Oil Company of Liberia (NOCAL) was formed through the NOCAL Act in April 2000 by the Liberian House of Representatives for the purpose of regulating the country’s nascent oil industry. After its formation NOCAL’s immediate tasks included coordinating ongoing finds and managing the fiscal and regulatory framework within which the emerging industry would operate. This involved working with parliament to negotiate PSCs with the international oil companies, and dividing up and managing the various concessions that had been started by its predecessor institution. Seventeen of these blocks (LB1–LB17) are found at the continental shelf in water depths of 2500–4000 m, while thirteen of the blocks (LB18–LB30) are considered ultra-deep, with water depths of up to 4500 m. Dividing the country’s offshore area (located in shallow and deep water) into thirty concessionary blocks involved negotiating several vested interests, as both

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Table 4.4 National oil companies of West Africa Country

NOC

Year established

Ghana

Ghana National Petroleum Corporation (GNPC)

1983

Nigeria

Nigeria National Petroleum Company (NNPC)

1977

Angola

Sociedade Nacional de Combustiveis (SONANGOL)

1976

Liberia

National Oil Company of Liberia (NOCAL)

2000

Gabon

Gabon Oil Company (GOC)

2011

Côte d’Ivoire

Petroci

1975

Mandate Petroleum products and reducing the country’s dependence on crude oil imports, through the development of the country’s own petroleum resources Manages the venture between multinational corporations and the Nigerian government Responsible for the management of hydrocarbon exploration, production and manufacturing on the subsoil, and continental shelf of Angola Develop Liberia’s hydrocarbon potential for national self-sufficiency and sustainable development Own and manage government stakes in oil fields as well as their revenues A fully state-owned company that is responsible for the state’s portfolio management in the hydrocarbon sector

(continued)

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Table 4.4 (continued) Country

NOC

Year established

Equatorial Guinea

GEPetrol

Established by Presidential Decree in 2001 (operational in 2002)

Senegal

Petrosen

1981

Mandate Manages the state’s participation as a shareholder and other rights and obligations derived from the (PSCs) In collaboration with the Department of Energy, prepares and negotiates all petroleum conventions and contracts

Source Author

parliament and the executive branch of government took a keen interest in the process (NOCAL.org). The second pressing task for NOCAL was organizing open and transparent licensing rounds for the various concessions. In a typical bid round, companies compete against each other by offering the best terms to win the contracts. Two oil bid licensing rounds (2004 and 2009) were conducted by NOCAL. The 2004 bid round awarded six offshore blocks to five international oil companies: blocks 8 and 9 (African Petroleum), blocks 11 and 12 (Oranto), block 13 (Broadway, later Peppercorn and then COPL), block 15 (Woodside), and block 16 (Repsol). In 2004, 10 out of the 17 deepwater blocks were awarded (LB8–LB17). In 2004 eight blocks (LB8, 9, 10, 11, 12, 13, 15, and 16) were awarded to five international oil companies. Two blocks are currently under negotiations (LB6, LB7) and seven blocks (LB1–LB5, 29, and 30, all in Harper Basin) are expected to be part of the next licensing round in the third quarter of 2014. The third pressing task of NOCAL was—with the approval of parliament—to enter into negotiations with the oil companies on behalf of the Liberian government. As a company with little knowledge of how the industry works, it has had to learn fast. To that end, it has utilized a combination of (a) ad hoc negotiations, when an unsolicited investor asks for a particular block and negotiates a contract directly, and (b) a two-phased

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PSC arrangements, when a contractor owns a share of the oil once it is drilled. Of these, the two-phased PSC has been the most commonly used, although the executive branch of government has been pushing for more direct ad hoc negotiations. The first phase of the PSC governs how long the contractors have to interpret the data received from NOCAL (usually three years), and the second phase outlines how long the contractors have to explore (usually two years) based on the received data. If during the first exploration period the company has fulfilled all exploration work commitments, a third exploration period of two years may be awarded. In the event that the oil company discovers petroleum, a two-year appraisal period is granted with further extensions possible upon government approval. If a field is deemed to be commercial, an exploitation perimeter will be awarded over the field for a 25-year period with the potential for an additional period of up to 10 years following the expiry of the original exploitation permit. Multiple fields on a block may each qualify for individual exploitation perimeter awards (Canadian Overseas Petroleum Limited 2016). At the end of the third exploration period, the whole remaining surface area of the block will be surrendered, with the company then only retaining any Appraisal Perimeters or Exploitation Perimeters granted to that point. PSCs in Liberia typically allow 70% of produced volumes (less royalties) to go to cost oil (recovered by the contractor), with the remainder being shared between the government and the contractor on a sliding scale. Royalties and other fees also apply. Under NOCAL’s direction, the Liberian petroleum industry has negotiated with and entered into PSCs with no fewer than 16 international oil companies from 10 countries as diverse as Japan, Bermuda, Australia, and Nigeria. Though NOCAL is the principal player, the PSCs are negotiated between the companies and the Hydrocarbon Technical Committee, a cross-governmental committee chaired by NOCAL. It includes departments such as Justice, Finance, Lands and Mines, National Investment Commission (NIC), the Environmental Protection Agency, and the legal advisor to the president. All the PSCs are ratified by the legislature before they come into effect. The main legal instruments for these negotiations are the Petroleum Law (2000), the Environmental Protection and Management Law (2002), and the Liberian Extractives Industry Transparency Initiative (2009).

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Concessions have also changed hands at an alarming rate forcing NOCAL to introduce prebidding qualifications. For example, block 13 was first bought by Broadway, later Peppercorn, who turned around and sold it to the Canadian company COPL. In the case of block LB13, a five-year exploration period was granted in March 2013 that consisted of two consecutive periods (three years and two years, respectively). At the end of the first three-year period, at least 33% of the surface area of the block will be surrendered with the area to be surrendered comprising itself a single block. Work commitments for LB13 include $10 million of seismic work (as well as $10 million of analysis) and the drilling of one well to a minimum depth of 2000 m. National oil companies are critical elements in West Africa’s oil industry. As government agencies they navigate the space between international investors and producer governments. As the focal points of contact, they represent interests, manage tensions, all by providing oversight and enforcing rules of the industry. Because of their political influence, they are the judge and jury who lord over the oil industry.

The Challenges of Managing Oil Revenues Evidence shows that, even with the best of intentions, oil revenues do not always translate into oil wealth, especially for the citizenry. Petroleum revenue is critical to a poor country’s development as well as to producer governments’ survival. Some governments learn lessons based on other’s experiences and try to minimize the negative impact of oil. In Ghana, oil contributed 4% of the government’s total capital spending in 2011. The proceeds were invested in social services, agriculture, road infrastructure as well as for capacitating the petroleum sector in general. In 2017, the Ghanaian government distributed petroleum revenues in the following priority areas: agriculture (16.31%); physical infrastructure and service delivery in education (30.23%); physical infrastructure and service delivery in health; (3.24%); and road, rail, and other critical infrastructure development (50.21%) (Ghana Ministry of Finance 2018). But evidence elsewhere shows that is not always the case. The case of Nigeria clearly illustrates the resource curse phenomenon and the challenges of sound fiscal policies in managing oil resources. Even though it is the region’s largest oil producer, 70% of its population lives on less than one dollar per day McDougal (2007, p. 806). When governments in the region comes into sudden wealth from oil, evidence shows that

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the first priority is often to strengthen the state’s capacity, and the leader’s desire to prolong their stay in power. There is a clear correlation between oil rents and military expenditures: current and capital expenditures on the armed forces. It is no coincidence that Nigeria and Angola, two of the biggest oil producers in the subregion, also spend the most on their militaries. Even though its war ended in 2002, Angola’s annual military expenditure in 2014 was $6.842 billion. The latest figure shows a slight decrease, to $3.063 billion in 2017. In the meantime, Nigeria’s was $2.358 billion in 2017. The ongoing security situation in the Sahel region, especially the threat posed by Boko Haram in the Niger Basin also saw higher military expenditures for countries in that part of the region. This is borne out by the SIPRI data on military expenditure, which shows that oil-producing countries in the region, and indeed worldwide tend to have an obsession with large and expensive militaries. In 2017 the government spent around $1.7 billion on the military. Angola was the highest spender in sub-Saharan Africa, with over $10 billion spent on its security forces. The ramped-up military expenditure came at a time when its longrunning civil war between the government and UNITA had concluded. With the impact of low oil prices on Angola’s economy, military spending fell to 3.7 billion dollars between 2014 and 2017 (Tian et al. 2018, p. 7) (Figs. 4.3 and 4.4). In addition to large standing armies, West Africa’s oil-producing countries also tend to have an inclination for megaprojects. When oil prices are high, government revenues skyrocket. In Angola the GDP per capita soared from $711 in 2002 to $4804 in 2013, with government revenue skyrocketing in the same period. With more money to spend producer governments often opt for large or megaprojects as the preferred way to spur growth. According to a former senior government representative, the Angolan authorities have been overambitious in their infrastructure planning, not taking into consideration issues such as feasibility, absorption capacity, or corruption risks (Interviewed by author, Washington, DC). Angola’s growth is driven by high oil prices, and increased oil production had a dramatic impact on a country recovering from decades of war. The country exported $35.5 billion to world markets in 2017, most of which was from its crude oil sales (Export.gov 2018). In addition to the oil proceeds, the country also had access to a large pool of credit lines extended by China. As a result, as the UK-based think tank Chatham House put it, “Angola found itself in the rare situation of not having to worry unduly about how it would finance its infrastructure plans” (Jensen 2018, p. 5).

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Fig. 4.3 Military expenditure (% of GDP) (Source Stockholm International Peace Research Institute [SIPRI], Yearbook: Armaments, Disarmament and International Security, ID MS.MILXPND.CN. License: Use and distribution of these data are subject to Stockholm International Peace Research Institute [SIPRI] terms and condition)

Angola’s energy sector infrastructural project focused on a handful of very large projects. The same phenomenon is noticeable in Nigeria. The region’s largest producer is using some of its oil proceeds to build at least five new cities across the country. The modern city in the North West Quadrant of the Lekki Free Zone in Lagos is projected to cost $249 million. Its Centenary City in Abuja will cost an estimated $18.7 billion (Kazeem 2018). This is not the country’s first megaproject. In the 1970s, partly buoyed by a sharp rise in oil prices precipitated by the energy crisis, the government of Nigeria decided it was time to relocate the capital city from Lagos.

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Fig. 4.4 Military expenditure (% of GDP) in 1999 (Source Stockholm International Peace Research Institute [SIPRI], Yearbook: Armaments, Disarmament and International Security, ID MS.MILXPND.CN. License: Use and distribution of these data are subject to Stockholm International Peace Research Institute [SIPRI] terms and condition)

In the summer of 1975, a panel appointed by the head of state, General Murtala R. Mohammed, recommended moving the capital to the center of the country, a place called Abuja. The capital was finally moved in 1991, more than 20 years after the idea was first mooted (Table 4.5). The Nigerian federal government is building a 1400-kilometer LagosCalabar railway to connect Lagos in the West to Port Harcourt, Uyo, Aba, and Calabar in the East. The $11 billion project is expected to boost trade and facilitate the movement of goods and services in the region. It is estimated to cost $11 billion. A similar expensive infrastructural project

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Table 4.5 Oil-fueled mega projects of West Africa Country

Project/year

Estimated cost (US dollars)

Sector

Nigeria

Relocation of federal capital from Lagos to Abuja in 1991 Lagos-Calabar Railway

15–40 billion

Administration

Governance

11 billion

Transportation

Infrastructure

5.4 billion

Energy

Luanda airport Constructing a new administrative capital, Oyala

3.8 billion 8 billion

Transportation Administration

New administrative capital, Diamniadio. situated 30 km east of Dakar,

2 billion

Administration

New international airport

575 million

Transportation

Hope to employ 8000 Infrastructure A new Congress building, presidential villas, a golf course, a university, and a luxury hotel A university, affordable housing, entertainment facilities, industrial parks, all linked to Dakar Linked by newly constructed motorways

Angola

Equatorial Guinea

Senegal

Source Author

is underway in Equatorial Guinea. Having spent millions of dollars building or upgrading government administrative buildings in both the island capital, Malabo, and the largest city, Bata, the government is now constructing a brand-new administrative capital, Oyala, officially known as Ciudad de la Paz (city of peace). The new administrative city will feature a new congress building, a number of presidential villas, a golf course, a university, and a luxury hotel. The city is expected to cost about $8 billion. This is a relatively small slice of the overall oil revenue, given that the government spends an average of around $5.2 billion annually. Between

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2009 and 2013 the government spent more than $20 billion on capital investments alone (Human Rights Watch 2017). There is also evidence to show that corruption is often rife in oilproducing countries in the region, an issue of great contention among community advocates. Some of the funds are misused, mainly through wastage, misappropriation, and bribery. Between 1997 and 2002 an estimated $4.2 billion in oil revenues were stolen from Angola’s coffers (Bekele 2017). In Nigeria an estimated $400 billion earned from crude oil sales since the 1970s was stolen by successive governments. In the 2018 Transparency International’s Corruption Perception Index all of West Africa’s oil-producing countries fared poorly. Angola was ranked 165 of 180, with a score of 19 out of 100. Nigeria fared even worse: 144 of 180, scoring 27/100. Equatorial Guinea ranked an abysmal 172 out of 180, with a lowly 16 out of 100 score (Transparency International 2018). The country loses an estimated $8.2 billion a year to “Bunkering” (illicit siphoning of oil by organized gangs). Politicians, state officials, and the military have all been implicated in this well-organized grand larceny (Clarke 2008, p. 98). In Ogoniland, Shell has benefited more than 650 MMBLS worth more than $5 billion over 30 years (Clarke 2008, p. 91). In a bid to minimize corruption, Ghanaian Parliament passed Ghana’s Revenue Management Act. The law outlines clear mechanisms for collecting and distributing petroleum revenue, which contributed to 4% of the government’s total capital spending in 2011. The funds went mainly to investments in road infrastructure, but also to building the capacity of the oil and gas sector, repaying loans and strengthening agriculture, most notably for fertilizer subsidies. Between 2009 and 2013 Equatorial Guinea took an average of $4 billion per year in resource revenue and $400 million in tax revenue and other income and spent an average of around $5.2 billion annually. There are signs that some of the oil wealth has trickled down to the population. Infrastructurally, Malabo is one of the most advanced on the continent. The University of Equatorial Guinea in Malabo appeared well maintained. The lawns were green and well-manicured. The furniture was standard and the classrooms were clean, well lit, and nicely furnished. The main boulevards leading to the main airport were well maintained. The airport was undergoing a massive expansion in 2016. But beyond this notable first-impression evidence of progress and development, there are signs the oil wealth is not trickling down fast enough. The side roads were in a dilapidated state. It is a police state

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where citizens are very careful with what they say or do. At my hotel, which was just opposite the presidential estate in Malabo, I realized the authorities had a firewall on the hotel computers. I could not find any negative information on the corruption scandals involving the first family’s misuse of the oil proceeds when I searched the web from the hotel. “This information is not available” and “you don’t have permission to view this page” were the constant refrains. The local beach was virtually empty. There is a climate of fear, with citizens conditioned to believe that they are lucky to live in a stable country. This personal experience supports the thesis propounded by Klare (2001) that oil undermines human security. As oil-producing governments reinforce state security across the region, they are doing so at the expense of human security. In the oil-producing parts of the region, human security has been adversely affected as people’s sources of economic and physical well-being have been disrupted. In spite of its massive oil wealth, the government of oil-rich Equatorial Guinea spent a mere 1.8% of its gross domestic product on health care (World Bank 2010). The lack of physical security has also negatively impacted their economic security. The life expectancy of the average Equatorial Guinean is 62.75 years, while in Mauritius, the island state with no oil, it stands at an impressive 74.71 years. The government of Nigeria spends an average of 5.95% of its expenditure on health (Frynas 2004, p. 543; UNDP Human Development Report 2013). A 2002 UN Office of West Africa Mission review highlighted the multicausality and protracted nature of the human security challenges facing the region: The region continues to face numerous challenges to peace in the form of political instability, poor governance, predatory security services, mismanaged natural resources, poverty and unemployment, and unconstitutional changes of government—all of which contribute to the region’s volatility.

These negative developments at the human security level also have a gendered dimension. Women are often the most economically threatened social group in an unregulated oil sector. They face structural and cultural disadvantages that oil companies do very little to redress. The end result is that female employment in the region’s oil sector stands at less than 2% with most of the formal oil jobs going primarily to men (Ikelegbe 2005; Eftimie et al. 2009). With the exception of Liberia, all of the heads of the different national oil companies in the subregion are headed by men.

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Conclusion Oil proceeds are increasingly becoming the foundation of West Africa’s economy. From Senegal to Ghana to Angola, a new oil-based fiscal regime has emerged. Oil accounts for 95% of Nigeria’s government revenue; 85% of Angola’s; 81% of Equatorial Guinea’s; and 60% of Gabon’s (McDougal 2009, p. 807). These revenue streams from oil-related activities are critical for economic survival, regime stability, international interests and commercial futures (Clarke 2008, p. 72). Increased oil revenues enable producer countries to allocate additional resources for infrastructure and social services including construction of roads, hospitals, and schools. As demonstrated, however, the flow of oil revenues has been problematic. The more revenue governments obtain from oil, the more funds they allocate to projects that do not necessarily improve the lives of their citizens. The end result is a series of megaprojects—from new cities to unsustainably large railway systems—that have emerged in different parts of the subregion that are becoming a drain on the economy. With these huge projects and a state-centric approach to resource management comes a lack of transparency and accountability. With very little oversight, the financial largesse increases wastage and malfeasance. Nigeria has spent millions of dollars to enhance its influence in the subregion and beyond. Its forays into Sierra Leone, Liberia, and Guinea-Bissau through the ECOMOG in the 1990s were made possible by its oil wealth. Evidence abounds, therefore, to show that oil does not always translate to improved human security for the citizens in the subregion. Instead, the noticeable phenomenon is state security comes at the expense of human security. What are the implications for such an approach affected communities in the region? The next chapter will explore the human dimensions of a people-versus-profits scenario, outlining the different ways that oil impacts communities.

References African Business Magazine. 2019. Senegal Eyes Infrastructure and Oil Boost After Sall Victory. Available at https://africanbusinessmagazine.com/region/ west-africa/senegal-eyes-infrastructure-and-oil-boost-after-sall-victory/. African Development Report. 2005. Public Sector Management in Africa. Oxford, UK: Oxford University Press.

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African Oil and Power. 2019. Benin’s National Assembly Adopts New Petroleum Code. Available at https://centurionlg.com/2019/01/31/benins-nationalassembly-adopts-new-petroleum-code/. Accessed October 12, 2019. Amaded, Kimberly. 2019. Oil Reserves, Their Categories, and the World’s Largest. Available at http://www.sonangol.co.ao/English/AboutSonangol EP/Pages/About-Sonangol-EP.aspx. Ball, Jeffrey. 2005. Angola Possesses a Prize as Exxon, Rivals Stalk Oil. Wall Street Journal, December 5. Bekele, Daniel. 2017. Africa’s Natural Resources: From Curse to a Blessing. Available at https://www.hrw.org/news/2017/04/21/africas-naturalresources-curse-blessing. Accessed August 5, 2019. Belfrage, Erik. 2017. The Oil and Gas Sector in West Africa: Introduction and Small Insights. Stockholm: Business Sweden, The Swedish Trade and Invest Council. Brown, David. 2013. Africa’s Booming Oil and Natural Gas Exploration and Production: National Security Implications for the United States and China. Leavenworth: US Army College Press. Canadian Overseas Petroleum Limited. 2016. Prospectus. Available at http:// www.canoverseas.com/. Accessed May 2, 2018. Clarke, Duncan. 2008. Crude Continent: The Struggle for Africa’s Oil Prize. Glasgow: Profile Books. Colon, Maite C., and Elba T. Gerena. 2014. Oil and Gas Regulation in Equatorial Guinea: Overview, Centurion LLP. Available at https://content.next. westlaw.com/Document/I464ce394ca1311e398db8b09b4f043e0/View/ FullText.html?contextData=(sc.Default)&transitionType=Default&firstPage= true&bhcp=1. Diamond, L., & J. Mosbacher. 2013. Petroleum to the People: Africa’s Coming Resource Curse—And How to Avoid It. Foreign Affairs, 92, 5, September/October. Available at http://www.foreignaffairs.com/articles/139647/ larry-diamond-and-jack-mosbacher/petroleum-to-the-people. Accessed August 15, 2018. Dovi, Efam. 2013. Ghana’s ‘New Path’ for Handling Oil Revenue. Available at https://www.un.org/africarenewal/magazine/january-2013/ghana%E2% 80%99s-%E2%80%98new-path%E2%80%99-handling-oil-revenue. Accessed July 29, 2019. Eftimie, Adriana, Katherine Heller, and John Strongman, 2009. Gender Dimensions of the Extractive Industries. Extractive Industries and Development Series #8. Washington, DC: World Bank. Available at https://www.worldbank.org. Export.gov. 2018. Angola Market Overview. Available at https://www.export. gov/apex/article2?id=Angola-Market-Overview. Equatorial Oil. 2006. Hydrocarbon Law of the Republic of Equatorial Guinea. Malabo, Equatorial Guinea: Government publications.

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Extractive Industries Transparency Initiative (EITI). Available at https://eiti. org/cote-divoire. Accessed August 7, 2019. Frynas, Jedrezej E. 2004. The Oil Boom in Equatorial Guinea. African Affairs 103 (413): 527–546. Ghana Ministry of Finance. 2018. Annual Report on the Petroleum Funds Presented to Parliament on Wednesday, 15th November 2018 by Ken OforiAtta. Minister for Finance. Available at http://www.sonangol.co.ao/English/ AboutSonangolEP/Pages/About-Sonangol-EP.aspx. Accessed August 15, 2019. Graeber, Daniel J. 2017. A Lot More Oil Offshore Sierra Leone Than Early Estimates Showed. Available at https://www.upi.com/Energy-News/2017/ 12/21/A-lot-more-oil-offshore-Sierra-Leone-than-early-estimates-showed/ 9311513853122/. Accessed August 12, 2019. Government of Sierra Leone Petroleum Exploration and Production Act. 2011. Available at Sierra-Leone.org. Harshe, Rajen. 2003. Politics of Giant Oil Firms: Consequences for Human Rights in Africa. Economic and Political Weekly 38 (2, January 11–17): 113– 117. Human Rights Watch. 2017. “Manna from Heaven”? How Health and Education Pay the Price for Self Dealing in Equatorial Guinea. Ikelegbe, Augustine. 2005. Engendering Civil Society: Oil, Women Groups and Resource Conflicts in the Niger Delta Region of Nigeria. The Journal of Modern African Studies 43 (2). International Business Publications. 2013. Mineral Mining Sector Investment and Business Guide, Strategic Information and Regulations. Washington, DC: International Business Publications. Inflation Data. 2019. Historical Crude Oil Prices. Available at https:// inflationdata.com/articles/inflation-adjusted-prices/historical-crude-oilprices-table/. Jensen, Søren Kir. 2018. Angola’s Infrastructure Ambitions Through Booms and Busts, Policy, Governance and Reform. Africa Programme, Chatham House Research Paper. Kaldor, Mary, Terry Lynn Karl, and Yahia Sahid. 2007. Oil Wars. London: Pluto Press. Kazeem, Yomi. 2018. African Countries Are in a Race to Build New BillionDollar Cities for the 21st Century. Africa Quartz. Available at https://qz. com/africa/1461626/eko-atlantic-diomniadio-tatu-africas-new-billion-dollarcities/. Klare, Michael. 2001. Resource Wars: The New Landscape of Global Conflict. New York: First Owl Books.

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Mazaheri, Nimah. 2014. Oil Wealth, Colonial Legacies, and the Challenges of Economic Liberalization. Political Research Quarterly 67 (4): 769–782 (Sage). McDougal, Serie. 2007. The Crude Intentions: The Pursuit of African Fuel Minerals and the Need for an Afrocentric Foreign Policy. McDougal, Serie. 2009. The Crude Intentions: The Pursuit of African Fuel Minerals and the Need for an Afrocentric Foreign Policy. Journal of Black Studies 39 (5): 803–813. https://doi.org/10.1177/0021934707302645. National Oil Company of Liberia. 2019. Liberia’s Oil and Gas History. Available at http://www.nocal.com.lr/about-nocal/history. Accessed March 12, 2019. Obeng-Odoom, Franklyn. 2016. Oil in the West African Transform Margin: Dangers and Possibilities. International Critical Thought 6 (1): 101–118. Organization of Petroleum Exporting Countries. 2019. Gabon, Facts and Figures. Available at https://www.opec.org/opec_web/en/about_us/3520. htm. Accessed 13 July 2019. Oil Reserves. Available at https://investinganswers.com/dictionary/o/oilreserves. Accessed July 24, 2019. OpenOil. 2012. Oil Contracts: How to Read and Understand Them. Creative Commons License. London: United Kingdom Roberts, Adam, 2006. Oryx Petroleum. 2018. Annual Information Form. Available at www. oryxpetroleum.org. Palazuelos, Enrique. 2012. Current Oil (Dis)order: Players, Scenarios, and Mechanisms. Review of International Studies 38 (2, April): 301–319. Propublica. 2012. Follow the Money: Payment Trail Reveals Challenges of Ridding Liberia of Corruption. Radon, Jenik. 2013. The ABCs of Petroleum Contracts: License-Concession Agreements, Joint Ventures, and Production-sharing Agreements. Available at https://www.gmec-ee.com/wp-content/uploads/2013/08/The-ABCsof-Petroleum-Contracts....pdf. Accessed April 11, 2020. Sierra Leone Extractive Industries Transparency Initiative. 2012. Second Reconciliation Report, September. Tian, Nan, Pieter Wezeman, and Youngju Yun. 2018. Military Expenditure Transparency in Sub-Saharan Africa. SIPRI Policy Paper No. 48. Transparency International. 2018. Available at https://www.transparency.org/ country/GNQ. Accessed August 8, 2019. United Nations Development Programme (UNDP). 2013. Human Development Report. Available at hdr.undp.org. United Nations Development Programme (UNDP). 2015 Human Development Report. Available at hdr.undp.org. United States Geological Survey. 2010. Assessment of Undiscovered Oil and Gas Resources of Four West Africa Geologic Provinces. Available at USGS.gov.

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US State Department. 2019. Gabon—Oil and Gas. Available at https://www. export.gov/article?id=Gabon-Petroleum-and-Crude-Production. Accessed December 8, 2019. West Africa Oil Watch. 2014. Sierra Leone Country Brief: The Politics and Fiscal Dynamics of Sierra Leone’s Nascent Oil Industry, Annual Country Brief. Wiorkowski, John J. 1981. Estimating Volumes of Remaining Fossil Fuel Resources: A Critical Review. Journal of the American Statistical Association 76 (375): 534–548 (Taylor & Francis). World Bank. 2010. Equatorial Guinea: Public Expenditure Review (PER), 91– 92, January. World Bank. 2011. The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium. Available at https://blogs.worldbank. org/opendata/changing-wealth-nations-measuring-sustainable-developmentnew-millennium-released. Accessed November 2018. World Bank. 2019. The World Bank in Africa. Available at https://www. worldbank.org/en/region/afr/overview. Accessed May 30, 2019. World Energy Council. 2017. World Energy Resources. https://www. worldenergy.org/data/resources/region/africa/oil/. Accessed July 29, 2019.

CHAPTER 5

Oil and Community Agitation

Nature and Sources of Grievances Oil and grievances are made for each other. Commercial oil drilling in West Africa has generated a complex web of grievances at the community level. Rather than immunizing the region against social and political strife, the foreign direct investments and ensuing oil revenue have succeeded in generating a complex web of grievances at various levels of the societies. The upstream and downstream operations of a relatively reclusive but highly profitable industry often entail a potpourri of arrangements (written and unstated) with a bewildering array of actors and stakeholders including investors, employees, customers, consumers, governments, service providers of all sorts, host communities, and in some cases even commercial rivals. Navigating and managing the needs and expectations of this plethora of actors, whose interests are sometimes diametrically opposed to one another’s, provides the perfect conditions under which grievances fester. Perhaps nowhere is this drill-and-grievance phenomenon more manifest than at the oil-producing community level. There the asymmetrical relations between a rapacious and opaque industry and often socioeconomically neglected but resource-rich communities collide head-on with severe consequences for society at large (Kanyako 2015a, b). To understand community responses, both peaceful and in some cases violent, a discussion of the factors that gives rise to these various agitational methods is in order. As with all issues dealing with oil and its

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extraction in West Africa, the root causes of disempowerment and alienation of local communities are complex, varied, and multifaceted. As such the impact of oil’s extraction and the responses of the varied communities and wide-ranging, partly dictated by history, geography, and the political and security situation in the country. For example the impact of oil spills on land such as the Niger Delta is more immediately felt and more impactful than a similar spill out in the open ocean, as is the case with the ultra-deep waters of Angola. What is not in contention however is the fact that the ongoing extraction of oil has had a debilitating effect on the producer communities. The other issue that needs to be outlined from the outset is that community grievances against the extractive in general is partly tied to perception—one of neglect shaped by geographical constraints. According to Ukeje (2001), oil-producing communities such as the Niger Delta live in what he referred to as a “geographic marginality,” challenging terrain in the form of thick mangrove swamps that is both difficult to access and navigate, usually by boats (p. 21). To further compound the problem, because these geographical areas tend to be far removed from the center of power often exacerbates the problem of neglect and sense of marginalization faced by the communities. In spite of its economic and geostrategic significance oil producing communities they often suffer from neglect and lack of development. To make matters worse these regions’ perhaps because of their economic significance, suffers from heavy securitization. The highhanded approach of governments to restive communities in oilproducing zones such as the Niger Delta often exacerbates the tensions. In addition there are the constraints of ever-constricting geographical space that the oil communities have to deal with. The demarcation of no-go areas designated by the oil companies is also a source of ire for oil communities. On a visit to one such oil community in the Niger Delta, the guide pointed out various no-go areas for the community, including in the vicinity of pipelines. The challenges of oil communities are not just confined to the Niger delta, but could be found right along the West African coast. The entire West Coast of sub Saharan Africa (host to one-third of its population and which produces 56% of its GDP through economic activities such as fishing and the extractive industry) is under intense ecological pressure. The 6500 km from Mauritania to Cameroon, where most of the new oil finds are located, are experiencing massive erosions due to global warming and rising sea levels. The highly regarded environmental group

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Earth.org put it more bluntly when it carried a headline that simply stated that “West Africa is sinking.” Ghana, Togo, Sierra Leone, Liberia, Cote d’Ivoire to name a few have all experienced sea level rises, that have forced some coastal communities to flee for higher ground. In concrete financial terms, Ahedor (2019) summarized the challenges facing governments in the neighborhood thus: Damages from the sea-level rise cost the government of Cote d’Ivoire nearly $2 billion — 4.9% of its GDP, while it cost the Benin government $229 million — 2.5% of the country’s GDP.

The World Bank (2019, p. 5) came to the same conclusion: West Africa’s coastal zones, home to valuable wetlands, fisheries, oil, and gas reserves, and high tourism potential are literally disappearing in some areas, with disastrous, wide-ranging consequences for the local communities. In West Africa, coastal degradation takes an important toll on people’s health and quality of life. From Mauritania to Gabon, millions of people on the coast suffer from severe erosion, flooding and pollution. These take away lands, homes and lives. Climate change and variability, characterized by rising sea levels and more frequent and violent storms, are exacerbating their predicaments.

According to the report, flooding, erosion, and pollution cause an estimated 13,000 deaths a year in Benin, Togo, Cote d’Ivoire, and Senegal (Croitoru et al. 2019, p. 10). As a result of these complex factors, the grievances that oil generates and the consequent strategies utilized by local communities should be understood in the context of the complex political economy of the region. West Africa’s petro-capitalism is emerging at a time when the region is experiencing a relative decline in violent conflicts and social unrest. Both Sierra Leone and Liberia, two countries that are synonymous with the region’s destructive wars of the 1990s, have made notable strides in consolidating their peace (United Nations Office for West Africa 2002). The agitations reflect the intractable developmental challenges faced by communities exposed to the risks from the oil drilling activities. Consolidating peace in the region would require developing a wider constituency as well as comprehensive modes of citizen engagement both vertically and horizontally and across multiple levels of the West African region.

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As a prelude to understanding the broad range of responses outlined here, it must also be pointed out that oil extraction is a complicated process that carries a wide range of costs and benefits for communities. This mix of impacts and benefits occurs at multiple scales and in complex ways. The costs borne by an oil society could be broadly divided into tangible and nontangible impacts. The tangible costs (and benefits) such as oil spills, physical damage to land, and polluted waters from energy waste and resource projects, or the taking and use of land for various oil-related activities, are easily quantifiable (Barrera-Hernandez et al. 2016, p. 8). It is these tangible public economic benefits of natural resources projects that usually attract the most attention. Other impacts, however, especially those around identity and respect, are less tangible, and are nonquantifiable, but they are just as important to a people’s sense of inclusion, their representation, and recognition of their human rights. One of the fiercest criticisms leveled at the oil-producing subregional governments, and by extension the oil companies, has in recent years been its lack of transparency in revenue management. Both oil and its revenue are treated as state secrets. Often the allocation and distribution of the proceeds are known to only a few high-ranking officials in the producer governments. The unequal distribution of the proceeds, often exacerbated by governmental incompetence, is at the root of community anger, which has implications for peace and security (Barrera-Hernandez et al. 2016, p. 12). A second, closely related problem is the maldistribution of the proceeds. Most countries have a revenue-distribution formula. In what Barrera-Hernandez described as the center–periphery imbalance that economically marginalizes the hinterlands where most energy projects often take place. Skewed distributions remain pressing issues in the face of significant disadvantage. The concept of basic human needs is key to understanding the sources of people’s grievances over the debilitating effects of oil activities. There are two main categories of grievances that local communities tend to harbor against the producer governments and the oil companies in particular. These could be classified as grievances around survival needs and those centered on identity needs. Survival needs are tangible and are largely about the socioeconomic impacts of oil extraction: environmental degradation, loss of sources of income, health risks, and lack of proper compensation over damages. Identity needs, on the other hand, revolve around

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recognition, identity, and respect, often manifesting in the loss of authority and control. These needs are less tangible but just as important to people’s sense of worth. Given that members of the affected communities are not a monolithic unit, the effects of oil exploration affect different members of the community differently. The key stakeholders at the community level that are the focus of this chapter include the youth, women, chiefs and traditional leaders, and educated intelligentsia. While all of these are collectively affected by the wider impact of oil activities in their communities, they have their own strategies for dealing with the challenges posed by oil, not least because of the subtle differences in the ways they are impacted by the industry in the first place. Regardless of social group, however, one thing is constant: oil economies tend to supersize people’s expectations. These high and sometimes unrealistic expectations emanate from the mistaken belief that oil has magical powers, capable of lifting every member of a community out of grinding poverty. When the expectations are unmet, conflict and violence are often the end result. Abundant evidence in the subregion shows that unrealized expectations can undermine peace and stability. Some of the grievances are driven by the clash between expectations and the harsh reality.

Survival Needs The ownership question: One source of ire is the fact that oil by law belongs to the state, not to the people. The hydrocarbon laws of Equatorial Guinea for example are very clear and emphatic on the ownership question: Article 1. All Hydrocarbon reservoirs that exist in the surface and subsoil areas of Equatorial Guinea, including its inland waters, territorial waters, exclusive economic zone and Continental Shelf are the exclusive property of the State and therefore public domain goods.

Ghana takes it one step further. Its 1992 constitution vests power for the ownership of “all natural resources, including oil and gas” in the territory of Ghana in the President of the country. He is required by law to manage it on behalf of Ghanaians. As the custodian on behalf of its people, the state determines how the resource is managed, from extraction and the management of proceeds to the distribution of its rewards. The central government holds all the power and thereby disempowering the local

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chiefs, who are the customary custodians of these resources. This power imbalance is sometimes a source of conflict. In an email message a highly educated local chief1 from one of the most resource-rich districts in Sierra Leone explained the ownership problems and opportunities: There are two levels of ownership claims to contend with, both of which involve chieftains as customary rulers of their chiefdoms. The level between the chiefdom and the state is, on the face of things, governed by statutes passed in parliament, which vests ownership of all minerals (usually subsurface) in the government in Freetown. These statutes have not been challenged since independence in 1962, perhaps because of the significant imbalance in the level of sophistication between the leaders of the central government and the chiefdoms. The chief said this is problematic and flawed largely because these chiefdoms never ceded those rights when they signed friendship treaties with the British colonial authorities, which made Sierra Leone a protectorate and eventually a country. And those treaties have never been revisited in any serious way nor rescinded since the country gained independence.

Beyond the issue of subsurface rights, current law acknowledges ownership interest in the land surface, which must be breached to access the minerals, used as staging areas for the mining company’s plant and equipment, as well as ancillary uses, such as for building quarters for their workers or establishing lakes and dams. These surface interests are dealt with by providing that surface rent be paid (per acre). But even there, provisions currently exist for the relevant central government minister to set the surface rent if there is no agreement between the mining company and the chiefdom’s landowner. Obviously, there is wide latitude for abuse of discretion under such an arrangement, especially if a minister can negotiate his or her own private benefit with the company to set an arbitrarily low rent. The second level of ownership interest is between current users of the lands in question and the chieftaincy. This is governed by customary law, which varies from chiefdom to chiefdom and certainly across regions. In the Kailahun area in Sierra Leone, there is this idea of landowning families, mainly arising from the fact that some (in fact most) chiefdoms have more than one family with rights to paramount chieftaincy. In Luawa, for instance, the Ngobehs, the Fabundehs, and the Kailondo Banyas all have landowning family rights in different areas of the chiefdom. Some have even taken this landowning family rights issue to families of historic

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section chiefs. The basic point is that there were recognized rulers of various areas whose descendants are recognized as putative permanent owners of those lands under customary law. These original rulers were usually Koh Gubeisia, who captured and ruled those lands and were recognized as owners who would mobilize and fight off any external aggressors who attacked even the remotest parts of those lands. Beyond those landowning families, many people have come to be given usufruct rights to use designated areas for farming and the like. These usufruct rights are known as mehlimei and are usually given under the authority of chiefs with landowning families, and with certain conditions. Key among those conditions is the common saying “Toohein ay taa lohla nyani” (an agricultural plantation cannot deter the development of a town). This means that the chiefs have the right to order the removal of tree crops, for instance, without further compensation to the person with mehlimei rights when they need that land for development. Other rights involved in mehlimei include the understanding that the land user can transfer those rights to his or her immediate relatives. However, he cannot transfer it to others, except under the authority of relevant chiefs. Additionally, mehlimei rights do not usually entitle one to natural resources found on the land, which are recognized to belong to chiefs, along with landowning families (who are often synonymous groups). Of course, specific arrangements can be made to give persons with mehlimei rights, access to those natural resources, on a case by case basis. A slightly different set of rules, of course, applies in built-up areas of towns and villages. There, because it is impractical to expect people who have built houses on lands to be dispossessed of those lands without fair compensation, once land has been given to someone (under the authority of relevant chiefs and landowning as appropriate), that person effectively becomes the new owner of the land (author email interview, September 7, 20192 ). On how to Resolve the Ownership Question, the chief (a retired engineer) in Sierra Leone gave a response that was quite instructive. He had this to say: There may … come a time when chiefdoms could challenge this arrangement (government ownership over natural resources) in, say, an international court of human rights (such as the ECOWAS court). “Of course, that may be a nuclear option, as it could unravel a lot of existing structures and have even unforeseen collateral damage if the chiefdoms prevail. And if

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the stakes are high enough (read: if there is a lot of money to be had), there will be no shortage of competent lawyers who would take on such a case for a commission. Again, these are issues that we all hope can be addressed by political compromise, rather than enriching human rights lawyers. Realistically, it would be better to resolve such issues through political compromise, in which there would be fair sharing of ownership interests and proceeds, for the benefit of both the chiefdom where the wealth is found and for Sierra Leone at large”. (email exchange with author, September 7, 2019)

The rights of communities and their members in an oil economy, as well as the responsibilities of multinational corporations, are often enshrined in a country’s hydrocarbon laws. In Ghana local content is the main channel by which states aim to diversify the oil proceeds and create a multiplier effect. Often, as part of the bidding process companies have to present environmental and disaster mitigation plans that explicitly lay out the various ways they will safeguard the environment and the welfare of the people. This is often spelled out in a company’s corporate social responsibility statement. Employment In addition to the ownership question, and the confusion often inherent in a country’s hydrocarbon laws, another major source of grievance for the locals is employment, or the lack thereof. One of the key characteristics of oil extraction is that it is a capital-intensive, technologydriven industry. As a result of its heavy reliance on machinery and computer technology, it is a high-paying but low-employment sector. It is a classic example of an enclave economy that does not directly employ many people, especially locals, in its high-paying upstream activities. This is often a major source of grievance at the community level. For example, Angola, Africa’s second-largest exporter, directly employs only about 10,000 Angolans, which is 0.2% of its active population (Kaldor et al. 2007, p. 108). To put it into perspective, the country’s fishing industry, worth $178.7 million or (about 3% of its GDP), directly employed an estimated 335,000 Angolans in 2002 in fishing and fishing-related activities, including aquaculture (FAO 2018). By 2017, the production volume for the fisheries sector had increased to more than 532 thousand (US State Department 2019).

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Local employment is one of the thorniest issues and also one of the most explosive in oil-producing regions in West Africa. In several focus group sessions conducted for this research, it was almost always on the top of the agenda for various social groups, especially among youths. One point that needs to be stated from the outset is that the issue of low employability is not confined just to West Africa. With its technologyheavy focus, it is a common trend in the global oil industry. Tullow, Ghana’s leading oil producer, employed fewer than 200 Ghanaians in the first five years of its upstream operations in the country (Tullow 2012). Most of the other positions are made available through subsidiaries and other contractors. The geographical locations of large-scale oil finds often have a magnetic pull on a society, which, when poorly managed, creates social problems of all sorts for the oil communities. People gravitate toward the oil fields in the hope of finding decent jobs directly with the oil companies or securing jobs indirectly through the various cottage industries that often emerge around oil sites. This is even more acute in West Africa, which is marked by the “youth bulge” phenomenon and high rates of unemployment. Many of those who flock to the oil-producing areas are young people, including young women, some of whom may or not have the requisite experience or skills to work in the industry itself. West Africa is seriously lacking in some of the specialist skills that are in greatest demand. Petroleum engineers of all sorts are among the highestpaid professionals in the field, with an annual mean salary of $156,990 as of 2015, according to the Bureau of Labor and Statistics (BLS 2015). When one adds to this the hazard pay and other incentives for working in a potentially dangerous zone such as the Niger Delta, the average midranking engineer could easy make around $200,000 a year. The grievances that locals have around jobs are of twofold: the highpaying or decent jobs often found in the upstream phase of the process are few and far between. The few that do exist often tend to go to foreigners. The narrative is that often the young graduates, those who are likely to gravitate toward oil production areas in search of level-entry jobs, often lack the requisite skill sets, experience, or networking skills to break into the highly competitive industry. On the part of the oil companies, an oil industry executive in a discussion with the author, outlined the challenges with hiring locals are often more complex than they are:

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Our work is time bound. Once that contract is signed the clock starts to tick. Every day that we are not drilling, the company is losing money. So the quicker we can get workers to the site the better. This means therefore that we have to source workers who already have the requite skills and experience to hit the ground running, and in the medium or long term search for the best people among the locals. Unfortunately, there is no easy fix to this challenge, especially in a high pressure, high intensity, and fast moving business. (interview by author, Malabo, Equatorial Guinea, August 12, 20173 )

As a result, the standard practice in the industry is for oil companies and foreign companies to design various time-bound goals with regard to local employment often falling into three main time horizons: • short term: staff the operations quickly to get the business up and running • medium term: hire a combination of seasoned staff, with emphasis on a good mix of foreign and local employment • long term: promote local staff from within and provide training opportunities for locals to gain entry-level and managerial experience in the industry. The local content policy mandates operators to prioritize the hiring of locals in all the value chain of the industry, including in technical positions. It also warranted companies to provide training and educational opportunities to the locals to enable them to rise through the ranks. Some of this such as in Ghana, called for a gradual scaling up of such local capacity building, from at least 50–100% in the next five years. Environmental Degradation The environmental effects of oil extraction, especially on coastal communities, are another major source of grievance. West Africa’s coastal communities are under intense pressure from natural, economic, and social causes. Oil’s incursion into the region’s fragile biodiversity exacerbates these environmental effects. The coastal wetlands of the Gulf of Guinea, West Africa’s premier oil zone, support a thriving ecotourism industry and an economically viable fishing industry worth some $800 million annually. In spite of being one of the most important industries (600,000 people in

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Senegal alone), the region loses an estimated $1.5 billion a year to illegal fishing (Economist 2012). Because oil drilling carries enormous environmental risks, the threats posed by the industry to the region’s coastal region (where most of the richest oil finds are located) comes in various forms. The coastal region is extremely vulnerable to the damaging impacts of oil spills. According to a report by the United Nation Environment Programme (2002), “Every year some 400–500 million tons of crude oil and refined products, from notably Nigeria, Gabon, Equatorial Guinea, and Angola, transit the East Atlantic sea route along the West African coast.” Given the nature of maritime boundaries and proximity of countries to one another, an oil spill in one coastal country can quickly spread into the territorial waters of neighboring countries in a short period of time. Oil spills, a reference to the release of a liquid petroleum hydrocarbon into the environment, on both land and marine areas due to human activity (deliberate or accidental), has been a constant source of ire for oilproducing communities. In 2000, Shell officially reported a total of 340 oil spills, accounting for 30,751 barrels of oil spilled in the year. In 2003 there were 221 incidents of oil spill associated with Shell facilities in the course of which a total of some 9900 barrels of oil were spilled (SPDC 2004). According to Lean (1995) a staggering 26 of the 67 world oil spills officially acknowledged by Shell between 1982 and 1992 took place in the delta region (Lean 1995, quoted in Uweje). Spills often have direct bearing on economic well-being, especially on riverine communities that depend on the bodies of water (creeks, lagoons, lakes, and the ocean, where most of the oil activities take place) for their livelihood. Major oil spills have caused a decline in local fishing, irreversibly damaging the ecosystem and soil composition (Oluwuyi 2012, p. 4). Oil spills are harmful to the environment, posing grave threats to freshwater and the marine environment, upon which locals depend for their sustenance. Pollution, Ndubueze-Ogaraku et al. (2016, p. 56), points out “kills shellfish and their food source and damages their ability to reproduce, causing both immediate and long-term damage….”. Health Risks Oil exploration and drilling carry enormous health risks for local populations as well. In addition to oil spills, the communities are also adversely

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impacted by a practice known as gas flaring. The region has an estimated 23.63 trillion cubic feet and 721 million barrels of natural gas (USGS 2016). Crude oil and natural gas are mixed in every oil deposit because, to put it simply, where there is oil, there is natural gas. Sometimes to get to the oil, the companies have to go through gas, often referred to as “associated gas.” When companies find gas, often while drilling for oil, they take one of three options. Where it is found in commercial quantity, it is harvested, processed, and sold, either domestically or globally. Another option is to reinject it into the ground for future extraction. A third option is to flare (or burn) the excess gas into the atmosphere. This last practice is widespread in the region’s oil industry: more than 40 billion cubic meters per year (3.9 billion cubic feet per day) of gas is vented into the atmosphere. There is growing indication that venting excess gas (which contains as many as 250 toxins) into the air is harmful to the environment and to society at large. The pollutants carry harmful effects for humans, animals, and the ecosystem. To start with, the gas is often released into the atmosphere in residential communities or sources of livelihoods (lakes, farmlands, fishing zones. For humans the reported health complications from gas flaring includes cancer, blood-related disorders such as leukemia, and respiratory ailments such as coughing, wheezing, and difficulty breathing, throat irritation, asthma, and chronic bronchitis (Olawuyi 2012). It negatively impacts the flora and fauna of a community. In the Niger Delta cash crops grown closer to gas flaring sites were much lower in yield and of poorer quality in nutritional value than crops grown elsewhere, away from the flare zones in the region (Dung et al. 2008; Kanyako 2018, p. 93). Inadequate Compensation The ensuing damage from oil spills and gas flaring would require compensation for those whose livelihoods have been directly disrupted. As Olawuyi (2012, p. 14) points out in his analysis of oil and the law, “international environmental law places a duty on the polluter corporation to pay victims of oil pollution adequate compensation for economic and pecuniary losses incurred.” Rarely is this requirement followed. When the Bodo community in Nigeria suffered two major oil spills in the span of one month in 2008, Shell offered each affected person a mere £1100 (Guardian 2013). Because the industry operates in a sort of regulatory vacuum, rarely are the laws followed (Olawuyi 2012, p. 4).

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There are historical antecedents for civic activism against the oil industry. One of the earliest civic protests against the excesses of an oil company occurred in Nigeria in the 1940s, when the political and civil rights leader and independence campaigner Chief Namdi Azikiwie launched some ferocious attacks against oil spills caused by the operations of Shell D’Arcy in Nigeria’s Niger Delta. Through his national Council for Nigeria and the Cameroons and his paper the West African Pilot, he and others fiercely opposed the Mineral Oils Ordinance, which, among other injustices, did not require oil companies to obtain permission from any landowners to conduct exploration work on their land. Compensation to landowners either for oil spills or other kinds of damage was very minimal, or in some cases next to nothing. Shell D’Arcy had all the legal protection, while the locals carried all the liabilities and had meager protection rights: persons accused of sabotaging the operations of the oil company could be fined or imprisoned or both. This was the beginning of vocalized protests that have continued to this day and that have now spread and become de rigueur in several parts of West Africa. Azikiwie and his team brought the abuses of oil companies into the public sphere. Economic Deprivation Whether an oil find is onshore (Niger Delta in Nigeria) or offshore (as in the Jubilee fields in Ghana), large-scale oil prospecting and drilling often lead to a loss of income for groups that depend on economic activities such as the small-scale commercial harvesting of fish, shrimp, and oyster. Boat operators and landowners are also adversely affected. It is perhaps not surprising that West Africa’s coastal communities are often poorer than their fellow citizens elsewhere. There is a large disparity between the wider community and the riverine communities in terms of development, jobs, and respect for human rights. It is not just one’s education that has a bearing on whether one gets a job with the oil industry. Gender further complicates the situation. A young woman holding an engineering degree in petroleum studies from the local university in Ghana told the author that she has been searching for a job in the oil industry for more than three years. She believes her gender has something to do with it because the oil business is often seen as a man’s job. Women and girls with little or no formal education have even fewer prospects for jobs, and they are also vulnerable to exploitation.

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In the city of Sekondi-Takoradi, Obeng-Odoom (2014) observed that many of the young women who had migrated there since the discovery of oil in 2007 were in commercial sex work. The women play a particularly important role in the small-scale fishing industry. While the boat building and actual fishing are largely done by men, women process the catch and sell it, either raw or dried. The women, referred to as “mammies,” are the main drivers of the industry and an important link in the fish processing and distributing chain. Women in the fishing industry count high cost of living and less profit due to fewer catches as challenges. One told me that the stress of the job, especially with the men spending time on the sea fishing, is causing tension in several marriages and households (Amarfio 2019). On the positive side, the women did admit that with road improvements, it is now much easier to get their fish to market and to be able to shop and return the same day even from places like Accra (discussions with the author, July 12, 20154 ). Human Rights Abuses The oil industry is one of the most securitized in the region. In addition to security forces deployed by the companies to protect their assets, governments also employ a military approach to law and order in the oil-producing communities. Freedom of movement and of association is often restricted, as authorities deploy various military units both to ward off neighboring countries and also to suppress local dissent. The end result is that the locals become increasingly resentful of the heavy security presence that turns their communities into a system of governance akin to a police state. On a short trip (a distance of about 10 miles) to an oil community in the Delta State in Nigeria, our vehicle was stopped more than five times. There were four checkpoints manned by a combination of heavily armed police and military units. In addition to stationary checkpoints, there were mobile checkpoints as well. According to the authorities, the checkpoints are there to deter armed robbery and kidnappings, which are rife in the community. On a tour of Malabo, the capital of oil-rich Equatorial Guinea, the presence of large military checkpoints was noticeable. While citizens are free to move around the presence of heavily armed personnel often generates fear among the local population.

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Identity Needs The second category of grievances reflects the basic human need around recognition, exclusion, identity, and respect often manifested in the loss of authority and control. The latter category is the needs that provide people and communities with a sense of meaning, belonging, intimacy, and autonomy. It provides communities with a sense of who they are and their place in the oil industry (Mayer 2012, p. 25). Another way in which communities’ ways of life are upended is in the social problems associated with mass movements of people in oilconcentrated areas. Oil activities (both upstream and downstream) are big, all-encompassing business that attracts people in large numbers. The influx of job seekers, security personnel, oil workers, and other stakeholders and service providers in small and relatively quiet communities brings its own social problems, including overcrowding, lawlessness, a high cost of living, prostitution, and the spread of venereal diseases. In Takoradi, Ghana, indigenous residents have become increasingly agitated as they deal with overcrowding and overpricing of basic goods and services in their own communities. The region’s most prolific oil-producing countries—Ghana, Nigeria, and Angola—are also its most expensive. Ghana, one of the entire continent’s more prosperous nations, has its highest cost of living (Gilligan 2018). The influx of new social groups threatens, and in some case causes, loss of identity and eventually authority. Oil host communities (inland and coastal) often tend to resent the disruption to their ways of life that are associated with large-scale oil drilling. Their children are more likely not to be able to attend school and as such lack employment opportunities. It thus becomes a vicious circle, with mass poverty perpetuating itself in communities that are abundantly endowed with natural resources. Exclusion from Decision-Making In all countries in the region, oil management is under the direct control of the executive branch of government. In Sierra Leone and Liberia, the respective national petroleum agencies are directly managed from the president’s office. Decisions are made at the highest level of governance, often with little or no consultation with the local people. The secretive nature of the deals and contracts signed between the government and the oil companies in particular often generates suspicion on the part of the local community, who in many cases are rarely consulted.

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The traditional rulers, including religious leaders, often find themselves in a difficult situation. They are the intermediaries and interlocutors with the central government, representing the voice of their people. They also transmit government policies in their communities. While some of the community members blame the chiefs for “selling out” to the central governments, the governments in turn blame traditional leaders when a community becomes vocal about its needs and expectations. The presence and activities of oil companies disrupt the chain of authority that underpins local government in large parts of West Africa.

Different Actors: Different Needs and Expectations All of these challenges, coupled with the absence of adequate means of redressing grievances, have created mutual mistrust and resentment and have fueled grievances and agitation at the community levels. The nature of grievances is much more convoluted and varied. Because local communities are not a monolith, the types of grievances are based on social standing and authority (chief or subject) or social gradation (age, gender). The shifting relations among these actors (at both the local and national levels) explain why oil is so often the source of grievances, especially at the community levels (Table 5.1). The character, composition, and boundaries of what constitutes community are constantly shifting. They are, as Barrera-Hernandez et al. (2016, p. 8) remind us, “neither fixed nor incontestable.” For that reason, the term community involves not only shared identity but to varying degrees also the sharing of resources. The grievances of the traditional rulers are markedly different from the concerns of the youth and, for that matter, the women. Chiefs and traditional elders are concerned with the loss of authority and the lack of basic facilities for their subjects. Youth are concerned about jobs and the lack of opportunities for upward mobility. Women are concerned about the perpetuation of discrimination and the lack of opportunities in the job sector, and they have tried to navigate the problem by forming gender-focused groups such as the Young Ladies Progressive Wing of Nigeria (Onishi 2002), which has the sole aim of promoting gender equity in the oil industry. Regardless of social groupings, the key to understanding the depth of people’s grievances lies in the social exclusion oil brings. Social exclusion—a form of discrimination that occurs when people are wholly or

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Table 5.1 Actors, grievances, and grievance articulation Groups

Grievances

Objectives

Modes of agitation

Object of agitation

Youths

Lack of jobs

Force change

Government, oil companies, chiefs

Women

Lack of opportunities Lack of power

Petitions, violent protests, bunkering Petitions, protests Delegations, lobbying Mass mobilization, litigations Negotiations

Inclusion, recognition Traditional Negotiate leaders/Chiefs better deal Intelligentsia Human rights, Create social justice awareness and force change Local Under-compensated More government infrastructure compensation development Fishing Loss of jobs and Compensation Petitions, communities livelihood bunkering litigations

Oil companies, government Government, oil companies, youths Government, oil companies, chiefs Oil companies/central government Oil companies, government

partially excluded from participating in the economic, social, and political life of their community on the basis on their belonging to a certain social class, category, or group—can manifest itself in various ways (Katoch and Ashraf 2018). In large parts of West Africa, it has led to apathy and insecurity and the denial of basic social services. The protest movements participants, including the leadership, where one exists, are drawn from all walks of life. This includes urban intelligentsia, students, the media, and women’s groups. In the case of Niger and Burkina Faso, Maccatory et al. (2010) outline the wide range of civic actors behind the various protests. “Outwardly the urban coalitions behind the ‘hunger riots’ in Niger and Burkina Faso brought together fairly comparable groups: consumers’ organisations, trade unionists, defenders of human rights, NGOs…” (p. 350). As the next section shows, community responses to exclusion are often determinative for how grievance progresses.

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Civic Response The range of oil-extraction grievances in West Africa has generated a wide array of strategies that could be broadly divided into two main categories: peaceful resistance and violent agitation. The former is largely considered legitimate means of activism, while violent forms of grievance articulation are deemed illegal. Table 6.1 summarizes the relationship between the actors, issues, and their mode of expressing grievances. The legal means of grievance articulation are usually led by activists, educated elites, working professionals, lawyers, the media, women’s groups, and labor unions. The list of actions adopted by such groups include pleadings, petitions, invasion of installations, demonstrations, and occupation of oil drilling platforms. The emerging trend is that years of marginalization, bad governance and in some cases human rights abuses in the oil-producing communities, have had the overall effect of radicalizing some members of the communities, forcing them to rely on their ingenuity to get what they can from the government and oil companies. From Cameroon to Nigeria and from Gabon to Angola, communities are using alternative strategies— formal and informal, orthodox and unorthodox, legitimate and in some cases illegal—to break the resource-monopolization cycle. These “selforganizing” groups, as Watts (2003) described them, are marked by their fluidity, which is in part a survival mechanism but also part of the larger struggle between state and civic actors in search of a more equitable distribution of the oil wealth. They have embarked on a variety of strategies including editorials in leading newspapers, judicial measures and leafletting that have all been utilized by various civil society groups to protest the indignities of the oil industry on their ways of life. While some of the protests are planned and coordinated, such as that of the civic activist Ken Saro-Wiwa of Nigeria in the 1990s, the vast majority of the protests are spontaneous with no centralized command or formalized structure. Most of these protests, Maccatory et al. point out “transcending age, differences of politics and identity, and class, recruiting large numbers of people from beyond urban marginalised people or youth” (p. 346). These collective protests played out in unexpected ways and circumstances, in the process taking some governments by surprise.

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Passive Resistance and Peaceful Disciplined Protest The use of nonviolent passive resistance to protest maldistribution in the oil industry is the most common strategy utilized by aggrieved communities. It often involves a combination of mass direct action and radical militancy, including a combination of sit-ins, picketing, letter-writing campaigns, and presentations to various influential stakeholders. In Gabon a consortium of 22 NGOs issued a well-timed public statement that heavily criticized the relationship between the government and the oil industry (Gabon Rights and Liberties Report 2013b). Under the direction of the charismatic activist and community organizer Ken Saro-Wiwa, the Movement for the Survival of the Ogoni People (MOSOP) embarked on a series of well-planned campaigns to draw attention to the excesses of the Nigerian government and the oil companies in the degradation of the environment in the oil-rich Niger Delta. The group’s effort gained wide traction both domestically and internationally because it created the Ogoni Bill of Rights, which focused on the unholy relationship between Shell and the brutal military government of General Sani Abacha. A similar nonviolent tactic also garnered attention in Gabon. In 2002 the Gabon Catholic Archdiocese wrote an open letter to President Omar Bongo of Gabon urging him to open up the oil industry to civil society participation. Part of the letter read The price of oil is measured not in barrels or dollars but in suffering, misery and successive wars, blood, displacement of people, exile, unemployment, late payment of salaries, non-payment of pensions.

In a country in which half of the population (some 600,000) are Catholic, such a strongly worded letter resonated. Similarly the Nigerian women’s movement wrote a series of letters to Shell asking for more benefits from the oil proceeds (Onishi 2002). In other to draw further attention to their campaigns and to increase the pressure on the oil companies, they also turned to both the local and international press. This is often either before, during, or after their earlier petitions to the oil companies have been ignored. For example, the Catholic Church in Gabon was fully aware that its campaign would attract the attention of powerful human rights institutions around the world. This was precisely what happened when the World Council of Churches prominently featured the piece on its website.

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The publicity garnered by the letter prompted the government to institute reforms in the oil sector and the political process in general. This was no small victory in a country where any form of political dissent is treated as a treasonable act. Using the Oil Companies as Surrogates A second set of strategies follows the classic dictum “if you can’t beat them, join them.” Instead of just protesting against the system, various communities have instead opted to extract as many concessions from the oil companies as possible. They have become increasingly savvy in their dealings with the oil companies and the oil-producing governments—they have become what I would refer to as “smart recipients,” who see the oil companies as surrogates. Smart recipient communities vie to be recognized by the oil companies as “oil communities,” a tag that carries what Ghazvinian (2007, p. 31) aptly describes as “an intoxicating raft of privileges.” They use the designation to their advantage to extract ever more concessions from the oil companies. Communities sign memoranda of understanding (MOUs) with the oil companies, wherein they promise to create peaceful oil drilling environments in exchange for very tangible goods and services such as drinking wells, clinics, and roads. Ugor (2013) reports the case of Benikrukru village in the Niger Delta in Nigeria, where the community requested social services such as a mobile boat clinic, a generator, a water tank, and a primary school. The community signed a seven-page MOU with the community.

Joint Ventures and Strategic Partnerships Another key intervention strategy utilized by the subregion’s civic groups and communities is the establishment of strategic partnerships to articulate their priorities and aspirations. These are often locally created and locally run community-centered organizations that enable collaborative strategies with a broad spectrum of stakeholders. It is through such institutions that communities advocate for reform at the appropriate point in the upstream and downstream activities of the vital players in the region’s petroleum industry. These mediating institutions also offer a chance for local and state authorities to better gauge constituency needs, moods, and aspirations. A main proactive strategy used by community groups is to gather and disseminate information in a timely and accurate

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manner to enable influence both domestic and international policy. To increase the effectiveness of civil society’s voice, they often team up with influential international advocacy organizations such as Amnesty International, Global Witness, and the Extractive Industries Transparency Initiative. These large agencies often have more resources, are media savvy, and are located in media-concentrated cities such as Brussels, London, and New York, which in turn attracts wider international attention. The efforts of the Gabon Catholic Church were heavily bolstered by its partnership with the London-based Global Witness, which put out a welltimed report titled “Time for Transparency: Coming Clean on Oil, Mining and Gas Revenues.” The report shamed Elf Aquitaine (now Total), which it accused of helping “to mortgage the country’s future oil income in exchange for expensive loans” (Global Witness 2004, p. 23). The data for these various reports which highlights massive corruption, human rights abuses and neglect in countries like Gabon and Congo, are often prepared in collaboration with or drawn from interviews conducted with opinion leaders in these oil communities. Some of the other outcomes for these joint partnerships include research and publications of thematic issues in the oil industry. For example, in April 2011 the 115member-strong Civil Society Platform on Oil and Gas in Ghana issued a well-timed report titled Ghana’s Oil Boom: A Readiness Report Card. This was a laudable local effort that was only made possible with the collaboration of OXFAM America as well as Publish What You Pay, which is a consortium of civil society organizations active in the oil and gas sectors. Among the strategies used was to precede the report with a multistakeholder forum in Accra, Ghana, followed by simultaneous presentations in Ghana as well as major capital cities including Washington, DC, and New York (Gary 2009).

Litigation From a legal standpoint, oil is perhaps the most litigation-prone natural resource. There is no shortage of issues over which oil companies can be sued: oil estimates, human rights violations, safety issues, flaring, lack of compensation, and oil spills top the list. It is perhaps not surprising that civic actors have resorted to the judicial process both domestically (within the region), and more recently internationally, as a way to redress perceived grievances. They use a combination of criminal and civil suits against the producer governments in general and the oil companies in

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particular. In November 2009 Marc Ona Essangui, one of Gabon’s bestknown civil society activists, won a court case against the government over his arrest and detention for being in the possession of a letter alleging financial mismanagement by President Omar Bongo (Gabon Rights and Liberties Report 2013a). The most high-profile strategic litigation for resolving oil grievances occurred in October 2012, when four Nigerian farmers from the Niger Delta region sued Royal Dutch Shell in the Palais de Justice in the Hague, the Netherlands. The case garnered wide international attention about the abuses of the petroleum industry in one of the world’s poorest regions. The advantages of such a legal approach to addressing grievances to the litigants are very obvious, and it may be the only choice left for aggrieved parties after all else fails. Most importantly, litigation offered them “their day” in court, as witnessed by the media frenzy that surrounded the case. In 2015, after a very protracted litigation that lasted nearly six years, Shell finally agreed to a £55m settlement to be paid out to 15,600 Ogoni farmers and fishermen whose lives were devastated by two large Shell oil spills in 2008 and 2009 each affected individual in the community received 600,000 naira (about £2100) paid directly into their account. In addition the community was given $30 million to build health clinics and refurbish its schools. It is thought to be the largest payout to any African community following environmental damage and the first time that compensation for an oil spill has been paid directly to affected individuals rather than to local chiefs (Guardian 2015). This landmark incident was a culmination of years of agitation by communities who were affected by oil spills.

Sabotage, Vandalism, and Bunkering To vent their anger and frustration, groups sometimes sabotage and vandalize company properties and assets: vehicles, communications equipment, oil rigs, and, frequently, pipelines. On April 18, 2013, 11 fishermen were charged in Nigerian federal court with oil pipeline vandalism. The offense is said to contravene the provisions of Sections 390 and 516 of the Criminal Code Act, 2004. The cases of deliberate sabotage of oil pipelines have increased systematically over the last few years, with more than 12,756 reported cases between the years 2000 and 2007 (Enogholase 2008). In 1996 the number of pipeline vandalism cases was

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Legal means of grievance articulation

Illegal means of grievance articulation

Litigation

Sabotage of pipelines

Joint ventures

Vandalism

Using companies as surrogates

‘Bunkering’/ Illegal refinery

Passive resistance

Kidnapping of oil workers

Peaceful protests

Armed insurrection

Creation of grassroots associations

131

Intimidation of traditional leaders

Fig. 5.1 Civic response to oil ‘capture’

33; in 1998 it was 57; in 1999, 497; and the following year, a staggering 600 (Ghazvinian 2007, p. 45). Shell blames 68% of the total volume of oil spilled in the Niger Delta as reportedly caused by willful damage of facilities or sabotage (SPDC 2000) (Fig. 5.1). Another form of sabotage is bunkering, which in local parlance is a reference to the process by which groups of gangs of disaffected youths tap into the oil production line and steal crude oil for sale at huge profits on the black market. The amount of sabotage incidents is sobering. By 2003 an estimated 200,000 barrels of oil (worth 100 million dollars a week) were “bunkered” by criminal gangs. In 2012 it was 350,000 barrels per day, representing an increase of 45%. Sabotage is dangerous to the environment as well as costly in human lives. In 2010, 2550 people died due to fire breakouts from pipeline vandalism (Ghazvinian 2007, p. 29; Ugor 2013). Unlike sabotage and vandalism, bunkering is largely driven by economic gains—with costly human dimensions.

Illegal Refinement of Oil The creativity of local groups is also evident in the way they process crude oil into an end-user product. The local refinement that has emerged is

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crude, environmentally degrading, and outright dangerous, but somehow effective and highly profitable. This is very well captured by Ugor (2013) in his research on the illegal oil activities in a small coastal town of Igbele in Nigeria. The improvised mechanism used for refining consists of an oven that generates fire for heating the crude, a cooling mechanism locally known as Okpuroku, which is used in regulating the temperature under which the crude is refined, and a reservoir for collecting the refined product from the oven. Typically each oven is interconnected with a network of pipe that allow raw crude to flow through the refining system to the large tanks that hold the final products, usually in the form of petrol, kerosene or diesel. The criminal gangs turn to locally available skill sets and in some cases reinvent “old autochthonous technology” that they have acquired from everyday life, including from the oil companies themselves.

The end result is a highly sophisticated process that is sustained by a complex web of interconnected formal and informal networks. Distribution relies on old trade routes that followed other commodities such as small arms, diamonds, gold, and humans. While both bunkering and sabotage seems to be largely confined to Nigeria, there is growing concern that the problem might spread to other countries in time. For example, a recent sweep by the federal police in Nigeria rounded up a Ghanaian and three Beninois.

Counter-Response from Governments and Oil Companies The emergence of an independent and highly creative “self-organizing” movements at the community levels has rattled the establishment. The response from governments and oil companies falls into two main categories: concessions and outright hostility. In order to counter the growing influence of these agitational groups, the governments in the region (sometimes in collaboration with the multinational corporations) have embarked on a large-scale process of coercing and coopting the leadership of these grassroots protest movements. In some cases, the authorities encourage, through direct funding or other forms of support, the emergence of pro-government groups to counter the influence of independent activist groups.

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There are signs that some activist movements are paying dividends: some governments are paying attention and making concessions. The Ghanaian government has used community concerns to foster transparency in the oil industry. For example, civil society was an important stakeholder in pressing Tullow, the main oil company operating in the country, to publish its production agreement online (Burgis 2012). This led to the organizing of a citizen’s summit on oil and gas and the creation of Petroleum Revenue Management Law in 2011 (Civil Society Platform on Oil and Gas 2011). Several other countries, including Senegal, Gabon, and Cote d’Ivoire, have all copied the Ghanaian model by crafting legislation that recognizes the role of civil society in monitoring and evaluating oil contracts and resource management. The general trend across the region, however, is that the states have become “increasingly resentful … towards the phalanx of activist groups ranged against it” (Obadare 2005). Some oil-producing governments, and by extension the oil companies, have not taken kindly to the vigorous interrogation they have been subjected to by the various oil communities. Their response has ranged from intimidation to arrests, harassments, exile, and in some cases torture and death. In 2008, the interior minister of Gabon suspended 22 NGOs for a week after they issued a public statement criticizing the government. Civil society leader Marc Ona Essangui was prevented from leaving the country to attend international conferences on four occasions in 2008 (Gabon Rights and Liberties Report 2013b). This is very well articulated by Obadare (2005): As at the time of Abacha’s sudden demise in June 1998, an estimated 157 groups were at the forefront of the campaign for his transformation into a civilian president…Many of these groups were either established with direct state funds or, alternatively, the tacit imprimatur of officialdom.

For their part, the oil companies have responded mainly through their corporate social responsibility frameworks by which they provide direct support to the oil communities. Also known as “oil for infrastructure” deals, it often involves formal and informal arrangements or memoranda of understanding in which oil companies provide citizens with infrastructure such as roads, railways, telecommunications, or even airports (Open Oil 2012). The Chinese National Oil companies are particularly adept at these kinds of barter-system arrangements. All of the oil companies operating in Gabon, Ghana, Nigeria, and Liberia engage in various kinds of

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corporate social responsibility schemes. KPMG (2012) gives the examples of Shell, which funds various conservation programs in Gabon, and Total, which in 2011 helped renovate the Port Gentil airport and underground cable. All of these activities are geared toward assuaging the fears and concerns of the local populations and creating a conducive oil drilling environment. Community mobilization and agitation have succeeded in shaping the region’s oil industry in profound ways. One of the most discernible impacts is that vocal agitation is helping to foster communication in an industry renowned for its secrecy. The bottom-up protests against perceived injustices have forced the most powerful actors in the oil industry—governments and oil companies—to be more sensitive to the needs and aspirations of various community groups. There is evidence the oil industry has been concerned with local employment and employability for a while. In 2013 I was invited by leading service providers of the oil industry to present a paper and proffer recommendations on the linkages between education and the oil industry. Since one of the many issues the industry grapples with is preparing an employable workforce, at the Ghana Oil and Gas Summit in Accra I made a presentation to oil professionals, industry specialists, and young university graduates on the linkages between education and job skills in the region’s industry. The details of the presentation are discussed elsewhere in the book. For now suffice it to state that audience which comprised of a good mix of industry insiders and students had questions mainly around concrete ways to build partnerships with the university system given that the latter tends to be critical of the industry. Armed Resistance The second broad category under which community responses fall, and no doubt the most controversial, is armed resistance against the perceived injustices of the government and the oil companies. The violent forms of protest utilized by these disparate groups take many forms: kidnappings of oil workers and executives, hijackings of personnel and equipment, roadblocks, sabotage of pipelines, and assassinations. They also engage in random skirmishes with security forces. The situation in the Niger Delta epitomizes the complex challenges that organized armed attacks pose both to national security and, indeed, to the region. Since the 1990s a plethora of groups, often hatched by

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young people frustrated over lack of jobs and economic opportunities, have sprung up in different parts of the oil-rich delta from its population of 70 million people. Groups that have used violence to agitate for oil revenues include Agape Is a Birthright, Ijaw Youth Council, the Niger Delta People’s Defense Force, Ijaw Republican Assembly, the Coalition for Militant Action in the Niger Delta (COMA), Niger Delta People’s Volunteer Force, Niger Delta Women for Justice, and ODI against Genocide. One of the most prominent and sophisticated of these groups, however, is the Movement for the Emancipation of the Niger Delta, better known by its acronym, MEND. The highly secretive group first came to prominence in January 2006 with the dramatic kidnapping of foreign oil workers. It has since followed that up with a series of spectacular attacks on oil pipelines in the Niger Delta. Their attacks have grown more vicious and more costly for the authorities. To evade the Nigerian authorities, the group has a fluid structure, and its leadership remains largely anonymous. These armed insurgent groups are aggrieved over many issues, including the maldistribution of oil revenues, environmental degradation and lack of development in the oil-rich Niger Delta. Shell, one of the largest investors in the country’s oil industry, derives some 12% of its equity from Nigeria and as has been the primary target in a lot of these protests and armed attacks. It has been blamed by the armed militants for working with the Nigerian government to suppress protests. The multinational conglomerate was cited as the source of arms for the Nigerian government by some NGO groups during the crackdown on the protest movements organized by Ken Saro-Wiwa (Clarke 2008, p. 92). While many, including members of the community that these groups purport to represent, are critical of the harsh methods used by these groups, few would deny the existence of genuine grievances. Their mayhem-creating tactic works toward their ultimate goal of increasing the cost of doing business for both the government and oil companies. The response of the Nigerian government has been twofold: cooptation and, when that fails, the use of force. The government has flooded the Niger Delta with armed personnel to combat the proliferation of armed groups. In 2005, the leader of the Niger Delta People’s Volunteer Force, an Ijaw militant group, was arrested and imprisoned after he declared “all-out war” against the Nigerian government. Alhaji Mujahid Dokubo-Asari was released two years later in 2007 by Nigerian President Olusegun Obasanjo as part of an amnesty program involving

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payments in exchange for the group’s renouncing violence and surrendering its weapons. The deal soon collapsed and Asari was rearrested, charged with treason, and imprisoned for the second time (Council on Foreign Relations 2007). A similar fate befell another militant leader: in March 2013 the south African government sentenced Henry Okah, one of the alleged leaders of MEND, to 24 years in prison for his role in a series of bomb attacks in Warri and Abuja. During his trial for terrorism, he called on the former US President Jimmy Carter to mediate the conflict in the Niger Delta (Clarke 2008, p. 88; BBC News 2013). With the exception of piracy, there are no signs that the violent protestations that have blighted the Nigerian soil industry will spread to other parts of the region. Nigeria has the longest history of oil production in the region, so the residents in the affected communities have had a much longer contact and experience with the negative impacts of oil. And unlike Nigeria’s oil finds, which have been mainly on land, most of the new commercially viable oil finds elsewhere in the region are offshore, in deep and ultra-deep waters off the Atlantic coast. Because these are nonresidential areas, unlike the heavily populated Niger Delta oil fields, the protest movements they have spurned have been less vocal. That is most certainly the case in Angola, Equatorial Guinea, and Ghana, all of which drill for oil outside of the populated areas, in the deep and ultra-deep waters. These various ways of responding to resource capture should be understood within the context of the growing attention that indigeneity as a concept has generated. In the arenas of advocacy, policy, and academia is a growing consensus that people’s welfare should be part of the calculus in the extractive industry. This is partly because the local communities are the first to be affected by rapacious and momentous changes that an allencompassing economic activity such as oil drilling brings. The concept of indigeneity should be mainstreamed so as to ensure citizen participation in the oil industry. Such a people-centered approach will ensure that due diligence is taken and that cost-benefit analyses mitigate the damaging effects of oil drilling, such as environmental and habitat destruction, and social and cultural dislocation. The effects are sometimes felt beyond the most immediate vicinity. While oil extraction can sometimes have a devastating impact on a community, there is evidence that where due diligence is applied, the industry can also have positive outcomes such as benefit packages promoting health, education, and cultural outcomes, revenue flows, and jobs. Where used with due diligence, oil revenues are a powerful mechanism to

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promote social capital as the effects can be far-reaching, a cascading effect on other parts of the community.

Corporate Philanthropy One of the mechanisms through which benefits accrue to the community is through corporate social responsibility, a reference to a company’s voluntary efforts to give back to the communities in which they have invested by integrating various social and environmental concerns in their business dealings and in their interaction with other stakeholders. It involves the conscious efforts by companies to include all kinds of efforts throughout the supply chain, labor and environmental standards that can range from donating money to nonprofits to local employment, training and education, well-funded community infrastructure including health, education, and recreation facilities, ecosystem rejuvenation, and wildlife habitat preservation (Lucas 2004, p. 354). Giving back to the community from which the resource is extracted also has benefits for the corporations. It helps minimize the risk of damaging their brand names and is a mechanism by which corporations show that they also care about people and the environment. Such goodwill gestures are also good for an organization’s profit margins, as evidence shows that people are now more socially conscious and are more likely to patronize businesses that position themselves that way. In short, corporate philanthropy is good for enhancing a business’s profile (Knorringa 2010, p. 187). In my travels around the region (between 2014 and 2018) I saw firsthand the center–periphery disconnect. Delta State University, the flagship university in the oil-rich delta region, was rundown and dilapidated. It had the air of neglect about it. There was no electricity when I took a conducted tour of the once-famous institution. The campus was overgrown with grass. One of the workers told me that they had not been paid for four months (discussion with author, July 12, 2015). The science lab was closed, with one of the junior staff pointing out through the broken window that the lack of adequate power supply made it difficult to teach effectively. In Malabo in the Equatorial Guinea I noticed that the facilities and amenities in the city—the University of Malabo, the main roads, and the airport—were in better shape than those closer to where the areas where the oil was extracted. The airport was under major refurbishment

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at the time of my visit. In short there is evidence that the pressure of campaigners is beginning to yield dividends. The overall picture, however, is that the proceeds of oil have not trickled down fast enough to the people who often have to bear the consequences of aggressive oil extraction in West Africa.

Conclusion West Africa is increasingly experiencing large-scale community backlash against the negative effects of oil exploration and drilling. As petro-culture entrenches in the region, an increasingly marginalized civic sector is tapping into widespread disenchantment to press for inclusivity and the redistribution of the proceeds from oil. In their bid to seek redress, affected communities use local-level strategies and coping mechanisms. The wide array of civic actors who feel increasingly marginalized in the oil wealth redistribution process have a complex form of agency, and disparate group use public-impact initiatives and a mix of ingenuity and entrepreneurship to compel governments and oil companies for inclusivity in both the upstream and downstream activities of the region’s oil economy. As more of the risks of oil companies’ operations and governments continue to be borne by the local communities, the nature and type of strategic responses adopted by these aggrieved groups has metamorphosed accordingly. Not only have the agitations increased in frequency, size, and scope, they are also turning into virulent, militant protestations that pose a threat to the nascent peace and stability of the conflict-prone region. While some of these tactics have been devised and perfected in countries with a long history of oil resource capture, such as Nigeria’s Niger Delta and Cabinda in Angola, traces of militant agitation are already appearing in other prospective oil communities in the region. A people-centered approach on the part of the industry will be crucial in diverting these genuine grievances into meaningful dialogue, sustainable development, and lasting peace in one of the world’s poorest and most conflict-racked regions.

Notes 1. 2. 3. 4.

Email interview with Chief David Kellie-Coomber IV, September 7, 2019. Ibid. Discussions with author, August 12, 2017, Malabo, Equatorial Guinea. Discussions with the author, July 12, 2015, Accra, Ghana.

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CHAPTER 6

Civil Society and Global Frameworks

The Issues and the Critics West African civil society organizations (CSOs) have helped improve oil governance and mitigate its negative impacts in the region. From the grassroots to national, regional, and international levels, CSOs have been at the forefront of agitation against oil-induced social privation, environmental degradation, and human rights violations in West Africa. Through advocacy and monitoring of extractive proceeds both international and domestic, civil society have helped drive the debate on sound resource management and transparency. They have helped prevent and manage conflicts, raised awareness through advocacy, and engaged in direct action including litigation against government policies and investor activities, all in a bid to hold the industry’s leaders and most influential political agents accountable and more responsive to the needs of the people. Evidence shows the multifaceted efforts of these groups have had some impact on the operations of both governments and investors. Various civil society activities have raised awareness of petroleum’s potential for development as well as its negative impacts on many parts of the region. Civil Society’s Visibility and Growing Influence Civil society is as varied as the region and as complex and numerous as the issues they are concerned with. The thrust of this chapter is on local

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civil society: those domestic or indigenous groups (both formal and informal) that were founded by locals and are staffed, managed, and operated within the countries of the West Africa subregion. They are groups set up by indigenous or long-term residents of the region with the aim of effecting change either internationally, subregionally, nationally, or locally. The work of these groups is highlighted partly because their contributions are often downplayed or eclipsed by their more illustrious international counterparts and are thus depicted in the literature as reactive rather than proactive agents of change. But as will be illustrated here, evidence shows that these local organizations are organic and have taken on agency and characters of their own and have in the process helped shape the discourse on resource management in West Africa (Kanyako 2018). The second focus of the chapter is how these groups engage with other stakeholders, including international civil society, to expand the scope for citizen’s participation in the region’s resource management. This approach is based on the premise that active citizen participation is a prerequisite for good governance, transparency, and sustainable development. A UK Department for International Development (DFID) white paper sets out three overlapping principles for good governance: capability, accountability, and responsiveness. All three characteristics are needed to make states more legitimate, effective, and inclusive. They also reflect the need for state and citizens to work together to build effective states, to strengthen what is already in place, and to develop new institutions for the management and resolution of conflict (Kanyako 2018). The exact number of CSOs in the region is difficult to ascertain. There are several reasons for this dearth of information. The sector, to start with, is amorphous, with organizations emerging and dissipating, often in response to felt needs, the availability of donor funding, and the existing political space within which CSOs can operate. The presence of CSOs working on issues around the oil industry in a specific country is sometimes dependent on a host of factors including funding (or the lack thereof). Of equal importance to understanding the growing influence of civil society is the type of government in power. Countries such as Gabon, Angola, and Equatorial Guinea, with the longest-serving heads of states, have very little space for civil society engagements including a lack of basic human rights, the absence of freedom of speech, and the lack of space for civil society.

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Also, many of these community organizations tend to register or formalize their status with various departments and entities in their respective countries. Often, groups register based on where they are located or their thematic area of operation and activities. There is a wide array of nomenclature (“nongovernmental organizations,” “community-based organizations,” etc.) reflecting the wide array of organizations that make up the nongovernmental sector. It should not be surprising, therefore, that consolidated data on numbers of CSOs is not readily available or, in the case where it is, is often not accurate. What is evident is that the number of civil society groups (both formal and informal) in the region is growing at an exponential rate. Ekiyor’s (2008) estimate that there are over 3000 formal CSOs working within West Africa in the areas of human rights and good governance alone. Even this appears to be a gross underestimate. For example, in Sierra Leone alone, past estimates have put the total number of organizations, including community-based organizations (CBOs), a distinct legal form, at about 1000. In 2017 the National Elections Watch a civil society consortium, screened about 400 organizations to serve as domestic election monitors. Two hundred and thirty-eight local organizations and 100 international organizations were reported in 2017 to be registered with the Ministry of Finance and Economic Development (MOFED), which registers organizations that seek to obtain status as NGOs, also of course a distinct legal form. To attract much-needed donor support, many unregistered organizations are now considering registering to obtain legal status, and official records show a marked increase in the registration of local organizations in 2017 (Kanyako 2018). In Liberia the same pattern is discernible. For example, in 2016, the Non-Governmental Organization Coordination Unit of the Ministry of Finance and Development Planning, the main regulatory body for CSOs, accredited 1041 organizations. It must be emphasized that these statistics reflect just the formal sector of civil society. When one adds the informal and community-based organizations and the vast array of informal associations that do not formally interface with the state or local authorities, the number of groups that would qualify as civil society increases more than tenfold.

Classification and Typology There are various kinds of CSOs in West Africa. Because they vary in size, scope, focus, and capability, any attempt at a neat typology quickly runs

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into problems. The difficulty stems from the fact that civil society is made up of amorphous groups that serve a wide variety of beneficiaries using a plethora of approaches. These are professional membership organizations, nationally oriented faith-based organizations, professional NGOs, coalitions, and CBOs. Does one categorize such groups according to the “public” they serve (women, children) or according to how they serve them (advocacy, service delivery)? Or should they be categorized according to their setup and management structure (formal, informal) or their geographical location (rural, urban)? Creating a typology that fully captures the breadth and scope of their setup, composition, and operations therefore raises some conceptual challenges. It is beyond the scope of this book to detail the wide spectrum of civil society groups, not to mention delve into the plethora of work they do. There are as many groups as there are issues. I will limit this discussion specifically to those groups that interface directly with the petroleum industry, in both its upstream and downstream sectors. Such microfocus will make for a more detailed analysis relevant to understanding the agitations and response strategies around the oil industry. There are numerous civil society agents engaged in the extractive industries in West Africa. An assortment of civil rights organizations, community rights organizations, environmental organizations, as well as workers organizations have all played a key role in drawing attention to the prospects and challenges of West Africa’s petro-industry. At the simplest level, the efforts of these groups could be broadly divided into both domestic and international efforts, with the latter often led by large global organizations. There are externally driven civil society initiatives: organizations that are wholly formed by interested parties overseas but operate in the region or as a joint venture between local, or domestic, and international actors. At the domestic level, one of the most important kinds of civil society activists is the large regional organizations, whose mandates and scope of activities covers the entire region. These are West African specialist organizations, founded in the region and mainly operational in West Africa. Among the most prominent of these are the West Africa Civil Society Forum, which is based in Abuja, Nigeria; the West Africa Civil Society Institute, based in Accra; the West Africa Network for Peacebuilding, also in Ghana; and the West Africa Center for Peace Foundation as the names suggest, these organizations are geographically specific in scope in that

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they deal mainly with issues affecting the subregion. The first two are among the most well known and most influential. In 2017 I spent seven days at the West Africa Civil Society Institute (WACSI) in Accra, Ghana, and paid a working visit to the office of the West Africa Civil Society Forum as part of an effort to gain a deeper understanding of how the region’s civil society organizations operate. With the former, I pored over books in the small but efficiently organized library and used the opportunity to engage with members of the staff, who, though predominantly Ghanaian, are drawn from all over the region, from countries like Cameroon, Benin, Burkina Faso, Nigeria, Togo, and Côte d’Ivoire. The growth and evolution of this organization in many ways mirrors the trajectory of the region’s civil society and its influence on critical issues such as the environmental and social impact of oil drilling in West Africa. WACSI was established by the Open Society Initiative for West Africa (OSIWA) in 2005 to build the capacities of civil society in the subregion. It works with civil society organizations from all over the subregion (Côte d’Ivoire, Niger, Benin, Zimbabwe, Guinea, Ghana, Nigeria, Senegal, Liberia, and Sierra Leone), as well as with the international community interested in capacitating the civil society sector. The organization depends almost wholly on its funding from overseas. Among its partners includes OSIWA, the Star Foundation Ghana, the French Embassy to Ghana, the African Women’s Development Fund, the International Drug Policy Consortium, ECOWAS, and a host of American or USbased foundations and nonprofits including the International Research and Exchanges Board (IREX), the Ford Foundation, and the International Coalition for the Responsibility to Protect. Star Foundation Ghana is in turn funded by the European Union, the Danish Ministry of Foreign Affairs, and UK Aid. In addition to building the capacity of civil society in the region, the organization has also partnered with the civil society transparency outfit Publish What You Pay to raise awareness on public service delivery and citizen’s awareness of their rights around mineral extraction and the free movement of goods and services. Another important organization worth mentioning is the West Africa Civil Society Forum: WACSOF was founded in 2003 as the result of a joint initiative by International Alert, ECOWAS, and the Centre for Democracy and Development. Like WACSI, WACSOF works with civil society across the region. The key difference is that the latter focuses a lot of its energy on working with the secretariat of ECOWAS to include

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civil society voices in decision-making at the regional level. It operates in all 15 ECOWAS member countries. In addition to these larger outfits, there are other umbrella-type organizations that are national in scope and activity. They work directly with oil and extractive-industry-related issues in general in the subregion. Some of the most well known include the Civil Society Platform on Oil and Gas (CSPOG) in Ghana, Liberia Oil and Gas Initiative (LOGI), and National Advocacy Coalition on Extractives (NACE) in Sierra Leone. It is through such platforms that most civil society activity directed toward the region’s oil management has taken place. The Ghana-based CSPOG was established in 2009 as a platform for knowledge sharing and for harmonizing the voices and actions of Ghanaian civil society in the oil and gas sector. It has a membership strength of 120 individuals and 60 organizations including gender advocates, organized labor, faith-based groups, media representatives, and communitybased groups. The Platform takes its roots from a 2008 civil society consultative meeting organized in Mankessim, in the Central Region, ahead of the first-ever Ghana Oil for Development Conference, organized in that same year by the government of Ghana and its development partners. The Oil for Development Conference was intended to solicit input into the development of the governance framework for the country’s newly discovered oil and gas resources. Civil society participation in the government-led conference was restricted to a handful of civil society groups, and so the Mankessim forum became necessary for the purpose of collating the input of a larger civil society for submission to the government-led conference. Perhaps one of the few bright spots of the industry is the existence of a very vocal civil society. The Liberia Oil and Gas Initiatives (LOGI) comprises the Center for Transparency and Accountability in Liberia (CENTAL), Sustainable Development Institute (SDI), Liberia Media Initiative for Peace, Democracy and Development (LMI), and Liberia Democratic Institute (LDI). LOGI was founded in February 2012 as a civil society initiative to foster accountability in the country’s oil industry. In partnership with other advocacy organizations, both regional and international, LOGI has succeeded in pushing the Liberian government to open up the industry to more scrutiny. In August 2012, it organized a two-day CSOled gas and oil knowledge transfer workshop at Robertsfield Highway, just outside Monrovia. The group is perhaps best known for teaming up with the London-based Global Witness in 2011 to produce a groundbreaking

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report on the country’s oil industry, titled Curse or Cure: How Oil Can Make or Break Liberia’s Economy. The report outlined the problems in the oil and gas sector, it highlighted the country’s weak legal and institutional infrastructure and financial mismanagement fueled by opaque deals and top-level bribery. The 67-page report called for urgent reforms in the industry if the resource is to benefit its people. A third consortium worth mentioning is the National Advocacy Coalition on Extractives (NACE) of Sierra Leone. The National Advocacy Coalition on Extractives (NACE) emerged from the Diamond Area Community Development Fund (DACDF) coalition established in 2003. It included Catholic Relief Services (CRS), Network Movement for Justice and Development (NMJD), Talking Drums Studios (TDS), Action Aid Sierra Leone (AA-SL), World Vision International (WVI), the AntiCorruption Commission, Sierra Leone Indigenous Miners Movement (SLIMM), and some Government Line Ministries (Ministry of Local Government and Community Development and Ministry of Mineral Resources). It advocates for transparency and accountability in the oil industry in Sierra Leone. These organizations act as the focal points of civil society engagement with the industry. By working together they generate cross fertilization of ideas and develop their knowledge base on the industry. Through networking they also support one another and help create a multiplier effect.

Single-Issue Organizations In terms of numbers, the vast majority of civil society agencies are single-focus organizations. These are often organizations that operate at the grassroots level as individual units with a rather narrower focus. Once again, examples in Nigeria offer some instructive lessons regarding the growth and evolution of the region’s civil society groups. In the Niger Delta, where the pervasive effect of oil is more pronounced, several ethnonationalist groups including the Environmental Rights Action (ERA); Movement for the Survival of Ogoni People (MOSOP); Ijaw Youth Council (IYC); Movement for the Survival of Ijaw Ethnic Nationality (MOSIEN); Institute for Human Rights and Humanitarian Law (IHRHL); Niger Delta Human and Environmental Rescue Organization (NDHERO); Agape Is a Birthright; Ijaw Republican Assembly; Niger Delta Women for Justice; and ODI against Genocide, have emerged to advocate for their rights sometimes through the use of militant agitation

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(Ibeanu 2006). The instability brought the issue of the resource curse into prominence and eventually into the national consciousness. Many of these organizations have either morphed or have since gone on to play prominent roles in conflict mitigation and in mediating the relationship between foreign investors and oil communities (Ikelegbe 2005, pp. 46– 47).

Activities and Programs West Africa’s civil society is engaged in a wide variety of activities that directly relate to and profoundly shape the oil industry. Civil society institutions, including independent media, professional associations, religious groups, labor unions, student unions, advocacy groups, and town unions are engaged in a broad spectrum of programs aimed at curtailing the excesses of the oil industry and making it more responsive to the needs of the population. In addition to monitoring revenue flows and compliance with laws (one of the most common tasks), they are engaged in assessing the impact of oil extraction on issues such as governance, water and sanitation, human rights and the environment (particularly oil spills), conflict management, peacebuilding, advocacy, information dissemination, and raising awareness. They also advocate on behalf of affected populations such as women and youth, coastal and fishing communities, and people with disabilities. By empowering citizens, especially the most disadvantaged, they foster bottom-up social accountability, which has in turn led to improved service delivery, active citizens, and enhanced revenue mobilization and general government and private-sector accountability to its citizens. In this section, I outline a few of the core activities of civil society in the subregion. This list of core activities is by no means exhaustive but rather indicates the broad spectrum of civil society’s role in the petroleum sector. Commercial oil has exacerbated and deepened various kinds of social conflicts among communal groups. Communities quarrel and sometimes engage in armed conflict over access to oil proceeds. Civil society organizations play a mediating role in communal conflicts, both internal and external, within various oil communities in the region. Sometimes these conflicts are fueled by the authorities, as a consequence of designating some as oil communities, which comes with perks like the provision of basic social services, or by oil companies, as a way to divide opposition to the exploitation of natural resources. In Nigeria’s Niger Delta, the conflict

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between the Ogoni and the Itsekeri or between the latter and the Ijaw is largely driven by rivalry over the spoils of oil proceeds and through the involvement and encouragement of the state, which fueled the violence (Ake 1987).

Education and Skills Training: The Role of the University System In 2017 I presented a paper titled “The Role of Institutions of Higher Learning in Preparing the Requisite Workforce for the Oil and Gas Industry” at the Accra International Conference Center in Accra, Ghana. In the one-hour presentation to an audience drawn from across the industry, both regional and international, as well as outsiders, I argued that as a capital-intensive and technologically driven industry, the oil and gas industry, and the (higher) educational system are made for each other. New technologies require a workforce trained to carry out complex tasks in a fast-paced environment where the margin for error is small, as any mistake could lead to environmental catastrophe or loss of life and habitat. The presentation highlighted the fact that there is a tremendous discrepancy between the skill set required by the petroleum industry in the region and the existing technical capabilities of the local populations, especially in the downstream phase of the process. The effort and knowledge needed to produce and manage the resources are not always thoroughly understood. There is an imbalance between demand for and supply of skills, which leads to inefficient use of resources. Because training for key technical positions is often costly and time-consuming, oil companies and other suppliers often lack the incentive to invest in local capacity building. Businesses such as oil companies are reluctant to offer general training to the workforce, preferring to give specific training defined as the practical expertise required for operating the tools of the trade (Labarca 1998). In that vein, higher education, whose key aim is to advance the frontiers of knowledge by concentrating in one place some of the most intellectually able people who are not preoccupied with day-to-day administrative or professional responsibilities, has a critical role to play in preparing young people with the requisite skills to work and thrive in the industry. Reform of the educational system is urgently needed to make the

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region’s institutions of higher learning relevant to the petroleum industry. Educational institutions must adapt to changing trends. One key step would involve the creation of industry-specific institutions of higher learning. Already, there are some signs of that happening: the University of Mines and Technology (UMaT) has faculties of engineering and mineral resources technology and the Kwame Nkrumah University Colleges of Agriculture and Natural resources. For such changes to become meaningful, however, there is a need for collaboration between the government, IOCs, and local institutions of higher learning. At the regional level, there should be a subregional university that provides training for and supports African-specific institutions. Perhaps one of the areas of civil society with the most success has been in the advocacy domain. Civil society across the region has successfully advocated on various issues facing the region’s oil management. Groups such as Alliance for WASH Advocacy, Wassa Association of Communities Affected by Mining, the Center for Public Interest Law, Client Earth, Tropenbous, and several other organizations have become more vocal in advocating against the damaging effects of large-scale mining in the region. They advocate on wide ranging issues ranging from water pollution and the destruction of the environment by illegal mining. Another area of fundamental concern to civil society is the lack of transparency in the management of all areas of the oil sector. Across the region, the governments and the oil companies are held accountable by various civil society groups and watchdog organizations, including the media and international nongovernmental organizations. There has been heightened recognition that transparency for economic as well as social development is key to making sure that petroleum benefits its people. The increased calls for transparency and open governance processes by civil society have helped open the space for various social groups and affected communities to articulate their views around the extractive industries (Ibeanu 2006, p. 27).

International Level: Global Frameworks for Promoting Transparency The efforts of domestic activists are complemented by the programs of external agents, mainly international NGOs and multilateral agencies of various kinds, operating both as a consortium and individually. They have sprung into action in response to conflicts and community disputes as well

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as due to pressure from various international civil society organizations. They’ve jointly established formal frameworks for preventing and mitigating conflict related to major economic projects. Five of the most prominent and relevant of these global efforts relevant are the Voluntary Principles on Security and Human Rights (VPs), the Environmental and Social Standards, the Global Compact, the Extractive Industries Transparency Initiative (EITI), and Publish What You Pay. The last two deserve further discussions because they focus almost solely on the extractive industry but also because they have some of the largest networks involving a broad spectrum of civil society actors from across the globe. Formal Frameworks for Promoting Transparency and Accountability in Resource Extraction Majority of the most influential global frameworks related to the oil and gas industry were founded in the 2000s, and within a six-year period (2000–2006). Collectively, these efforts have helped draw attention to the challenges in the oil industry in regions such as West Africa and have no doubt been influential in shaping policy on transparency and accountability in an industry renowned for its secrecy. For example, the World Bank’s Environmental and Social Standards focus on core areas such as: labor and working conditions, pollution control, land acquisition, community health and security, biodiversity, cultural heritage, and indigenous people’s rights. The Global Compact, a UN initiative developed 10 principles covering the environment, human rights, labor, and anticorruption with companies and other, public sector bodies encouraged to adhere to them. The Voluntary Principles on Security and Human Rights require the 25 participating companies to carry out risk assessments that include conflict analysis and appraisals of security risks (Shankleman 2006) (Table 6.1). These formal frameworks are just some of the many efforts aimed at making the petroleum industry more responsive to the needs of the community. As the linkages between natural resources, good governance, and human rights engenders conflict, the international community is increasingly getting involved in fostering transparency in the region. Many International NGOs, foreign governments, and international multilateral institutions have significantly contributed to creating policy reforms that have drawn attention to the excesses of the oil industry. The leading external agencies in addressing the challenges of resource extraction in West Africa include Human Rights Watch, Amnesty International, Greenpeace, Sierra

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Table 6.1 Global regime for enhancing the peace properties of oil Organization

Year founded

Core members

Mission

Voluntary Principles on Security and Human Rights

2000

The Environmental and Social Standards

2006

Curb abuses and reign in security forces protecting extractive projects Addresses the local environmental and social impacts of all types of major projects

The Global Compact

2002

Group of NGOs, extractive industry companies, US and UK governments World Bank’s International Finance Corporation (supported by 40 of the world’s leading commercial banks) United Nations, 5000 participants, including more than 3000 companies

Extractive Industries Transparency Initiative

2002

Publish What You Pay

2002

African Peer Review Mechanism (APRM)

2003

Coalition of NGOs/civil society working with governments and companies Coalition of NGOs and civil society Founded by African leaders

Directly works with companies to promote universal principles on human rights, labor, environment, and anti-corruption Self-reporting mechanism that promotes transparency Financial transparency in the extractive industry self-monitoring mechanism

Source Author

Club, the Body Shop. Friends of the Earth, Global Exchange, Mangrove Action Project, Environmental Rights Action, Essential Action, Transparency International, and Global Witness. Some of these focus on the human rights challenges of petroleum (security forces abuse, displacement, violence, lack of basic social services, etc.); others, such as the Mangrove Action Project and Environmental Rights Action, are mainly concerned with the impact of oil activities on the environment, the flora and fauna and, by extension, the people. Berlin-based Transparency International was founded in 1993 by former World Bank official Peter Eigen and nine partners, to draw attention to the negative impact of corruption worldwide. It is rated as one of the most visible anticorruption advocates, mainly as a result of its highly

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Table 6.2 Key concerns of international non-governmental organizations Organization

Issues

Tactics used

Amnesty International

Human rights

Human Rights Watch

Human rights

Global Witness Sierra Club

transparency/accountability Environmental justice

Friends of the Earth

Environment

Investigations, naming and shaming, public campaigns Investigations, engagement, publications Investigations, reports Media campaigns, publications, lobbying Investigations, reports, media campaigns, lobbying

Source Author

regarded Corruption Perception Index. In West Africa, as in other parts of the developing world, it assists its 94 national chapters by providing them with tools and training to curb local corruption (Table 6.2). The main advantage of international agencies is their wide network, financial resources, access to influential global leaders, including powerful news media outlets such as CNN and the BBC. Using these multipronged approaches, they influence the discourse in profound ways. The news media is particularly influential in raising awareness about excesses in the industry. For example, LOGI’s report on corruption in the nascent Liberian Oil industry was picked up by a host of outlets. The Italian investigative unit was influential in exposing malfeasance in the oil industry in general. The INGOs are most successful in engaging the public and the government agencies due to their support structure and resource availability. Other institutions play critical roles in educating and empowering civil society by building their capacity to deal with the intricacies of petroleum extraction and the management of its proceeds. Of all these global efforts, however, the EITI and Publish What You Pay initiatives deserve special mention. Together they have succeeded in bringing to the fore the issue of corruption and accountability in the oil industry and its implications for regions such as West Africa. As the name suggests, the London-based Publish What You Pay campaign wants foreign governments, oil companies, and other foreign investors to disclose the amount of money paid to producer governments for natural resource extraction, including oil and gas. They are driven by the fundamental belief that the lack of transparency, especially the lack of financial disclosures, is a critical reason for most of the abuses witnessed in the industry.

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They see the financial approach as a key step toward reversing or mitigating the resource curse. It depends on a host of members and partners in the affected countries to gather data and to put pressure on the authorities to comply with financial laws, both domestic and international. The EITI was launched in 2002 as a joint effort between an NGO consortium and a group of oil companies. Its unique approach lies in the fact that it directly works with policy makers, investors as well as civil society agents in the affected regions to promote transparency in the region. It advocates on behalf of groups, undertakes research as well as build the capacity of civil society in the developing world. They also play a monitoring role, to ensure that resources earmarked for various communities, in terms of social services, actually reaches them. In West Africa, it is present in Cameroon, Côte d’Ivoire, Ghana, Liberia, Mali, Mauritania, Nigeria, Sierra Leone, Senegal, and Togo. It encourages multistakeholder groups to use innovative approaches to promote resource revenue transparency. Its Côte d’Ivoire produced a film to raise awareness about the EITI called “Pétrole, gas et or de la Côte d’Ivoire, combien gagne-t-on?” It also provided input about the drafting of new oil and mining codes, with a view to making EITI reporting mandatory. Through such efforts, especially with regard to its voluntary disclosure policies, we now know that in 2016 the country earned $687 million from extractive industry taxation (EITI 2019). Perhaps the biggest influence of the EITI has been its work in Nigeria through the Nigerian Extractive Transparency Initiative. Nigeria joined EITI in 2003, achieved its compliant status in 2011 (NEITI 2012). The NEITI Act 2007 commenced on May 28, 2007, not only established NEITI and gave it the responsibility, among others, for the development of a framework for ensuring transparency and accountability in the reporting and disclosure by all the extractive industry companies of revenue that is paid to the Nigerian Federal Government. The five main objectives of the NEITI Act are as follows: 1. To ensure due process and transparency in the payments made by all extractive industry companies to the federal government. 2. To monitor and ensure accountability in the receiving of revenue of the federal government from the extractive industry companies. 3. To eliminate all types of corrupt practices in the determination, payments, receipts and posting of revenue acquired to the federal government from the extractive industry companies.

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4. To ensure transparency and accountability by government in the application of resources from payments received from extractive industry companies. 5. To ensure and enable the conformity with the principles of EITI (NEITI 2018). Civil Society in the NEITI Process In the six decades since the discovery of oil in the Niger Delta, no other civil society organization has acquired greater international notoriety than the Movement for the Survival of Ogoni People (MOSOP), especially for its dealings with the Nigerian government and the multinational oil corporations. The civil society partnership in the NEITI process gives them roles that can improve public participation in the decision-making process, which strengthens accountability, enables good governance, and promotes democratic principles. In the NEITI process, around 60 civil society organizations and 13 professional associations were involved in the NEITI process across Nigeria, and they all had several roles to play within the NEITI process. Similarly, there are also nine general roles of civil society in the EITI process: 1. Identification of poignant issues of public interest related to NEITI mandate, extractive revenue transparency, governance processes and ensure that identified issues are brought to the forefront of the public domain (dialogue, discourse, and discussions). 2. Agenda setting as a traditional responsibility for the engagement of key issues related to the NEITI mandate. 3. Public education and enlightenment of communities, professions, and thematic areas to influence the language discourse that people can easily understand. 4. CSOs (Civil society Organizations) acting as agents of change and social mobilization that can enable public buy into the NEITI or EITI process. 5. Close monitoring and oversight of programs, policies, and current unfolding events in the Nigerian extractive sector. 6. CSOs offering effective advisory functions to NEITI in the implementation of the EITI in Nigeria.

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7. CSOs are most suitable in the whistleblowing of corruption, bribery and fraudulent malpractices by any individual group, organizations and institution at any stage in the NEITI process. 8. Observation of the activities of the NEITI/EITI process in consultation with the secretariat: annual budgets, budget preparations, procurement processes of major projects, meetings, and public engagements when deemed necessary. 9. Tasking many CSOs with providing feedback to the respective representative constituency and the larger Nigerian public on the outcome issues that they are concerned with.

Impact of Civil Society’s Work There are signs that these global frameworks and civil society’s efforts are beginning to yield dividends. Abundant evidence exists to show that as a result of the pressure applied—both above, through the efforts of various global frameworks, and below, from domestic civil society—key stakeholders, including governments and multinational oil companies and other providers are now paying more attention than ever before to domestic concerns and to their corporate social responsibilities. Almost all foreign companies in the subregion now operate a web of development projects through which they allocate funds and technical assistance for various development projects. Civil society and international nongovernmental organizations have been most successful in articulating minority rights. In the 1990s the Nigerian oil industry was rocked by a series of uprisings by ethnic minority groups in protest over what became of the oil wealth. One of the most prominent of these was the Ogonis, an oil-producing ethnic minority group in oil-rich southeastern Nigeria. All throughout the Niger Delta, minority nationalism was taking hold. Several other oil-producing minorities, including the Ijaws and Itisekiri, began demanding more equitable power-sharing structures. In what became known as the Warri Crisis, six Shell installations were taken over by protestors. The plight of these ethnic minorities became a cause célèbre for various civil society groups, including Amnesty International and Human Rights Watch. The litigation efforts on the part of the international NGO Land Rights illustrate the growing influence of nongovernmental organizations and civil society groups in shaping policy decisions. In June 1999 Shell

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was forced to pay a total of $15.5 million as compensation to the descendants of Ken Saro-Wiwa and the eight other Ogoni leaders executed by the Nigerian government, with Shell complicit. In January 2011 various civil society groups from Francophone Africa (which makes up nearly 45% of EITI-implementing partners) met in Ouagadougou, Burkina Faso, to assess implementation in their countries to date. This meeting offered civil society, drawn from Senegal, Burkina Faso, Gabon, Guinea, Democratic Republic of Congo and Côte d’Ivoire, the opportunity to share their experiences; discuss new rules and specific measures to increase transparent management of oil, gas, and minerals; and devise ways of improving quality reports in individual countries, and of increasing public awareness of the initiative. Without a doubt, meetings like this have helped open up the space for civil society engagement to continue to promote a culture of transparency among industry stakeholders. The work of other organizations highlights the success of civil society in this domain. Founded in 1999, Leadership Watch Nigeria aims to influence and hold accountable by promoting good corporate governance through research, capacity building, leadership development, conferences, lectures, and awards. Its core mission is to foster accountability by building and developing leadership capacities, thereby engendering role models in all spheres of society, to the public benefit. The organization is a member of the Global Compact and has ExxonMobil as a “partner,” which implies the latter is a funder of their activities. Through its public impact and strategic litigation efforts, Nigeria’s Socioeconomic Rights and Accountability Project (SERAP) (2019) regularly brings cases before various judicial bodies including Nigerian courts, ECOWAS Court, African Commission on Human and Peoples’ Rights, and the African Court on Human and Peoples’ Rights. Through these channels, it raises “issues of fundamental importance in human rights and anticorruption laws and standards, and potentially can help to influence positive legal reforms, policy development jurisprudence or shape public opinion” (SERAP 2019). The work of World Wildlife Fund, the world’s leading independent conservation organization, aimed at creating a world where people and wildlife can thrive together illustrates the concerns of international NGOs for ethnic minorities in oil-producing countries. Together with the Nigeria Conservation Foundation, the group helped to draw attention to the environmental pollution in the Niger Delta.

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Another success can be seen in the work of the Ghanaian consortium the Civil Society Platform for Oil and Gas. Through the financial support of Hewlett Foundation and Oxfam America, the Civil Society Platform on Oil and Gas was formerly launched in 2009 as a loose alliance designed to coordinate Ghanaian civil society groups active in the oil and gas sector. The Platform has an active membership of 60 organizations and 124 individuals from diverse walks of life. It aims to harmonize civil society’s positions, as well as coordinate their voices and actions, as a way to create the desired impact on petroleum governance. The consortium organized a series of consultative workshops for groups, institutions, and individuals interested in the oil and gas industry to learn more about it, and to make an informed contribution to the public discourse around oil and gas governance. As a result of civil society pressure, Shell Plc, the largest major operating onshore, started publishing data on all oil spills in the Niger Delta. The data shows that out of 13 oil spills in the Niger Delta in January of 2011, which was the first year the data became available, 10 were caused by “sabotage/theft,” and the other three from what the company described as “operational” factors. 128 such oil spills, which the company attributed to sabotage and vandalism were recorded in 2018. The data comes complete with photos of the incidents as well as the types of remedial action taken by the authorities. On average, it took the company about a month to clean up oil spills (Shell Oil Spill Data 2019).

Weaknesses and Limitations: Persisting Challenges Despite the successes recorded in promoting transparency, civil society groups involved in the fight against corruption in the oil industry face significant challenges. They are constrained by lack of funding and harassment and in some cases death by state functionaries and their supporters. Providing the requisite tools and training for professional and citizen journalists to foster transparency and accountability in a relatively new and highly complex oil industry is critical to consolidating the region’s democratic gains. Given that the sector has little coercive power, it lacks the requisite tools to force the region’s governments to use oil revenue in transforming the lives of the population in a fair and equitable manner. For many, harassment and threats to their lives are not rare. These pressures

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include physical harassment as well as the initiation of criminal investigations, surveillance, defamation, burdensome registration requirements for NGOs, the stricter regulation of foreign funding for NGOs, the restriction on demonstrations, and the more general exclusion of civil society. According to some commentators, civil society space currently faces an emergency situation, given the many new restrictions put in place in various countries all over the globe in recent years (CIVICUS 2016, p. 7). The groups themselves are susceptible to corruption. In Nigeria and Angola coercion is not uncommon. In Senegal, Mali, and other Francophone countries, civil society groups were at the forefront of calling for revenge, retaliation, and punishment for political leaders in charge of their respective countries since independence. This approach, Monga (1993, p. 373) argues, sets a “negative tone for the political debate, not least by limiting the type of issues which are brought to the forefront.” A 2009 World Bank report outlined the challenges that civil society needs to address to become relevant in the extractive industry discourse. Though the recommendations were largely in reference to its engagement with the EITI process, it offers some instructive lessons on the general issues facing the sector as it strives for a coherent voice. One of the fundamental challenges includes defining civil society vis-à-vis the extractive sector. Beyond their nomenclature however, the horizontal and vertical relationships between the various stakeholders and civil society is key to the latter continuing to make the requisite impact in the extractive industry.

Conclusion This chapter has outlined the critical role of West African civil society in fostering transparency and accountability in the region’s emerging petroleum industry. At the local, national, regional, and international levels, various nongovernmental organizations are engaged in making the oil industry deliver its goal of becoming a partner for sustainable development. The collective efforts of various agencies have shown that a critical voice is required to keep the industry responsive to people’s needs (CIVICUS 2006). The agency of local civil society has created avenues for engagement with some of the most critical agents in the region and globally, through various global frameworks for preventing corruption. They are thus prerequisites for good governance and the main channel for

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promoting durable peace, justice, accountability, and sustainable development in the region. Local knowledge is particularly critical. I have also argued that civil society is also racked with numerous problems that limit its effectiveness, including funding volatility and government interference. In spite of these shortcomings, evidence shows that the region’s civil society is indispensable to preventing and managing West Africa’s resource curse. For ensuring a “responsible” petroleum industry, one that promotes peace and sustainable development, their indigenous knowledge is critical. To continue to maintain relevance, local civil society needs to establish meaningful linkages with the communities they purport to represent. This is critical not just for financial accountability but also for moral accountability. As Lederach (1995) rightly argued, participation enables individuals, organizations, and communities to assume responsibility for their own welfare and that of their community. Citizen participation in community life is essential to developing identity, meaning, and self-worth (Burton and Dukes 1990; Kanyako 2018). There is evidence that their monitoring role is beginning to yield dividends. The collective efforts of these organizations have achieved significant improvements in the provision of information to the public about the oil sector, especially with regard to transparency in revenues. For example, through the pressure applied by these various organizations, Royal Dutch Shell now publishes a list on its website of all the oil spills that it causes. The combined and continued collaboration of both regional civil society organizations—like the Platform in Ghana and NACE in Sierra Leone as well as external organizations such as Human Rights Watch, Publish What You Pay, and the Extractive Industries Transparency Initiative—is key to mainstreaming civil society engagement in the region’s petroleum industry.

References Ake, Claude. 1987. The African Context of Human Rights. Africa Today 34 (1/2): 5–12. Burton, John and Frank Dukes. 1990. Conflict: Readings in Management and Resolution. UK: Palgrave Macmillan. CIVICUS. 2006. Organizational Report and Strategic Planning. Available at http://www.civicus.org/view/AnnualReport2006/orgfuture.html.

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CIVICUS. 2016. State of Civil Society Report 2016. Available at http://www. civicus.org/images/documents/SOCS2016/summaries/SoCS-full-review. pdf. Accessed October 9, 2018. Ekiyor, Thelma. 2008. The Role of Civil Society in Conflict Prevention: West African Experiences. Available at https://gsdrc.org/document-library/therole-of-civil-society-in-conflict-prevention-west-african-experiences/. Accessed November 17, 2019. Extractive Industries Transparency Initiative (EITI). 2019. Cote d’Ivoire Country Overview. Available at https://eiti.org/cote-divoire. Accessed March 16, 2019. Ibeanu, Okechukwu. 2006. Civil Society and Conflict Management in the Niger Delta. Cleen Foundation Monograph Series. Lagos: CLEEN Foundation. Ikelegbe, Augustine. 2005. Engendering Civil Society: Oil, Women Groups and Resource Conflicts in the Niger Delta Region of Nigeria. The Journal of Modern African Studies 43 (2): 241–270. Kanyako, Vandy. 2018. Civil Society and Democratized Peace in Postwar Sierra Leone. In Democratization and Human Security in Postwar Sierra Leone, ed. Marda Mustapha and Joseph J. Bangura, 163–176. New York: Palgrave Macmillan. Labarca, Guillermo. 1998. Workforce Training in Latin America. Revista de la CEPAL No. 67, Santiago, Chile. Lederach, John Paul. 1995. Preparing for Peace: Conflict Transformation Across Cultures. Syracuse: Syracuse University Press. Monga, Celestine. 1993. The Rules of the Game in African Political Markets. Extracts from Anthropology, Civil Society and Demography in Africa, Unpublished Manuscript. Nigeria Extractive Industries Transparency Initiative (NEITI). 2012. Available at https://www.neiti.gov.ng/index.php/neitiaudit/category/162-2012audit-report. Accessed June 12, 2018. NEITI. 2018. Annual Progress Report. Available at https://eiti.org/document/ neiti-2018-annual-progress-report. Accessed July 5, 2019. Shankleman, Jill. 2006. Oil, Profits and Peace, Does Business Have a Role in Peacemaking?. Washington, DC: United States Institute of Peace. Shell Oil Spill Data. 2019. https://www.shell.com.ng/sustainability/ environment/oil-spills.html. Accessed August 5, 2019. Socio-Economic Rights and Accountability Project (SERAP). 2019. Annual Report. World Bank. 2009. World Bank: Data. Available at http://data.worldbank.org.

CHAPTER 7

Managing Disputes in West Africa’s Petroleum Industry

The Inevitability of Conflict in the Oil Industry The ongoing economically viable discoveries of oil in West Africa have increased tensions and reignited hitherto latent tensions between various state and nonstate actors. From Senegal to Ghana and Equatorial Guinea, oil-related disputes over maritime boundaries, oil contracts, and resource proceeds distribution and allocation have all become part of the landscape of a rather volatile region. The increasing tensions in West Africa are best understood as part of a developing regional conflict over natural resources in general, and not just oil. Although oil and natural-resourcerelated conflicts are not new to West Africa, the scope and potential of the new discoveries mean that recent tensions represent new forms and attempts at resource capture and control. Two points need to be outlined from the outset. One is that conflict, defined as a divergence of interest between two or more parties with an ongoing relationship, is normal, and an inevitable part of everyday interaction. It happens in every setting, whether interpersonal, community, national, or global. In that respect, the fact that conflict happens in the oil industry should not be surprising. It is also important to point out that conflict is not always bad: where it is handled well, it can be constructive with some positive benefits. Conflict fosters communication, prevents premature decision-making, and generally pushes parties to adopt more cooperative approaches to resolving disagreements. The goal of conflict resolution therefore is not to avoid all distributive struggles but instead © The Author(s) 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5_7

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to manage them in ways that increase the peace properties of oil. It is in recognition of this singular fact that all petroleum contracts contain a dispute or conflict resolution clause, often several pages long, that outlines the various tools acceptable to the primary parties. The mechanisms used to manage disputes around oil issues are just as varied as the conflicts they spur. A combination of multitrack diplomacy, including the highest level of negotiations, often referred to as track 1 (state level and formal diplomacy) and track 2 diplomacy (nonstate level and informal diplomacy), have been applied to quell or reduce oil-induced and other natural-resource-based conflicts. At the track 1 level, states use traditional diplomatic channels to address their differences. This can be done either bilaterally or multilaterally, through the engagement of international agencies such as the International Court of Justice or the Economic Community of West African States. Given the complexity of the issues around oil, the multiplicity of channels utilizing both foreign and African mechanisms of dispute resolution is inevitable and likely to be essential if resource-curse conflicts are to be sustainable. A host of factors makes oil conflicts inevitable. The sheer number of interests (political, economic, social, etc.) and the plethora of stakeholders with powerful interests vastly increase the potential for misunderstanding and, hence, conflict. Due to the complex nature of petroleum transactions, oil extraction and conflicts are made for each other. A typical petroleum contract takes more than 100 signatories to consummate, partly because there are all manner of contractors and participants with whom negotiations would have to be entered during the life cycle of a petroleum contract. The wide array of actors range from companies that provide critical services—seismic data gathering and analysis, prospecting, transportation, refining, construction and management of oil platforms, security—to those engaged in trading as well as regulators, lenders, engineering firms, banks, and various multilateral organizations including the United Nations and the World Bank. The abundance of actors increases the opportunity for a wide array of conflicts. The number of issues and diametrically opposed interests contribute to conflict in the oil industry. At the heart of an oil regime is profit, the foremost interest of investors, who often want to recoup their investment at the soonest opportunity. The producer or host government, on the other hand, is concerned with sovereignty, resource nationalization, and of course funds for national development. But oil extraction also involves

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people. Its mode of extraction affects people and communities in profound ways. As such, because of its pervasive influence, it often generates controversy around issues such as human rights, justice, the environment, good governance, democracy, and socioeconomic development. Apart from the wide array of stakeholders and varied, sometimes overlapping interests, there is the issue of time, or the lack thereof. In the oil industry, in particular, the adage “time is money” holds true. Petroleum contracts are generally long-term agreements that typically last for between 20 and 25 years. Such long-term commitment between parties from a multiplicity of countries, operating from different time zones, engenders conflicts and disputes. This may be due to foreseen as well as unforeseen circumstances: instability in the host country such as the 2014 Ebola epidemic, or a change in government or leadership such as in Angola, where João Lourenço, who took over in September 2019, has made the fight against corruption difficult, especially in the oil industry. Finally, the oil industry is governed by a hierarchy of laws, both national and international. Perhaps as a result of this plethora of legal regimes, the very laws that are meant to streamline processes and decisionmaking and minimize conflicts can themselves become a source of conflict. Parties can sometimes disagree over which law should take primacy and where to adjudicate, should a dispute arise. The constitution of the producer government (the main custodian of the resource) often takes primacy over all other agreements (Open oil 2012). This advantage contains the seeds of conflicts.

Types and Nature of Oil-Related Conflicts Oil generates all types of conflicts between and among the varied stakeholders, both domestic and international. As various actors jockey for control of oil proceeds, there are conflicts between the government and the community, between the Oil Company and sections of the community, and within the communities themselves. Three main types of energy conflicts are discernible in the region: (1) petroleum-contract-related disputes, (2) borders and maritime conflicts, and (3) conflicts around needs and expectations. I will expand on this varied conflict typology. but suffice it to say that for a complex industry such as oil, the interests, issues, and actors are multifaceted and intertwined. It should also be pointed out that these conflicts occur at all levels of engagement: the community, national, regional, and international levels and are nonlinear, overlapping

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and interacting in different ways and at different stages of the oil contract. So this analysis takes into account the fact that every typology comes with a caveat simply because the issues cannot fit into neat categories. The bottom line is that as many countries face rising costs and a stagnating economy, the ongoing discoveries will complicate interstate relations in the region. Countries squabble over the ownership and distribution of the oil resources, the value of which will certainly be in the hundreds of billions of dollars. Contract-Related Disputes In any petroleum regime, contracts meant to clarify and outline relations, can actually cause discord. The most common and perhaps the most important of these types of disputes is the conflict between the two primary parties to an oil contract: the host government, usually through its national oil company (NOC), and an IOC or a consortium of IOCs, variously referred to as “contractor,” the “licensee,” or the “concessionaire,” depending upon the type of the petroleum contract entered into. The contract between the government (on behalf of the nation and its people) and an oil company or companies (which are being hosted) is termed the “Host government contract,” the agreement through which the host government legally grants rights to oil companies to conduct “petroleum operations” (Open oil 2012, p. 21). The contract also spells out the relationship between the major stakeholders and other peripheral actors, especially at the community level. As a matter of fact, while the majority of oil contracts signed between IOCs and producer governments deal mainly with the financial and technical aspects (disagreeing over who pays for what, when, and how much) of oil extraction, they also increasingly deal with the concerns of stakeholders. Because these two key stakeholders are often the primary signatories to the key agreement that governs the petroleum regime in the country, how they resolve their differences usually has major bearing on the rest of the industry. As in the case of Shell in Nigeria, their actions usually have major implications for communal relations in the Niger Delta. As discussed in Chapter 4, oil-producing communities, who are at the bottom rung of power pecking order, are not primary parties to petroleum contracts but are nevertheless negatively impacted by the mode of extraction and distribution. Conflicts often arise between the primary parties (those who agree to be bound by terms and conditions). Ethnic groups compete for

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access to the oil wealth, and conflicts arise between locals and outsiders drawn to the oil exploration sites—or even between community members and the central government or the oil companies around their own share of the proceeds (Table 7.1). The other dimension of contract disputes are those that occur between primary stakeholders in the oil industry. These types of conflicts broadly fall into three main categories: disputes between investors and the host state; disputes between investors; and disputes between investors (typically via operators) and third parties (e.g., oilfield services providers, insurers, or local community (Beeley and Stockley 2010). In spite of best efforts and due diligence in designing oil contracts, including the insertion of dispute resolution clauses in the contract, however, conflicts still occur—and on a daily basis. The nature of the conflict that can arise from petroleum regime contracts is of two kinds: one over rights and the interpretation of those rights as outlined in the petroleum Table 7.1 Types and nature of conflicts in the oil industry Conflict type

Core issues

Disputes between investors and host state

Uncertainty as to how to measure the various contractual commitments made What costs are recoverable before profit is allocated Length of contract Uncertainty over which legal domain holds primacy: Which law should apply? Who is legally responsible Tension between operator and non-operator Default in meeting payment obligations Rights of pre-emption or rights of first refusal Breaches of warranties Suspicion of supplying inaccurate or misleading information Overriding royalty interests Financial pressure Equipment failure Failure to meet deliverables, in a timely manner Rig share agreements and similar cost-splitting arrangements

Disputes between investors

Disputes with third parties

Source Author

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contract. As more African NOCs develop the technical skills to participate in the oil industry, they have started coming into conflict with long established investors and other upstart oil companies. In September 2009, Sonangol, Angola’s national oil company blocked the joint bid of the more powerful CNOOC-Sinopec for an oil block owned by Marathon Oil. Various international oil companies are finding that the region’s national oil companies and producer governments are increasingly raising their voice in negotiations, which brings them into conflict with other stakeholders (Vines 2010). Performance-Related Disputes Sometimes parties to contracts disagree over a host of other issues, including performance goals, the interpretation of certain stated clauses, or even clauses that are not included in a contract. These are collectively referred to in legal terms as disputes “over expression,” which arises because of vagueness or ambiguity in the language, such as compensation. In such a scenario, parties will disagree over the meaning of what they stated or over how their language applies to a situation. In the case of an oil spill, for example, the primary parties often squabble over whose responsibility it is and the amount of compensation to the victims. There are also disputes “over commission,” which Farnsworth (1968, p. 860) referred to as a situation in which parties disagree over what they did not say, over the effect of their contract on a situation for which they have failed to provide. Sometimes conflicts happen due to unforeseeable circumstances or due to performance. Generally, disputes arise when one party’s interpretation of a provision results in the other party having to spend more money or receive less money than it believes it should, or where one party believes that the other’s interpretations or actions deprive it of a significant benefit or right to which it was entitled (p. 871). Sometimes conflict arises from miscommunication. One major source of conflict is the valuation of commercial oil. If the price that a buyer paid was based on predicted reserves rather than actual hydrocarbons found, that becomes a recipe for conflict. Accusations of inaccurate or misleading information are not uncommon in an industry that can be so wildly unpredictable. Finally, there is the issue of deliverables and performance, especially if the work is done in bad faith or leads to negligence. Summers (1982) identifies six categories of bad faith in contract performance: evasion of

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Table 7.2 Colonial legacy: West Africa’s border disputes Parties

issue

Time frame

Method of resolution (with the technical assistance of the UN)

Guinea- Liberia Cote d’ Ivoire-Liberia

Mount Nimba region Cess and Cavally rivers Hodh desert 50-mile strip on the common border Entire stretch of border between the two) Sanwi-inhabited area of Cote d’ Ivoire

1961 1961

Bilateral agreements Bilateral negotiations

1964 1964

Bilateral negotiations Bilateral negotiations

1964

Bilateral negotiations

1964

Bilateral negotiations

Mauritania- Mali Ghana- Upper Volta (now Burkina Faso) Niger – Upper Volta (now Burkina Faso Ghana- Cote d’ Ivoire Source Author

the spirit of the deal, lack of diligence and slacking off, willfully rendering only “substantial” performance, abuse of a power to specify terms, abuse of a power to determine compliance, and interference with or failure to cooperate in the other party’s performance (Burton 1990, p. 371). In this sense, therefore, oil contracts, which are of varied kinds involving multiple parties, are key to understanding the nature and types of conflicts that arise among various stakeholders in the oil industry. One of the most common is those between producer governments and oil companies. Because these two key stakeholders are often the primary signatories to the key agreement that governs the petroleum regime in the country, how they resolve their differences usually has a major bearing on the rest of the industry (Table 7.2).

Territoriality: Border and Maritime Boundaries The second type of conflict that is common in the West African oil industry occurs around border delimitation and territorial claims. The causes of border disputes are numerous. The borders may be ill-defined or the defined borders shift. Also, politics play a role when governments use conflict with their neighbors to consolidate their hold on power. One of the most common and most protracted border conflicts, however, are economic in nature.

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The subregion’s border disputes may be classified into land borders and maritime borders. The former are often territorial in nature. Territorial disputes, Matthews (1970) reminds us, arises from one state laying claim to at least part of the territory of another. Territorial disputes can be further divided into irredentist and nonirredentist territorial disputes. Maritime disputes, on the other hand, are often positional disputes—border conflicts in which the boundary is incompletely defined (Matthews 1970, pp. 339–342; Kornbrobst 2002, p. 383). Most of West Africa’s maritime borders are either ill-defined or contested, and therein lies the problem. The ongoing discovery of oil has exacerbated conflict between and among state actors, especially around the border zones. Some of the most intense territorial conflicts in the region are driven by economic motivations. One of the core considerations of territoriality theory and the economic justification for territorial claims is the exploitation of raw materials for development. For this to happen and to be able to attract foreign direct investment, a territory needs land, sea, and air passages, as these are what constitutes a state (Sumner 2004, p. 178). Border disputes are not new to modern West Africa. Since the 1960s land and maritime boundary disputes have been a constant feature of state’s interaction in West Africa. The subregion has experienced no fewer than ten overt border disputes since the modern boundaries were established following the conclusion of the Second World War. Some of the border conflicts have deep historical roots, going back to the precolonial era. Both Guinea and Liberia claimed jurisdiction over the Mount Nimba region. Côte d’Ivoire and Liberia experienced tensions over the Cess and Cavally rivers. Liberia disputed both Guinea and Côte d’Ivoire borders when the two countries became independent from France (Kornprobst 2002), The oldest established African maritime boundary, which dates back to 1913, is between modern-day Cameroon and Nigeria. It came about when the colonial powers of Germany and the United Kingdom established a land boundary separating their African territories. The runner-up for the oldest established African maritime boundary is also in West Africa, between Guinea-Bissau and Senegal, which was established by Portugal and France in 1960. This type of border dispute is more political than economic in nature. The history and evolution of West Africa’s borders provide an indication of the nature of potential disputes over mineral resources. Africa’s modern borders are artificial creations, arbitrarily drawn up by European

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powers (finalized at the Treaty of Berlin in 1885) with very little consultation with the local populations. The borders were demarcated with the aim of preventing conflict among the European powers rather than with the interest of the locals in mind. For example, the Portuguese troops who helped found present-day Angola in 1575 stopped their expansion only after they reached Belgium, French, and British claims in Southwest Africa. In short, modern-day Africa consists largely of “invented nations,” cobbled together with little or no consideration for the ethnic or religious compositions of the local populations or with historical or even geographical realities. Unlike in other parts of the world, which made attempts to redraw their borders after independence from colonial rule, Africa’s independence rulers decided to leave their colonially inherited borders intact as a way to avoid widespread conflict (Fisher 2012). Not surprisingly, therefore, at independence (in the 1960s for the majority of countries) many African countries continued to be dissatisfied with the state of their borders, which created the potential for latent conflicts. While the issue of ill-defined borders has largely gone unchallenged, the new discovery of mineral resources has the potential to reignite latent conflicts, especially where minerals are found. The discovery of hugely profitable commercial oil off the coast of the Atlantic has heralded the start of a fresh round of tensions over statehood and natural resources in the region. Maritime areas that countries did not care about in the past are now suddenly heavily contested. Only two of West Africa’s sixteen states (Mali and Burkina Faso) are landlocked. The rest, including tiny Gambia, are coastal states, abutting the Atlantic Ocean. The fact that shallow, deep and ultradeep water is where the oil finds are located increases the chances of conflict, as every one of these countries clamors for a piece of the oil wealth. This is precisely what happened between Ghana and Côte d’Ivoire, two countries that have maintained close ties and friendly relations for most of their modern existence. When in 2007, however, Ghana discovered huge deposits of oil in its Jubilee fields, worth billions of dollars, tensions between the two neighbors flared almost instantly, with the two countries squaring up over 9000 square miles of sea and seabed that separated them. As Ghana proceeded to drill, Cote d’Ivoire threatened legal action against both the Ghanain government and against any foreign companies that participated in extracting oil in the disputed zones (Koigi 2017). Neither country is backing down. These commercial rights conflicts (case 23 at ITLOS) have been so intense that a series of high-profile meetings (more than 10 in total) have been held thus far without success.. The Ghana-Côte d’Ivoire conflict in

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many ways epitomizes the challenges and opportunities with oil-driven conflicts. At a petroleum conference I attended at the Accra Convention Center in Ghana 2016, several Ghanain presenters condemned the attempts by Côte d’Ivoire to claim portions of the maritime boundary that they considered to be rightfully theirs. One minister openly called for an all-out war if Côte d’Ivoire kept pushing its claims. The audience, which was largely made up of Ghanaians, clapped and hollered. The message resonated, a sign perhaps of developments to come if issues are not addressed proactively. The incidences of oil driving conflict in the region and the harsh rhetorics that accompany such commercial claims are not just confined to these two countries. The phenomenon is now spreading to other parts of the region. Even countries with the longest maritime relationships are now experiencing a fresh round of tensions. The shortest maritime distance in the region lies between Cameroon and Nigeria at 40 meters (0.024 miles). Yet even such negligible distance has not eliminated maritime conflict between the two countries. The two neighboring countries spent more than seven years in arbitration over competing ownership claims over the Bakassi peninsula and Lake Chad.

Community-Level Conflicts The third and final category of resource-fueled conflict concerns human security. Oil extraction often has a wide-ranging impact on stakeholders who are often not part of the formal documents signed between various parties. Hence, conflicts between oil companies or central government and oil communities are not uncommon. Compensation for the harmful effects of oil drilling, especially oil spillage, is a frequent flashpoint, particularly in Nigeria but to a limited extent Angola, and the marginal producers, such as Ghana and Côte d’Ivoire. In 2010, an estimated 706 barrels of oil was accidentally spilled in the Atlantic Ocean, with disastrous consequences for marine life. Ghana, for example, has recorded the large-scale death of whales, and the mysterious appearance of alien plants that pose a threat to the country’s fish stock in particular and its biodiversity in general (Obeng-Odoom 2014, pp. 124–127). The problem has forced some fishers to emigrate or abandon their trade altogether. Partly due to such trade emigration, the fishing industry in Côte d’Ivoire is heavily dominated (estimates put it at 80–90%) by people of Ghanaian

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origin. This migration has been exacerbated by the pressures the industry is facing from the oil industry, including oil spillage (Delaunay 1992). As people migrate in appreciable numbers in search of better economic opportunities and come into contact with other social groups, the chance for conflict increases exponentially. The increasing presence of Ghanaian fishermen in Côte d’Ivoire has exacerbated tension between them and the country’s coastal communities. Local pollution laws, such as the one introduced in Ghana as a way to curtail spillage and protect the fishing industry and marine life, have yet to stem the flow of oil spillage.

The Case for Cooperation Even though oil is prone to conflict, it also has the potential to promote cooperative behavior—and hence peace. The “Peace properties” of oil can foster understanding and promote intraregional cooperation, especially for a region prone to conflict. The discovery of oil has generated important cooperative approaches to managing differences between and among different stakeholders in the region. Countries are increasingly collaborating with one another to resolve all manner of differences in order to tap into the potential oil wealth that is buried beneath the Atlantic Ocean. This is particularly so in the case of the ill-defined EEZs which would require the cooperation of several countries to reach amicable solutions. As a matter of fact, many stakeholders in the industry are aware that cooperation, rather than a belligerent zero-sum game approach, in which one’s gain is another’s loss, is in everyone’s best interests. The economic arguments for cooperation are strong, argues Stocker (2012, p. 595). Conflict is expensive, requiring states to increase their expenditures on large armies to safeguard their territorial integrity and by extension natural resources. Strengthening the security sector would exacerbate tension in the region as more states would set out to do same, thereby creating a mini arms race of sorts. On the other hand cooperation between and among states could reduce costs associated with extraction. In the case of gas extraction along the borders of EEZs, shared pipelines and other infrastructure could increase profits and make the extraction of gas in certain areas more feasible. There are a number of tried and tested ways that states and nonstate actors in the oil industry have used to amicably resolve energy conflicts in the subregion. Some of the most common tools include bilateral negotiations, regional agreements, international legal mechanisms, and the use

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of independent third-party mediators. These approaches form the basis of the following sections of this chapter. Clarity in Petroleum Contracts One of the most common tools used in resolving conflicts is through the contractual agreements outlined in the petroleum contracts themselves. Here parties make deliberate efforts to clarify roles and expectations from the outset. In this regard, a petroleum contract could best be thought of as a conflict-prevention tool. Its dispute resolution section or clause often outlines in detail the parties’ expectations in contract language, oral, or written. This section sets out the rules for how the parties will resolve or settle disagreements as and when they arise. In such a contract, parties would outline the different mechanisms for resolving the dispute, including where and by whom. In most cases, parties would attempt to address the points of divergence themselves. This is because they realize it is in their best interest to do so, as it is quicker and offers confidentiality. When this fails, however, parties turn to third parties, either informally or through a formal adjudication process, to resolve their differences. In that sense therefore, petroleum contracts thus becomes the first line of action for addressing misunderstandings and overt conflicts. Bilateral Negotiations The subregion has a history of amicably resolving its border conflicts through bilateral or multilateral intra-African negotiations. One such example is the Cameroon-Nigeria Mixed Commission, established to manage the maritime disputes between the two countries. There are several examples of peaceful resolution of contentious disputes in the subregion. Ghana and Togo settled their border disputes and normalized relations in 1984. Both Benin and Niger, and Benin and Nigeria, settled their border disputes in the 1980s and 1990s, respectively. Equatorial Guinea and Nigeria reached mutual agreement over disputed Zafiro oil fields (Kornprobst 2002; Frynas 2004). There are several advantages behind parties’ opting to resolve conflicts bilaterally or multilaterally. The most obvious advantage is that it is far cheaper and less prejudicial to the relationship than calling in outsiders. Also, with just two main protagonists, the negotiations would tend to be less protracted and thus relatively easier to resolve. It is only when that

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appears to be impossible due to any number of factors (political, economic, etc.) that parties resort to other dispute resolution mechanisms. Equatorial Guinea and Nigeria utilized bilateral negotiations to resolve their maritime disputes. In a little over two years, the two countries agreed on a single maritime boundary. Nigeria and Cameroon used a bilateral approach to reduce tensions in their maritime conflict over the Bakassi peninsula. Regional Agreements When bilateral agreements fail or do not provide adequate results, parties sometimes resort to regional agreements to resolve their differences. The first of these is a regional process of negotiations that can deal with all of these energy issues at once. The Mano River Union (MRU) and ECOWAS are examples of such bodies that provide an avenue for countries to resolve their differences. Both institutions were established by treaty in 1975 to promote the economic and political integration of their members. Unlike the MRU, whose membership is restricted, ECOWAS is open to all West African states. In its goal of promoting the socioeconomic and political welfare of its member states, its core mandate is not much different from that of the MRU. The various countries in the region continue to collaborate on issues of economic development, peace and stability, and the promotion of democracy and good governance. For example, the ECOWAS Political Affairs Directorate, together with the Secretariat of the MRU and the Office of the United Nations for West Africa and the Sahel (UNOWAS), organized a two-day workshop for the promotion of peaceful and credible elections in Liberia in Monrovia on the 28th and 29th of August 2017 (ECOWAS Press Release 2017). The biggest achievement of all, and one for which ECOWAS is best-known lies in the peace and security sectors. This is perhaps a bit of an irony, given that the organization started first and foremost as an economic entity. The ECOWAS Monitoring Group (ECOMOG) was the end result of these efforts, which built on the 1978 nonaggression pact and the 1981 and 1999 mutual aggression protocol and conflictprevention mechanisms, respectively. It played an active role in resolving the conflict in Sierra Leone, Liberia, Côte d’Ivoire, and to a lesser extent Guinea-Bissau. In Côte d’Ivoire, ECOMOG sent 1500 troops to maintain the peace following the election crisis. All countries of the MRU played critical roles in helping establish and sustaining ECOMOG.

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The first operational headquarters was established in Lungi, Sierra Leone. Guinea and Sierra Leone contributed troops, while Côte d’Ivoire, which was not yet a member of the union, played host to some of the peace talks, especially regarding the Sierra Leone civil war. These regional bodies provide an outlet for African governments to take the initiative in resolving conflicts on the continent. But not all conflicts are ideal for resolution through regional bodies such as ECOWAS or the MRU, especially in the case where one or both of the parties are not African governments or institutions. In that case, conflicting parties often turn to international law to help address their differences. Regional mechanisms are not always the most ideal for certain conflicts, especially ones in which at least one of the parties is international, which is often the case in oil conflicts. In addition to avoiding the political complications of bilateral agreements, there are several advantages to using such international mechanisms. The issues involved require specialized expertise that the states of the region may not possess. It also prevents the possibility that the maritime borders will become tied up with other issues between the disputants. For these reasons, even friendly states have often called on international mediation, including international law, to resolve disputes.

International Mechanisms There are a wide variety of mechanisms at the international level for settling oil-related disputes. One of the most important of such agencies is the United Nations, which has created several legal instruments to help stakeholders address their differences in an amicable manner. Article 74 of the United Nations Convention on the Law of the Sea (UNCLOS) mandates that states party to the convention should determine their borders in an agreement on the basis of international law. It further admonishes parties to resolve such differences within a “reasonable period of time.” In Part XV it lists four mechanisms for resolving such disputes: the International Tribunal for the Law of the Sea, the International Court of Justice, arbitration by a special arbiter, or arbitration by a panel of experts approved by the states party to the convention. These mechanisms are also available to states that are not UNCLOS members (Stocker 2012, p. 596). West African countries, including Equatorial Guinea and Gabon; Cameroon and Gabon, respectively, have made extensive use of such legal

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mechanisms by turning to the United Nations to assist with the resolution of their border disputes. However, even international mechanisms for resolving conflicts have their limitations. One challenge they often come up against is the lack of political will. In a situation where political actors view international efforts with suspicion or skepticism, chances are such efforts will struggle to create the desired effect. That is the case with Equatorial Guinea and Gabon who both showed a willingness to negotiate in the beginning but failed to follow it up with the requisite political will. The Cameroon-Gabon conflict was succumbed to the same inertia fate. In short, the process is only as good as the willingness of the participants to negotiate in good faith. Use of Statecraft: Sanctions and Embargoes In addition to these international legal mechanisms, third-party mediators such as the United States and the European Union have informally tried to help resolve the disputes. States can impose sanctions or use other measures that can force the parties to the negotiation table. Big powers such as the United States have a battery of tools of statecraft that they can use. For example, in 1993 the United States imposed a series of economic sanctions on the Unita movement in Angola to pressure it to comply with a United Nations– brokered peace agreement with the government. The sanctions ordered by President Clinton included a freeze on Unita’s assets in the United States and a ban on the import of Angolan diamonds that are not certified by the Angolan government. Sales of mining equipment to Angola are also banned (BBC News 1998). In November 1995, the European Union, together with the United States, imposed an arms embargo on the Nigerian government following the execution of Ken-Saro Wiwa, the intellectual head of the Movement for the Survival of the Ogoni People and eight pro-democracy campaigners following their spirited campaign against oil pollution caused by the drilling activities of Shell. Following the hugely unpopular executions, which garnered worldwide attention, Nigeria’s membership in the Commonwealth was rescinded, and its leaders barred from entry into Europe, the United States, and Commonwealth countries (SIPRI 2012). The Nigeria-Equatorial Guinea conflict over the Kanga/Zafiro fields, show the protracted nature of oil disputes in the region. Zafiro to the

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Equatorial Guineans and Kanga to the Nigerians is of strategic importance to both countries as it straddles their joint borders. It is of critical importance to Equatorial Guinea because it is it’s largest and most valuable oil field. Nigeria laid claim to it not only because it straddled its borders but also because the field had been discovered by the French oil company. Elf under a Nigerian license. After a robust international intervention under the auspices of the United Nations, both countries agreed to a joint exploitation of the resource (Daniel 2002, p. 3). International Arbitration When parties fail to reach some kind of agreement on their own, either through mediation or bilateral negotiations, they often take it to arbitration—a legal action short of litigation where a third party with binding powers makes a ruling. For oil companies and other investors, arbitration is more advantageous to litigation. First, it can and is often held in a neutral country that none of the parties are from. This assures the belligerents that the process will not be subject to undue political pressure and that it is neutral and fair. Second, arbitration offers a high degree of confidentiality, protecting against the revelation of trade secrets, which would be damaging for a business like an oil company. For a producer government, the advantage of having the proceedings in another country, away from home, helps reduce domestic media attention and keep at bay local political rivals who may otherwise want to use revelations in the process to their advantage. Thus, the choice of venue for arbitration matters for all parties. Regardless of where the arbitration takes place, the country in which the petroleum contract was signed applies. Arbitrations are often conducted in accordance with the rules of a particular arbitration organization, of which there are many. The most recognized international arbitration norms applied to addressing protracted oil conflicts such as those in West Africa include the UNCITRAL Rules, the London Court of International Arbitration Rules (LCIA), the International Chamber of Commerce Rules (ICC), and the rules of the International Centre for Settlement of Investment Disputes (Delaume 1981, p. 794; ICSID p. 178; Open oil 2012). Several regional disputes have been resolved through such arbitrative mechanisms. After several attempts to bilaterally negotiate their border disputes Guinea and Guinea-Bissau on February 14, 1985, agreed to submit their dispute for binding arbitration to the International Court

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of Justice at the Peace Palace in The Hague. The dispute came about as a result of speculation that the contested area contained commercial oil. For the two non-oil-producing countries the prospects of finding oil was too tempting to ignore. Pressure from the oil companies who had refused to explore in a contested area forced the parties to amicably settle their differences. In addition to the diplomatic efforts, both governments agreed to redress their grievances through peaceful means and to jointly exploit any petroleum resources that might be found in the contested area. On March 6, 1986, the presidents of Guinea and Guinea-Bissau issued a joint communique on cooperation for mutual benefit of their countries (Pietrowski 1986, p. 251). In another landmark case, both Ghana and Côte d’Ivoire sought redress through international arbitration over their maritime disputes. In early 2015, the two states agreed to submit the dispute for binding resolution by ITLOS. The case was presided over by a special chamber of ITLOS comprising five members. After a five-month review of documents and submissions by a team of international lawyers on both sides, the tribunal ruled in favor of Ghana, awarding it all of the oil and gas fields known as TEN (Tweneboa, Enyenra, and Ntomme), estimated to hold 2 billion barrels of oil and 1.2 trillion cubic feet of natural gas (Koigi 2017).

Litigation Using the court system to bring legal action against other parties is common in the oil industry. Various stakeholders have often resorted to the judicial system to resolve conflict through litigation. West Africa has witnessed a raft of legal measures put in place by various parties. One of the most pronounced of these is the Cameroon v. Nigeria legal battle in the International Court of Justice. It all started in 1994 when Cameroon lodged proceedings against its bigger and more powerful neighbor, Nigeria. Cameroon’s application with the ICJ requested that the court award it the oil-rich Bakassi peninsula and a small strip of land on Lake Chad. It also asked the Court for Nigerian troop withdrawal from the contested areas and for compensation over damages suffered as a result of Nigerian shelling. After more than six years, the court ruled in favor of Cameroon, relying largely on the historical 1929–1930 Thomson-Marchand Declaration between the United Kingdom and France, which had made a detailed delimitation of the interstate border. The court thus awarded the territory to Cameroon. The court ordered each party to demilitarize the contested

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areas, while at the same time turning down the two countries claims and counterclaims for state responsibility and compensation (Sumner 2004, p. 103).

Maritime Conflicts The ongoing discovery of oil and gas on the subsoil and in the seabed of the Atlantic Ocean has focused attention on the region’s maritime boundaries. As outlined elsewhere in this book, most of West Africa’s major oil finds (such as the Jubilee fields in Ghana) are offshore, in the Atlantic. This spectacularly find has led littoral states in the region to pay keen attention to their maritime boundaries. The end result enlargement of national limits of maritime jurisdiction has been a rush to establish EEZ ownership (which grants countries rights up to 350 nautical miles offshore), in a bid to increase their acreage potential. Such maritime scramble, largely driven by economic motivations around the discovery of oil and gas, has ratcheted up tension between coastal countries with overlapping claims that hitherto paid very little if any attention to its sea borders. The fact that most of West Africa’s countries have maritime boundaries makes the situation more contentious and a future flashpoint. In this sense, therefore, it is not an exaggeration to state that oil (and gas) in particular is at the heart of maritime border disputes in West Africa’s coastal region. Overlapping claims in potentially highly profitable oil-rich waters may inadvertently lead to armed confrontations (Anderson and Browne 2011; Okonkwo 2017, pp. 56–57). Examples of such maritime disputes (real and imagined) that may inadvertently lead to conflicts, are already discernible in the region. Equatorial Guinea has laid claims to explore for and produce hydrocarbons area of sea surrounding Annobón. Needless to say, neighboring countries have contested those claims, which would expand Equatorial Guinea’s territory exponentially. Both Nigeria and Cameroon, two countries with the oldest modern border in the region, and to a lesser extent Sao Tome and Principe, are laying claims to the same potentially oil and gas-rich Island Zone (Clarke 2008, p. 78). with an estimated 34 billion barrels of oil in its maritime boundaries., the country is hoping to become a midlevel oil producer. The waters around the Annobon island are important to that goal. What then is the way forward? How can these varied methods be enhanced and made more sustainable?

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The Conflict and Peace Properties of Oil Huge strides have been made in mitigating full-blown conflict in the region. To build on these successes, a new approach to our understanding of the pervasive power of oil is necessary. But any conflict resolution technique needs to be all-inclusive and would require a reconceptualization of natural resources and how states and other parties in the energy sector view and understand them. Countries experiencing disputes over oil often have two basic options: to cooperate toward common ends or to work independently and defensively. The influence and pervasive power of oil is such that it can make either peace or war very easily. History teaches us that nations with vast amounts of oil wealth and large standing armies find it easier to go to war in defense of critical natural resources. In that vein, oil plays a dual role in promoting cooperation (or conflict) in international relations. In realpolitik, the power and control that oil bestows to its owners can be exercised either cooperatively in a way that addresses the concerns and assuages the fears of other stakeholders. Alternately, oil’s vast powers can also be used in an exclusive manner, by which other stakeholders are left out of the management of proceeds. It is precisely because of this that the various relationships engendered by oil are often considered among the most important cornerstones of regional and international relations, both economic and political (Palazuelos 2012, p. 301). The complexity of petroleum extraction (time, nature of contracts, number of stakeholders, critics, etc.) means that no single conflict resolution approach will suffice in addressing the multiform issues associated with petroleum conflicts in the region. Several actors at the national, regional, and international levels are engaged in resolving or preempting the oil-driven conflicts mentioned in this book. They are using a multiplicity of models and tools, ranging from grassroots engagements to bilateral negotiations to high stakes international mediation and even litigation. External agencies engaged in conflict resolution need to bring creative solutions to bear on addressing the complicated issues with oil revenues, but surely international law and international institutions can help prevent conflict and maintain peaceful relations between states in the region. If handled properly, a combination of these tools will ensure these resources are extracted in a manner that is economically viable, safe, and beneficial to all. The key to understanding the various tools in use in addressing conflicts is the multitrack diplomacy proposed by the institute of the same

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name. The Institute for Multi-Track Diplomacy, based in Virginia, identifies nine tracks as the basis for mapping out a holistic and participatory approach to assess the key variables in deep-rooted conflicts and postconflict settings. These are government (track 1); nongovernmental organizations (track 2); business or commerce (track 3); private citizens (track 4); research, training, and education (track 5); activism through advocacy (track 6); religion or faith in action (track 7); funding (track 8); information, communications, and the media (track 9). All nine tracks have helped shape the peacebuilding processes in West Africa. The two most important of these nine tracks, however, especially regarding protracted oil disputes, are the Track One official government and diplomatic efforts at peacemaking, and the second, which deals with the efforts of professional nongovernmental organizations at conflict resolution. Track 1 is traditional diplomacy as a tool of statecraft used to promote peace. It is one of the oldest forms of official conflict resolution among state and nonstate actors. Track 2 diplomacy, on the other hand, is more fluid. The nongovernmental actors using this tool analyze conflict in order to prevent, manage, and resolve different forms of destructive disagreements. A combination of track 1 and track 2 diplomacy have been applied to quell or reduce oil-induced and other natural resource-based conflicts (imdt.org). At the track 1 level, the Chad-Cameroon pipeline is emblematic of the joint policy efforts designed to help countries manage proceeds from their natural resources and in the process ameliorate the resource curse phenomenon. The project took 10 years to complete (1993–2003), at a cost of $3.7 billion. With two governments as stakeholders, the World Bank as lender and guarantor, and a group of INGOs including ExxonMobil (40%), Petronas (35%), and ChevronTexaco (25%) as joint operators. Pegg (2005, p. 10) described it as “the World Bank’s most significant attempt yet to modify the intervening variable of government policy and transform the equation from one of resource extraction + bad governance − poverty exacerbation to one of resource extraction + good governance − poverty reduction.” In spite of this planning, coordination, and due diligence, however, the project was not without its flaws. It had “vague poverty reduction goals” with the revenue management laws covering only some aspects of the proceeds (Pegg 2005, p. 12). Most importantly, perhaps, the two governments gradually became unwilling to abide by earlier commitments to use the proceeds for pressing needs such as education, health, and rural

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infrastructure. This lack of political will coupled with the lack of public discussion and human capital indicates that even the best-laid plans in the oil industry can run into problems, both anticipated and unforeseen. States have also gradually turned to the African Union and the regional politico-economic body, ECOWAS, to resolve oil-related disputes and promote cooperation and economic development in the subregion. Under the leadership of the regional power—Nigeria—ECOMOG intervened robustly in the setting up of the Cameroon-Nigeria Mixed Commission to manage relations between the two states over the oilrich Bakassi peninsula. It also led negotiations that resulted in the sharing of oil revenue between Nigeria and Equatorial Guinea from a disputed Marine oil field (Adekeji 2004), as well as between Nigeria and Sao Tome and Principe on exploiting a joint development zone that each country claimed as its own territorial waters. Such a peaceful agreement helped to avert military confrontation between the two countries. Track 2 diplomacy is the unofficial intervention of various civil society actors, mainly nongovernmental organizations, in promoting peace and good governance. With regard to oil in West Africa, track 2 efforts have been led by international NGOs that have focused mainly on advocacy issues around transparency and accountability. There are several such efforts, but perhaps the most prominent are those of the Norway-based EITI and the civil society-led Publish What You Pay campaign. They focus on anticorruption, energy transition, civic engagement, gender, contract transparency, environmental impact, and revenue transparency. In the subregion the two organizations work with various national civil society groups in countries as diverse as Cameroon, Niger, Senegal, and Sierra Leone. Though both are multistakeholder initiatives, the key difference is that the former is largely government-driven and voluntary, while the latter is NGO-led and more activist-oriented. As important as these initiatives are to fostering a better climate of transparency and accountability, both the EITI and PWYP have some major shortcomings that limit their effectiveness in the oil sector in particular. They are largely voluntary and so implementation is relatively weak. By depending on the goodwill of governments and the oil sector to police themselves, these watchdog initiatives, though noble, are not enough to bring about the requisite radical changes needed to enhance the peace properties of the emerging oil sector. Their advocacy and monitoring roles are nevertheless important in ensuring the transparent use of natural resources such as oil to drive development.

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International oil companies have an important role to play in mitigating West Africa’s oil conflicts. Because of their clout and financial wealth, they have the power to influence events for the better. But to make such a process viable and sustainable, the mode of resolving these contentious conflicts has to go beyond the Western model of dispute management. This is designed to ameliorate conditions, purchase local harmony, demonstrate good corporate citizenship, and show responsible behavior. The care-and-welfare approach common among corporate social responsibility divisions in oil companies includes benevolent welfare, social projects, financial contributions, compensation payments, use of kidnap and ransom expertise, payoff in settlements, investment in microcredit schemes, hiring of additional private security guards and occasional pleading with governments and recourse to authorities to establish civil order. These are all essential tools but should be used to complement, not substitute, genuine efforts to diversify the massive oil wealth and foreign direct investment in the region. Most foreign companies have adopted survival strategies to cope with the uncertainties of operating in a volatile environment (Clarke 2008, p. 91). At the grassroots level, various civil society organizations have continued to exert pressure on governments and the oil companies for the transparent use of the proceeds from the region’s emerging oil wealth. These have used a combination of judicial measures, research and documentation of violations, reports, and in some cases direct nonviolent action to ensure their voices are heard. All of these varied multitrack efforts are critical to ensuring that West Africa’s oil becomes a catalyst for positive change rather than a resource curse that hinders and stunts the region’s socioeconomic growth and undermines its stability. An important avenue for mitigating oil conflicts is the development of more robust people-centered petroleum regimes, especially those found in formal agreement. Oil contracts are at some level conflict-prevention tools. They outline roles and responsibilities as well as tasks, timeframes, and the distribution of proceeds. The missing piece, however, is the absence of grassroots voices in the process. Instead of having just the government and the oil companies as the most important stakeholders that determine the fate of everyone else, a more comprehensive agreement should include more diverse voices, to include those who are likely to be negatively impacted by the environmental effects of rapacious oil drilling.

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Political will is also critical to making the immense wealth from oil more responsive to the needs and aspirations of the people, the rightful owners of the resource. When governments adopt a more cooperative approach their individual countries, citizens and the subregion benefit. The trickle-down effect could be realized through, for example, the removal of barriers to trade to create larger markets. Large trading blocks will, in turn, stimulate the emergence of niche markets for goods and services that they produce more efficiently and could be able to sell to others in the same region at a profit (Open oil 2012, p. 126).

Conflict Resolution Even though Africa’s modern borders are less than 100 years old, the region has a long experience with managing border conflicts. Whereas the border disputes have been relatively easier to resolve, the maritime disputes have proven to be more protracted. Bilateral and Multilateral Agreements The vast majority of West Africa’s border tensions have been resolved through negotiations. Liberia settled with Guinea in 1960 and with Cote d’Ivoire in 1961. Mali and Mauritania followed suit in 1963; as did Niger and the then Upper Volta (now Burkina Faso) in I964. Ghana and the Upper Volta in 1964; and, Ghana and Côte d’Ivoire in the same year (Kornprobst 2002). In the case of Ghana and Côte d’Ivoire, after 10 failed attempts at bilateral negotiations, in 2014 the two countries finally reached out to the United Nations through its Hamburg-based International Tribunal for the Law of the Sea (ITLOS), as an arbiter (ObengOdoom 2016, p. 108). International Legal Instruments for Managing Disputes Various legal instruments are key to managing the region’s maritime disputes. One of the most important of these is the delineation of Exclusive Economic Zones (EEZs), defined in articles 55–75 of the UN Convention on the Law of the Sea (UNCLOS). Under this regime maritime states can lay claim to zones that extend 12 miles from the coastline up to about 200 miles from the coast. Ghana has made extensive use of the EEZ by adopting several laws to lay sovereignty over the disputed region

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with Cote d’Ivoire. In theory EEZs are a powerful dispute resolution mechanism as it clearly delineates coastal countries maritime boundaries. In practice however, the concept is difficult to apply, especially in enclosed areas where the 200-mile zones from the coasts of any of the continental states would overlap with the zones of countries on the other side of the sea (Stocker 2012, p. 584).

Chapter Conclusion The ongoing discoveries of commercial oil in West Africa have led to a significant rise in tensions between and among all stakeholders in the subregion’s petroleum industry. The disputes over resources have the potential to spark actual armed conflict, as has already happened between Nigeria and Cameroon over the Bakassi peninsula. As more states begin to extract oil in the maritime zones, there is a possibility of renewed tensions. The huge profit margins and the sheer number of stakeholders and issues increases the prospects for conflict. This chapter discusses the possibilities for both conflict and cooperation in the subregion. At the heart of the issue is that petroleum is also a source of political power and control. Because oil is a strategic resource, its production and trade give immense power to those governments and companies that control it. As such, oil plays a critical role in both economic and social development; it is also a source of domination and control, which in turn generates fear and powerlessness. I have argued that the aggressive incursion of petro-capitalism into West Africa is a recipe for multiform conflicts. This is partly because oil is a “concentrated resource,” meaning it passes through only a few hands and therefore has the capacity to undermine the nascent stability now prevailing in large parts of the region. Oil also has the potential to promote peace and economic development in the region by enhancing cooperative behavior among key stakeholders. Translating the potential oil wealth into tangible and people-centered sustainable revenue stream that meets the aspirations of the populations requires foresight as well as creative and robust conflict resolution processes.

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References Adekeji, Adebayo. 2004. Security Challenges in West Africa, A Project of the International Peace Academy. Colorado: Lynne Rienner Publishers. Anderson, David M., and Adrian J. Browne. 2011. The Politics of Oil in Eastern Africa. Journal of Eastern African Studies 5 (2): 369–410. BBC News. 1998. World: Africa, US Tightens Sanctions Against Unita. Available at http://news.bbc.co.uk/2/hi/africa/154660.stm. Beeley, Mark, and Sarah Stockley. 2010. Upstream Oil and Gas Disputes. Available at https://globalarbitrationreview.com/chapter/1178845/upstream-oiland-gas-disputes Orrick, Herrington & Sutcliffe (UK) LLP. Burton, John. 1990. Conflict: Basic Human Needs. New York: St. Martins Press. Clarke, Duncan. 2008. Crude Continent: The Struggle for Africa’s Oil Prize. London: Profile Books. Daniel, Tim. 2002. Maritime Boundaries in the Gulf of Guinea. London. Available at https://www.iho.int/mtg_docs/com_wg/ABLOS/ABLOS_Conf2/ DANIEL.PDF. Delaume, Georges R. 1981. State Contracts and Transnational Arbitration. The American Journal of International Law 75 (4) (October): 784–819. Delaunay, K. 1992. Fanti and Ewe Fishermen’s Migration and Settlement in Cote d’Ivoire. Maritime Anthropological Studies (MAST) 5 (2): 96–103. ECOWAS Press Release. 2017. Available at https://ecpf.ecowas.int/category/ news/press-releases/. Accessed May 30, 2019. Farnsworth, E. Allan. 1968. Disputes over Omission in Contracts. Columbia Law Review 68 (5) (May): 860–891. Fisher, Max. 2012. The Dividing of a Continent: Africa’s Separatist Problem. The Atlantic. Available at https://www.theatlantic.com/international/archive/ 2012/09/the-dividing-of-a-continent-africas-separatist-problem/262171/. Frynas, J˛edrzej George. 2004. The Oil Boom in Equatorial Guinea. African Affairs 103 (413) (October): 527–546. Institute for Multi-Track Diplomacy. Available at https://www.imtd.org/about/ what-is-multi-track-diplomacy. Accessed July 18, 2019. Koigi, Bob. 2017. Ghana Wins Maritime Boundary Dispute Against Côte d’Ivoire. Available at https://africabusinesscommunities.com/news/ghanawins-maritime-boundary-dispute-against-c%C3%B4te-d%E2%80%99ivoire/. Accessed May 18, 2019. Kornprobst, Markus. 2002. The Management of Border Disputes in African Regional Sub-Systems: Comparing West Africa and the Horn of Africa. The Journal of Modern African Studies 40 (3): 369–393. Matthews, R. 1970. Interstate Conflict in Africa. International Organization xxiv (2): 340–341. Obeng-Odoom, Franklyn. 2014. Oiling the Urban Economy: Land, Labour, Capital, and the State in Sekondi-Takoradi. Ghana: Routledge.

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Obeng-Odoom, Franklyn. 2016. Oil in the West African Transform Margin: Dangers and Possibilities. International Critical Thought 6 (1): 101–118. Okonkwo, T. 2017. Maritime Boundaries Delimitation and Dispute Resolution in Africa. Beijing Law Review 8: 55–78. Available at https://doi.org/10. 4236/blr.2017.81005. Open Oil. (2012). Oil Contracts: How to Read and Understand Them. London, UK: Creative Commons License. Palazuelos, Enrique. 2012. Current Oil (Dis)Order: Players, Scenarios, and Mechanisms. Review of International Studies 38 (2) (April): 301–319. Pegg, Scott. 2005. Can Policy Intervention Beat the Resource Curse? Evidence from the Chad-Cameroon, Pipeline Project. African Affairs 105 (418): 1–25. Pietrowski, Robert F., Jr. 1986. Guinea/ Guinea Bissau: Dispute Concerning Delimitation of the Maritime Boundaries. International Legal Materials 25 (2) (March): 251–307. Stocker, James. 2012. No EEZ Solution: The Politics of Oil and Gas in the Eastern Mediterranean. Middle East Journal 66 (4) (Autumn): 579–597. Stockholm Institute for Peace Research. 2012. EU Arms Embargo on Nigeria. https://www.sipri.org/databases/embargoes/eu_arms_embargoes/nigeria. Summers, Robert S. 1982. The General Duty of Good Faith—Its Recognition and Conceptualization. Cornell Law Review 67: 810. Sumner, Brian Taylor. 2004. Territorial Disputes at the International Court of Justice. Duke Law Journal 53 (6) (April): 1779–1812. Vines, Alex. 2010. Thirst for African Oil. London: Chatham House.

CHAPTER 8

Conclusion: Implications for the Field of Conflict Resolution

Conflict Resolution Theories The linkages between natural resources, conflict, and peace are of immense interest to the field of conflict resolution, which has its origins “in economic differentiations, social change, cultural formation, psychological development and political organization” (Ramsbotham et al. 2016, p. 9). Oil is highly conflictual, often spurning destructive and often intractable conflicts. As such it is of interest to the field of conflict resolution. How petroleum fosters instability and shapes peace and stability has been the subject of analysis for many scholars and academicpractitioners (Homer-Dixon 1999; Sachs and Warner 1995; Berdal and Malone 2000; Klare 2002; Colgan 2013). Elucidating what has been termed the “Resource curse,” the scholarly literature is replete with studies of the direct and indirect relationship between natural resources, stunted economic growth, and conflict. Three main lines of inquiry are discernible in this discourse. The first focuses on the negative impact of the resource itself—the resource curse—and the second is concerned with how natural resources do foster economic growth. The third school of thought questions the validity of the claims that abundant resources help or stunt a country’s developmental growth. A 1995 study by Sachs and Warner (1995) was among the first to draw correlations between natural resources and stunted economic growth, especially with regard to developing economies. They argued quite vociferously that abundant natural resources negatively impact the economic © The Author(s) 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5_8

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growth of a country. This is often due to a combination of overdependence on one source of revenue, bad economic policies, price fluctuations in the primary commodity, and the perception among the political class that the resource wealth is infinite. Ross (2004) has since built on this resource curse hypothesis. In his groundbreaking work titled The Oil Curse: How Petroleum Wealth Shapes the Development of Nations (2012), he argues quite convincingly that while incidences of civil wars have declined over the last three decades, conflict has remained persistent and stubborn in oil-producing countries. The problem, he surmised, is that the more money a country receives, the less accountable its political class becomes to the citizens on whom the country will no longer depend for taxation and its attendant social contract. The kinds of oil-related conflicts discussed in this book are referred to in the conflict resolution literature as protracted conflicts (complex and difficult to resolve). This is mainly because they involve both tangible needs and interests as well as nontangible needs: love, respect, identity— issues often considered nonnegotiable by parties in a typical conflict. The field of conflict resolution occupies itself with addressing the underlying issues that lead to disputes and with finding and creating means to promote dialogue and address tensions. Because there are so many dynamics to consider various conflict resolution theories could help inform our understanding of the nature of resource-fueled conflicts in West Africa. The greed and grievance theory as popularized by Collier (Collier and Hoeffler 2000) and others helps highlight the motivations of stakeholders in the extractive industry. The role of economic motives in creating and sustaining conflicts has been a subject of analysis in the field of conflict resolution for more than two decades (Berdal and Malone 2000). Collier, in particular, helped mainstream the discussions pertaining to the different ways in which factions benefit materially from civil conflicts, especially in the decade following the end of the Cold War. There has been vigorous argument [greement] among scholars that economic considerations are some of the key drivers shaping peace and stability in many contemporary conflicts. The role of the profit-driven international private sector, and the illegal and gray economies their modus operandi generates, especially in the extractive industry, affects which way West Africa pivots—toward either development or conflict. The agenda and actions of companies such as Shell in Nigeria and Angola and on the global markets will no doubt influence West Africa in profound ways. In that sense, war economies, and the stakeholders that directly and inadvertently cause them, are critical to

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understanding contemporary conflicts such as the ones now surfacing in West Africa (Berdal and Malone 2000). But it is not just the overt warfare generated by oil that is of interest to the field of conflict resolution. The covert and indirect violence that oil generates, sometimes referred to as structural violence, engenders social conflicts. For understanding and resolving protracted conflicts such as the ones in West Africa, Johan Galtung’s (1990, 1996) discussion of the three different types of violence—direct, structural, and cultural—is instructive. Direct violence includes any behaviors that effectively threaten life itself or to diminish anyone’s capacity to meet basic human needs. Examples of this type are killing, bullying, and sexual assault. Structural violence stands for the systematic ways in which institutions play a role in preventing some groups from equal access to opportunities and services that enable the fulfillment of basic human needs. Also, structural violence can take the shape of formal behavior, such as in legal orders that enforce marginalization of specific groups through constitutions or bylaws, or it can be culturally functional but without a legal mandate, such as marginalized groups’ limited access to governmental positions. He distinguishes between negative peace, defined as the absence of violence and tensions, and positive peace, which includes the absence of violence but also peaceful cooperation between groups, harmony, political moderation. His three-pronged typology of violence highlights the functions of violence and the different factors which control its environment. Ultimately, oil and its mode of extraction are about people and the environment, not just profits. Basic human needs theory (Burton 1990; Azar 1990), and the issues around human rights and human security, an approach to national and international security that gives primacy to human beings and their complex social and economic interactions, are key to understanding the nature of peace and conflict in West Africa. As Gregoratti (2019) surmises, The subjects of the human security approach are individuals, and its end goal is the protection of people from traditional (i.e., military) and nontraditional threats such as poverty and disease. Central to this approach is the understanding that human security deprivations can undermine peace and stability within and between states, whereas an overemphasis on state security can be detrimental to human welfare. The state remains a central provider of security, but state security is not a sufficient condition for human welfare.

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The primacy of human security over state security, especially with regard to other ancillary extractive industries such as diamonds, is a relevant lesson for policymakers in West Africa, considering the history of resource-driven conflicts. From Sierra Leone to Nigeria to Angola, various parts of the region have experienced violent social conflicts, largely over natural resources. However varied in their particulars, these conflicts show that extractive resources (diamonds, oil, and gas, to name just three) are among the most conflict-prone resources. What happens in the region’s most prolific oil-producing countries of Nigeria and Angola has wide-ranging implications for other parts of the region. Instability in the region’s largest economies will have a spillover effect, in terms of refugee flows and cross-border cooperation. On a tour of the Niger Delta in Nigeria, I experienced the paradox-ofplenty phenomenon firsthand. We drove past several empty and in some cases abandoned gas stations. I began to wonder why. What accounted for this scarcity in the midst of abundance? With plenty of subsidized fuel but no electricity or erratic power supplies to pump them, selling petroleum products was simply not profitable for small business owners. There is another reason for the poor state of gas stations in the Niger Delta: intense competition from illegal sources. A few meters away from an abandoned gas station, we came across two young men selling fuel by the roadside. My tour driver simply pulled over and filled up his tank. “It is a fraction of the cost to what they sell at the gas station,” he told me. As we drove on, I noticed more of these roadside dealers. The driver believed that sometimes it was the very people at the gas stations who were orchestrating these deals—in some cases to undermine other dealers, but usually simply to generate income to add to their meager salaries. At the local flagship university in the Niger Delta, a power outage lasted the entire three days that I was there. Even in a region that has helped Nigeria earn $290 billion (Litvin 2003, p. 257) in oil exports, there was not enough refined crude oil to power some of its most critical institutions. The issue, I found out through several discussions with local stakeholders, was less the availability of crude (there was in fact enough for local consumption) and more a matter of corruption and mismanagement—the lack of a system in place to process and refine petroleum products and get them to market efficiently and profitably. While Nigeria’s upstream sector (oil exploration and drilling) is historically strong, its downstream sector (refining, marketing, and sales) appears to be its weakest link. For

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more than two decades, sub-Saharan Africa’s largest oil producer has been forced to import refined petroleum products because of its lack of refining capacity. The construction of a massive oil refinery in Lagos by the Dangote Group is expected at least to alleviate some of that problem. Projected to be operational in 2020, the completed refinery will be able to refine an estimated 650,000 bpd, which alone would more than triple the country’s current capacity of 1.5 million barrels (Campbell 2019). Because oil is heavily subsidized in the country, it is more profitable when smuggled and sold in other parts of Nigeria and overseas, including the Gulf of Guinea states and China, North Korea, Israel, and South Africa. The United Nations Security Council estimates that Nigeria lost $2.8 billion of revenue to oil theft in 2017. A 2013 Chatham House report approximates current losses at a minimum of 100,000 barrels per day— averaging between $3 billion to $8 billion per annum (Browning 2018). This partly explains the Niger Delta’s oil shortage in the midst of plenty that the author witnessed first hand. Changes across the region are happening that may impact the oil industry. In September 2018, João Lourenço became Angola’s first new president in 38 years, succeeding José Eduardo dos Santos. The dos Santos family had a stranglehold on the nation’s vast economy. Isabel dos Santos, ran the national oil company, Sonangol, while her brother José Filomeno, ran the country’s $5 billion sovereign wealth fund. In spite of the entrenched nature of his predecessor, the new president has waged a spirited campaign against entrenched corruption in one of Africa’s largest economies. Within months of his inauguration, the president’s administration replaced high-ranking people in the Angolan military and economic sectors, including members of the dos Santos family. Lourenço pledged to open up the economy to foreign investment (Economist 2018). Such a seismic shift will reverberate around the region, especially in countries such as Equatorial Guinea where the incumbent has been in power since 1979 and is now reportedly grooming his son to succeed him.

Implications for the Region West Africa is not new to natural resources. The region has had a complex interaction with its natural endowments from its inception. Almost all countries are “blessed” to varied degrees with natural resources. Table 8.1 outlines some of the more common resources often associated with each

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Table 8.1 Natural resources of West Africa Country

Main natural resources

Comments

Liberia Ghana

Rubber, fishing, timber Gold, cocoa, coffee, fishing, hydrocarbons (oil and gas) Cocoa, coffee, fishing, hydrocarbons Cocoa, coffee, fishing, oil

Prospecting for oil The region’s newest oil producer

Nigeria Cote d’Ivoire

Senegal, Niger, Burkina Faso Mali Guinea

Groundnut, cotton, sorghum Cotton, livestock, millet, rice Bauxite

First and largest oil producer World’s leading cocoa producer and marginal oil producer Huge potential in the Senegal basin Landlocked Top five producer in the world

country. Guinea is famous for its bauxite, while Côte d’Ivoire is known the world over for its cocoa plantation, Nigeria is known for its crude oil, Sierra Leone for its diamonds, and Liberia for its rubber plantation. All the riverine and coastal countries also have fishing (a $2.5 billion industry, according to the Food and Agricultural Organization) as a major economic activity. In this sense, it is, therefore, safe to state that to understand West Africa’s political economy one needs to understand its natural reserves. West Africa’s commercial oil finds have thus far been uneven. In the political economy of oil discourse, the region could be subdivided into four main categories of states: petro-states, modest producers, prospects, and hopefuls. Nigeria, Equatorial Guinea, Chad, Gabon, and Ghana (the newest producer) fall into the first category, as they have economically viable, proven reserves. Since the 1990s these countries have experienced strong revenue growth from the petroleum industry. With West Africa increasingly becoming the first large-scale producer of deepwater offshore oil in the world, it is estimated that oil revenues alone will increase exponentially. Cameroon, Mauritania, and Côte d’Ivoire are modest producers whose oil output (production and export) has fluctuated wildly over the last two decades. Côte d’Ivoire in particular hopes to double its productions in the

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coming years, partly in a bid to diversify its cacao-based economy. Liberia, Sierra Leone, São Tomé and Principe, and Senegal are prospect economies with modest extraction potential that experts put at between five and ten years away from actual production. Others, such as the Gambia, Togo, and Guinea-Bissau, have so far, in spite of years of frantic efforts, yielded no economically viable oil finds. The powerful temptations of oil and its enormous potential mean that governments in the region have not given up hope. Partly buoyed by the discovery of the massive Jubilee fields in Ghana in June 2007, the hopefuls have intensified their onshore and offshore explorations on the chance of commercially viable discoveries of their own. Ghana’s enormously wealthy finds in 2007 set in motion a new round of investments in West Africa. Sierra Leone announced a discovery in September 2009. In 2010 there were licensing rounds in Gabon, São Tomé, and Liberia all issued licensing rounds, while Côte d’Ivoire embarked on a new round of drilling (Vines 2010). Even the traditional producers are not letting up. Angola has stepped up its exploration in its deep waters. They all hope to cash in on the estimated $16.1 billion foreign direct investment (mainly concentrated in the oil sector (World Bank 2012); that is flowing into the region. But with more than 56 years of oil drilling in the region, three possible outcomes for countries that have oil or hope to become first-time oil producers in the near future are discernible: 1. petro-state 2. modest petro-state 3. sustainable development The first outcome—petro-state—is what becomes of countries in the region that are totally dependent on petroleum rents for their survival. In the context of West Africa, Nigeria, Gabon, Equatorial Guinea, and Angola could be categorized as petro-states. Under this model, oil is central to a country’s economic, social, and political life. As a result, the state and the elites appropriate, or “capture,” the resource and use it to entrench themselves in power or engage in meaningless, prestige-driven mega-projects such as the Transgabonais railway or the new cities projects in Nigeria and Equatorial Guinea referenced earlier.

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Another key feature of petro-states is that state security is prioritized over human security. It is perhaps not surprising that secessionism and other forms of violent protest are increasingly becoming a major feature of contesting the state in these oil-dependent countries. In short, though they have the potential to reverberate around the region, violent protests over resource redistribution will remain largely localized, as in Cabinda in Angola and in Nigeria’s Niger Delta. Among the small-scale producers, which include the Francophone countries of Senegal, Cameroon, and Côte d’Ivoire, oil revenues will be important but not the most dominant source of foreign exchange for the state. For the foreseeable future, the majority of the states in the region will likely be low-level producers. Over the last decade, Cameroon has earned 6–12% of its GDP from oil rent. Though this appears paltry when compared to Angola and Nigeria, where oil revenue as a percentage of government revenue stands at 90 and 83%, respectively (de Oliveira 2007, p. 56), in combination with proceeds from other natural resources, it can become a powerful catalyst for national development. Conversely, such wealth could also become a powerful weapon in the hands of the ruling elites. The state will earn enough to buy off or suppress the opposition and dissent. Social protests over the redistribution of the oil resource and proceeds from other natural resources will be more common. The sustainable development model is the ideal outcome for West African countries. Here, drawing on lessons from the petro-state model especially, the producer state takes the steps necessary to diversify its economy by building a broad consensus that safeguards the environment and the social aspirations of its people and by developing industries such as tourism and agriculture. Though it is still too early to draw a firm conclusion, Ghana seems to be heading in this direction. With a relatively mature political system, the country has taken the necessary steps to promote transparency and accountability in its oil sector. The active involvement of civil society, which utilizes a people-centered process to decisionmaking, will be key. Of equal importance is the role of IOCs. Through their corporate social responsibility approach, IOCs can help prevent conflict by reconfiguring social projects to create employment and stimulate the local economy. These three outcomes (petrostate, modest, and development outcomes) would be shaped by a host of variables, both external and internal to the region. Because West Africa is so large and so varied—geologically, politically, geographically, economically, and socioculturally—the

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wider impact of oil on the region will also vary considerably from country to country. Even with the intensified oil exploration, the commercial oil finds in the region, including its deep and ultra-deep waters, are thus far relatively uneven. Some countries have been luckier than others: Guinea, Benin, and Togo—all in the same geological zone as Nigeria and Ghana— have so far failed to find any economically viable oil deposits. And as has been outlined here and in preceding chapters in this book, this is not for lack of effort, or investment, or the requisite political will. Côte d’Ivoire and Gabon, two countries that have been producing oil for more than 30 years, are both experiencing dwindling production just at the time when others, such as Ghana, are discovering massive finds of their own. The oil industry is also very territorial, with various companies directly vying for turf, through short- and long-term alliances or through the creation of subsidiaries. This helps to explain why the exact mix of IOCs in each country varies dramatically. The newer producers have a much greater mix of smaller and second-tier companies. The more established producers, such as Angola and Nigeria, have a much greater mix of majors or supermajors, with one major IOC dominating in a country and relatively smaller investments in others. For example, BP is one of the leading (but not dominant producer) in Angola, while Shell is the largest producer in Nigeria. The French oil companies dominated Gabon in a way they didn’t dominate other countries, while the Chinese oil companies are active in Angola, they have minimal footprints in Equatorial Guinea or Gabon.

Moving Forward: Ongoing Challenges The discovery of mineral and petroleum resources in West Africa has been a major calculus however, one that has the potential to eclipse the other mineral resources outlined in Table 8.1. As Jalloh again points out, “Apart from The Gambia that can hardly boast of any form of mineral resources, all other West African States have one or other forms of mineral resources. Diamond, Gold, Bauxite, iron ore, and recently crude oil are all part of Sierra Leone’s endowment of mineral resources. Guinea is among the top five bauxite producers in the World, whilst Ghana has abundant deposit of gold and recently discovered crude oil in commercial quantities. Nigeria has been leading in terms of crude oil production in West African for the past decades.”

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Of all of these natural and mineral resources, however, oil is set to create the biggest impact. Petro-capitalism is slowly taking hold in West Africa. But oil is a major game-changer for many of these countries. It is unlike any other natural resource, not only because of the enormous wealth it could generate but also because of its prospectivity in the region, which has been described as the “oilest patch in the world” (Black 2012). More than 500 oil companies—from traditional sources in the West, including the United States, United Kingdom, Australia, and Canada, as well as from nontraditional sources such as India, Malaysia, and Singapore (Baumüller et al. 2011)—are engaged in its upstream and downstream activities. The economically viable supply in countries such as Nigeria, Angola, Equatorial Guinea, Gabon, and more recently Ghana (with the discovery of the Jubilee fields) has only helped to attract even more investors and massive foreign direct investment. The emergence of West Africa’s petro-capitalism is occurring at a time when the region is experiencing a period of relative decline in violent conflicts. Both Sierra Leone and Liberia, two countries synonymous with the region’s brutal civil wars of the 1990s to mid-2000s, have made notable strides in consolidating their peace (United Nations Office for West Africa 2002). Even coup-prone Guinea-Bissau is experiencing some degree of relative calm, while the tentative peace in Côte d’Ivoire since the ousting of Laurent Gbagbo in April 2011 is thus far holding. Most of those wars’ architects have either been eliminated or are facing various forms of domestic and international judicial processes for war crimes and crimes against humanity. Democratic tenets are also taking hold in the region, as evidenced by the regularity of multiparty presidential and parliamentary elections in hitherto autocratic states. Landmark democratic elections—which have generally been considered to be free and fair—have led to the successful transfer of power to civilian rule and to the consolidation of peace and stability in the region (Wright 2007). Liberia, Guinea, Sierra Leone, and Guinea-Bissau have all conducted relatively free and fair elections. But as Mali, Côte d’Ivoire, and the ongoing insecurity in Nigeria have shown, building on these successes remains a key challenge. On the economic front, the region has become increasingly integrated into the global economy through remittances, foreign direct investment and the high prices its natural resources—such as diamonds, gold, gas, and increasingly oil—fetch on the international market. According to the World Bank (2012), between 2009 and 2011 foreign direct investment in

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the region increased by 36%, to $16.1 billion. Not surprisingly, a sizable proportion of this investment was concentrated in the petroleum industry. The economies of at least half of the 16 countries that make up the region have experienced a 6% annual growth since 2002 (World Bank 2012). Buoyed by production from its enormously wealthy Jubilee fields, Ghana’s economy expanded by a whopping 13.4% between 2010, when production started on the fields, and 2011. It is now the fastest growing on the continent. Trade between China and Nigeria, which was a mere $2 billion in 2000, had reached $18 billion by 2010 (Egbula and Zheng 2011). Because of the uneven spread of oil, some littoral countries will not necessarily benefit from the oil bonanza. If anything, they may become negatively impacted by the FDI that bypasses them into oil-rich areas of the region. Instead of developing other aspects of their economy such as agriculture, fishing, and tourism, most of the governments are likely to be sidetracked by the all-consuming search for oil, which requires time, personnel, and millions of dollars in foreign investments. In their obsession with oil, all of these countries have restructured their respective national oil companies and have opened new hunting grounds to enable them participate in oil exploration. The low-hanging fruits of development will be sidelined for the huge payoffs that oil finds could bring. The temptation is simply too great. Furthermore, some of the countries are still fragile. Sierra Leone, Liberia, and Guinea were massively affected by the Ebola outbreak, which killed nearly 200,000 people across seven countries. Even the mega oil countries are not immune. Political upheavals and armed conflicts that hit Nigeria and Angola, and later Sierra Leone, Liberia, Côte d’Ivoire, and to some extent Guinea, all contributed in delaying or stymieing exploration and drilling in profound ways. Angola, for example, has concentrated its oil exploration and development offshore and in deepwater largely because of the legacy of the conflict. There are still around five million landmines scattered throughout the country, without any clear record of location. It has claimed over 100,000 fatalities (Clarke 2008, p. 134). Even in more stable countries such as Senegal, oil has the potential to ignite new conflicts: about 67% of the country’s oil wells sunk so far are in the Casamance Offshore and Cape Vert Peninsula (p. 265). The other major challenge for the region is that oil is a finite resource, meaning that at some point it will run dry or become economically unsustainable. Both Gabon and Côte d’Ivoire have experienced boom and bust cycles. The commercial viability of Gabon’s oil fields are diminishing after

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1997 at 370,000 bpd. New offshore prospects have been identified, but they are yet to register any commercial yield. Exploration in Côte d’Ivoire produces around 40,000 bpd but has stagnated over recent years because oil companies like Anadarko and Ophir have thus far failed to produce sizeable discoveries (Lewis 2018). Even the key producers in the region are not immune to the unpredictability of oil. Due to lack of investment, both Nigeria and Angola face aging oilfields and a lack of new investments. Considerable reform is urgently needed (Oxford Institute for Energy Studies 2019). As long as it lacks the requisite technology to extract and process its resources, West Africa will remain subject to unfair terms. Knowledge and skills transfer are key to future growth. The region will continue to be subjected to both domestic changes and worldwide industry cycles like mergers, bankruptcies, and ongoing finds elsewhere such as in the Gulf of Mexico. The situations in the postconflict countries of Sierra Leone and Liberia are even more precarious. Oil was discovered in their offshore waters in 2009 by the Texas-based Anadarko. According to the US Geological Survey, the West African Coastal Province—which includes Liberia, Sierra Leone, and Guinea—has an estimated 3200 million barrels of oil (West Africa Oil Watch 2013). The development on these reserves, which could be significant, is still several years away. The countries’ Petroleum Acts, which were guided by agreements with oil companies, were rushed through respective parliaments as an emergency bill with little input from their respective communities. The initial oil finds are in two coastal districts in southern Sierra Leone, Pujehun and Bonthe, and two coastal counties in Liberia, Grand Cape Mount, and Bomi. The four regions have a lot in common: • All were adversely affected by civil wars (1989–2002). The civil war in Sierra Leone began in the Kono district in 1991, and its people suffered an especially high amount of devastation. Bomi County was the headquarters of the LURD rebel movement and was heavily contested by all the factions and therefore suffered extensive damage. In addition to the physical and structural effect of the war on the potentially oil-rich regions, they also have a large presence of excombatants from the various factions that proliferated in the war of the 1990s. In the south around Shenge, the population is close to 9000 inhabitants; around 8000 live in the Bonthe Sherbro area.

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• They share socioeconomic challenges. Though blessed with ample natural resources, these are among the poorest communities in West Africa. They have some of the highest infant mortality rates in both countries with only 15% of their populations having access to healthcare. • These were the first regions where oil was discovered and where exploration is at its most advanced. • The Mano River and the Atlantic Ocean connect the two countries, as such they are susceptible to the same weather patterns and have similar topography. All of the oil-producing countries have experienced various forms of oil-related social conflicts. While on many occasions these agitations have been peaceful, a growing number are gradually metamorphosing into violent insurgencies. In fact, with the exception of the Boko Haram insurgency in northeastern Nigeria, almost all of the violent threats to the major oil-producing countries are concentrated in the oil communities themselves. The Movement for the Emancipation of the Niger Delta (MEND) and the Front for the Liberation of the Enclave of Cabinda (FLEC) in the Cabinda enclave are classic examples of how years of neglect in the midst of plenty can lead to open and violent confrontations over agitations for the redistribution of oil wealth.

Conflict Research Techniques “We Follow the Fish”: Oil and a Fishing Community The complexity of conflicts in the oil industry requires engaging with all the stakeholders, including the most marginalized groups. The action research tools of conflict resolution are useful in illuminating issues that may otherwise not be considered significant by other disciplines. Conflict resolution research techniques will help illuminate the underlying issues facing the industry. Understanding and exploring the complex issues of oil and its effect on people and the environment requires seeking out those voices that are often unheard or are drowned by other more powerful actors. The fishing industry is in many ways the economic lifeline of most of the countries in the region. Extracting any resource from such heavily built-up areas would always be problematic as it would not only disrupt

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the livelihoods of millions of people but also negatively impact areas that provide vital ecosystem services. I spent several days with a fishing community in Ghana’s twin cities of Sekondi-Takoradi and Jamestown, a district in the city of Accra, all in an attempt to gauge the diverse ways that commercial oil production’s effect on local communities. The problems my interlocutors listed included the following: • spending longer days at sea mainly because they have to navigate away from the oil drilling platforms • declining catch, which they believe is caused by the unusual noise and movements caused by oil drilling platforms and shipping activities • lower yield • more traffic on the high seas with oil tankers and others plying the routes • high cost of living There is no doubt that fish stock is affected by the increased activities out on the seas. Even in areas far away from the oil platforms, members of the fishing community expressed concerns over the debilitating effects of oil drilling. In historic Jamestown outside Accra, respondents expressed a deep understanding of the linkages between oil drilling and their industry. One of the fisherman pointed out that their catch is dwindling as they now have to go much farther out, and for longer days to get a decent catch. Because of these inconveniences, and sometimes dangers, they prefer to go farther out to sea. Lessons from the Diamond Industry: Sierra Leone and Angola The region’s extractive industries, particularly its diamonds, hold some lessons for West Africa going forward. For more than 80 years, countries such as Sierra Leone and Angola have mined or extracted with mixed results. In Sierra Leone, diamonds were first discovered in Kono, eastern Sierra Leone in 1930. Ever since then, diamonds have become a mainstay of the Sierra Leone economy. From 1930 to 1998, the country officially earned close to $15 billion in diamond revenues (Smillie et al. 2000, p. 4). Diamonds created an enclave economy, with a small minority of the elites benefiting while very little of that wealth trickled down to the

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average Sierra Leonean, who still survives on less than $1.25 a day according to the latest United Nations Development Programme figures. The irrefutable conclusion is that the diamond minerals have failed to enhance the country’s development. The dependence on diamonds is about to change with the ongoing discoveries of oil, the world’s most sought-after natural resource. Oil’s introduction to the country’s political economy will have major implications for the country’s future. Drawing from the experience with diamonds, various stakeholders, including civil society groups, are already expressing concern about the social, economic, environmental, and political implications of a highly profitable but volatile resource on a poor country recovering from a brutal civil war. As one civil society activist put it, “Given Sierra Leone’s rather poor record in the management of its precious minerals, what are the chances that oil will do for us what diamonds have failed to accomplish in more than 80 years of mining” (discussions with author, Freetown, 2017). Another stakeholder, a local chief pointed out that, “Diamonds brought us nothing but misery and trouble” (discussions with author, Pujehun, Sierra Leone 2017). These are genuine concerns. Even though the industry is still in a nascent stage, it is already beset with problems. So far, the discoveries have not resulted in commercial production. The delay is partly because the seismic data is still being analyzed by the government and partner IOCs. The lack of infrastructure in a country emerging from a debilitating civil war and other man-made disasters also contribute to the holdup. Externally, the volatility in the price of oil in the international market, from a high $110 per barrel in 2010 to a low as $52 in 2017, has cooled interest from investors and further stunted the growth of Sierra Leone’s oil industry. The field is also overcrowded, with no fewer than 40 IOCs currently active its oil industry. The harsh reality is that the country faces a formidable challenge in its attempt to make the nascent oil industry responsive to the socioeconomic needs of the nation and its local population. In Angola, as with Sierra Leone, diamonds also fueled a civil war and prolonged its conclusion. The Jonas Savimbi-led UNITA rebel groups turned to diamonds to fund its war against the MPLA, which also depended on oil to pursue its war strategy. By value, Angola is the world’s fourth-largest diamond producer, with its vast diamond wealth spread across the country and its best mines clustered around Luanda Norte and Cuango Valley, areas that were firmly under the control of UNITA.

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The ensuing war lasted almost three decades, claiming some 500,000 victims. At the height of its power, the rebel movement generated between $50,000 and $4 million per month (Bilion 2011). After its conclusion in 2002, the country signed on to the Kimberley Process, which certifies that diamonds were not produced in a conflict zone and did not finance conflict. The conflicts over diamonds offer a cautionary tale of sorts regarding the dangers of violence that can emerge from the misuse of natural resource proceeds.

Recommendations This analysis outlines the nature of oil-related conflict in West Africa. Oil conflicts are protracted because multinational oil companies fail to recognize and fulfill the environmental human rights of the affected communities and because governments fail to institute effective laws and regulations to enforce the legal provisions that could help address fundamental environmental human rights requirements. Conflicts stem from political differences and competition for natural resources for economic purposes. Issues of violations of human rights are significantly related to the activities of the multinational oil companies operating in those areas. In light of the foregoing, this study makes a number of recommendations. As Colgan (2013) rightly cautions, while oil itself may not necessarily be the driver in all conflicts, especially at the global level, because of its critical nature, with a magnitude greater than any other natural resource, …“the sum total of the political effects generated by the oil industry makes it a leading cause of war” (p. 150). The region would need to learn lessons from other parts of the world, to properly harness its resources At the Global Level Existing global frameworks for resource management are good ideas in theory. In practice, however, they are fraught with limitations. They tend to be top-down, and largely Western oriented. Though well intentioned, the voices of the Southern stakeholders are not as mainstreamed as they should be in these multilateral organizations. Also, women at best play a marginal role in the decision-making process, which affects transparency and accountability in the oil industry. The existing frameworks should champion gender mainstreaming in a sector historically dominated by

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men. There is an urgent need to include more diverse voices and create platforms for input from all key stakeholders. This is important because disparate voices could help create stronger and more legitimate frameworks but also because local knowledge of the issues would be key to their sustainability. Both the EITI and PWYP campaigns are commendable steps in that direction. To make it sustainable however, they need to expand the reach of their campaigns, beyond urban civil society to grassroots civil society. At the Regional Level There is an urgent need to diversify economies. The majority of West African countries are susceptible to the vagaries of the global economy partly because of the overreliance on their primary commodities. Unsurprisingly, such countries are at a higher risk of experiencing civil wars or entrenched cronyism, which usually derails good governance and hinders economic prosperity. They have historically struggled to institute and sustain national institutions and policies that would enable them to transform into more developed diversified economies. Commercial engines like agriculture and tourism are critical to sustaining the region’s economy. This will ensure that natural resource exploitation practices are sustainable and that they contribute to developing local communities rather than benefiting only the elite political class and extraction companies. In this vein, governments, together with the multinational companies operating in the region, should cooperate in addressing social issues such as high unemployment rates among the youth population. The communities from which resources are extracted demand compensation in the form of reinvestment: resource rents should go back to developing the communities or enhancing their economic well-being. This can be achieved by instituting legislation outlining specific percentages of locals that multinational companies should employ in their operations; laws should also address issues of remuneration and compensation by oil companies. This will be instrumental in ensuring inclusivity and in creating a perception among local communities that they are part and parcel of the operations. The people should be the primary beneficiaries of the natural resources in their lands. This can be enhanced through increased input by other stakeholders such as civil society, nongovernmental organizations, major export countries, and other multinational groups with an interest in the oil sector.

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Civil society and other nongovernmental organizations active in the extractive sector in the region should also continue to push for the institutionalization of a culture of human rights regulations governing the oil industry. The basic form of institutionalization of human rights is through the passage of laws meaning that sustained protection of human rights is an important aspect that would set precedents and norms to be followed in the future and elsewhere. Instituting laws on human rights in the oil sector will eliminate structural injustices and structural inequalities within societies in the oil-producing countries. Conflict management practitioners should work together with human rights activists in ways that addressing the overlapping issues caused by poor management of oil. This is easier said than done. As identified earlier, human rights activists are often most concerned with the functional issues related to equal distribution of security in the society and equality in terms of economic power, political power, and ethnic identity. In situations involving negotiations to resolve long-lasting conflicts within a social setting, the outcome of the negotiations is the most important thing and must be aligned with human rights standards and adhere to the rule of law. In order to increase the chances of succeeding in the negotiations, it is important to include conflict management practitioners, who usually employ facilitative approaches, in the process of reaching successful outcomes. Finally, this analysis has repeatedly found that, taken together, sustained denial of human rights and the absence of human security are one of the fundamental causes of conflict, especially militant agitation, in the region. In addressing the issues of environmental human rights in Niger Delta, multinational oil companies must work toward identifying best strategies for ensuring minimal environmental damage is caused in their activities. This can be achieved by adhering to best practices in the extractive industry in terms of the prevention and timely cleanup of oil spills, proper waste disposal techniques, and adequate compensation to victims and affected communities. Companies should begin addressing all sources of complaints and try to bridge the issues of social inequalities that dominate oil-producing communities—for instance, by prioritizing the health issues in the communities that surround their operating areas. Other initiatives can be intensified, including investment in the development of basic infrastructure like roads, schools, hospitals, clean drinking

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water, and electricity in rural areas. This could also mean undertaking serious cleanup operations in areas where oil spills occur, including engaging in practices that contribute to minimal air pollution.

Conclusion The three realms of the field of conflict resolution: theory, research, and practice are important for understanding the varied ways in which oil and human security interact in regions such as West Africa. The field values disparate voices and perspectives, including the perspectives of disparate communities. As West Africa has risen to become one of the world’s leading oil-producing regions, the viewpoints of all stakeholders will be critical for lasting peace and sustainable development. Patterns of extraction and exploitation of natural resources in low-income and developing regions such as West Africa can generate social conflicts. Conflict resolution will be crucial in helping address disputes, given that most countries in the region are at heightened risk of experiencing resource-related civil wars and internal conflicts, grave violations of human rights, environmental damage, lack of essential basic amenities, and a high level of poverty among the populations living in oil-producing areas. This is not to argue that oil or the petroleum sector alone will shape West Africa’s war, peace, stability, and economic development choices. As I have argued throughout this book, political instability, social violence, stunted development, and poverty all have complex, multicausal roots. The petroleum industry’s impact on each country, let alone the broader region, will vary considerably. The crux of the analysis set forth in this book, however, is that because of its centrality in the political economy of countries big and small, oil will have profound ramifications for West Africa’s socioeconomic development, and for peace and stability.

References Azar, E. 1990. The Management of Protracted Social Conflict: Theory and Cases. Aldershot: Dartmouth. Baumüller, Heike, Donnelly Elizabeth, Vines Alex, and Weimer Markus. 2011. The Effect of the Oil Companies’ Activities on the Environment, Health and Development in Sub-Saharan Africa. European Union (EU) Parliament Commissioned Study, Chatham House, London.

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Berdal, Mats, and David M. Malone. 2000. Greed and Grievance, Economic Agendas in Civil Wars. Boulder: Lynne Riener. Bilion, P. 2011. The Political Ecology of War: Natural Resources and Armed Conflict. 20 (5): 561–584. Black, Brian C. 2012. Crude Reality. Lanham, MD: Rowman & Littlefield. Browning, Noah. 2018. Nigeria Deploys Satellite Tech to Track Smugglers. London: Reuters. Burton, John. 1990. Conflict Resolution and Prevention. New York: St. Martins Press. Campbell, John. 2019. Dangote’s Oil Refinery Central to Nigeria Meeting Its Production Goals, Council on Foreign Relations. Available at https://www. cfr.org/blog/dangotes-oil-refinery-central-nigeria-meeting-its-productiongoals. Clarke, Duncan. 2008. Crude Continent: The Struggle for Africa’s Oil Prize. Glasgow: Profile Books. Colgan, Jeff D. 2013. Fueling the Fire: Pathways from Oil to War. International Security 38 (2): 147–180. Collier, Paul, and Anke Hoeffler. 2000. Greed and Grievance in Civil War. The World Bank. Available at http://elibrary.worldbank.org/content/ workingpaper/10.1596/1813-9450-2355. Accessed October 14, 2018. de Oliveira, Richard. 2007. Oil and Politics in the Gulf of Guinea. London: Hurst. Economist. 2018, Lourenço’s toil, Angola’s new president, João Lourenço, has made an encouraging start. Available at https://www.economist.com/ middle-east-and-africa/2018/05/03/angolas-new-president-joao-lourencohas-made-an-encouraging-start. Egbula, Margaret, and Qi Zheng. 2011. West Africa Challenges: China and Nigeria: A powerful South South Alliance. Paris, France: OECD. Galtung, Johan. 1990. Cultural Violence. Journal of Peace Research 27 (3): 291–305. Galtung, Johan. 1996. Peace by Peaceful Means: Peace and Conflict, Development and Civilization, 1st ed. International Peace Research Institute, Oslo (PRIO). Gregoratti, Catia. 2019. Human Security, Britannica. Available at https://www. britannica.com/topic/human-security. Accessed September 12, 2019. Homer-Dixon, Thomas F. 1999. Environment, Scarcity and Violence. Princeton, NJ: Princeton University Press. Jalloh, Mohamed. 2016. Natural Resources Endowment and Economic Growth: The West African Experience. Journal of Natural Resources and Development. Available at http://www.jnrd.info/2013/06/10-5027jnrd-v3i0-06/. Klare, Michael T. 2002. Resource Wars: The New Landscape of Global Conflict. New York: Holt Paperbacks.

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Lewis, Ian. 2018. Côte d’Ivoire’s Exploration Drive Rebooted. Available at https://www.petroleum-economist.com/articles/upstream/explorationproduction/2018/c%C3%B4te-d-ivoires-exploration-drive-rebooted. Accessed September 6, 2019. Litvin, Daniel. 2003. Empires of Profit: Commerce, Conquest, and Corporate Responsibility. New York: Texere. Oxford Institute for Energy Studies. 2019. Africa’s Oil and Gas Scene: After the Boom, What Lies Ahead, Issue 117. Ramsbotham, Oliver, Tom Woodhouse, and Hugh Miall. 2016. Contemporary Conflict Resolution, 4th ed. Cambridge: Polity Press. Ross, Michael L. 2004. What Do We Know About Natural Resources and Civil War? Journal of Peace Research 41 (3): 337–356. Sachs, Jeffrey D., and Andrew M. Warner. 1995. Natural Resource Abundance and Economic Growth. NBER Working Paper No. 5398, Issued in December 1995, Cambridge, MA. Smillie, Ian, Lansana Gberie, and Ralph Hazleton. 2000. The Heart of the Matter Sierra, Leone Diamonds and Human Security. Ottawa: Partnership Africa Canada PAC. UN Office for West Africa (UNOWA). 2002. Mission Reviews. Dakar, Senegal: UNOWA. United States Geological Survey. 2006. Geology and Total Petroleum Systems of the West-Central Coastal Province (7203) West Africa. Available at https:// pubs.usgs.gov/bul/2207/B/pdf/b2207b_508.pdf. Vines, Alex. 2010. Resurgent Continent? Africa and the World: Thirst for African Oil. IDEAS Reports—Strategic Updates, In SU004, ed. Nicholas Kitchen. London, UK: LSE IDEAS, London School of Economics and Political Science. West Africa Oil Watch. 2013. The Politics and Fiscal Dimensions of Sierra Leone’s Nascent Oil Industry, Country Brief, Unpublished Report. World Bank. 2012. World Bank: Data. Available at http://data.worldbank.org. Wright, Derek. 2007. The Emergence of African Democracy: A Study of Business Ethics in the Realm of Peace and Stability Operations. Journal of International Peace Operations 2 (5): 9.

Epilogue: West Africa and the Pandemic of Oil

Oil is a critical resource, a major source of energy for the global economy. It serves many functions. It propelled the rise of modern industrial society. It is the raw material used in the petrochemical industry to make products such as plastics, solvents, and a wide array of end-user goods, ranging from road construction to beauty products. Oil powers industry and propels vehicles, airplanes, and ships. It heats up homes and schools. It accounts for 97% of all fuel used by America’s mammoth fleet of cars, trucks, buses, planes, trains, and ships (Klare 2002, p. 7). It has played a central role in sustaining the economy of many countries. Oil is an indispensable factor in modern economies. Yet it is a non-renewable finite resource unevenly distributed around the world. It is found concentrated in few reservoirs: gulfs and basins in some of the most contested regions of the world. It cannot be developed and extracted in commercial quantity under conditions of total state collapse (Kaldor et al. 2007, p. 4). In other words, a functioning state is critical to the successful commercialization of oil. As one of the world’s most globalized natural resources, it is also shaped by events large or small. The Coronavirus (Covid 19) outbreak is one such seismic global event that has a debilitating effect on the industry. Due to nations’ lockdown and borders and international transportation severely restricted, demand for petroleum products has dropped to an all-time low, depressing prices in the process. For example, Nigeria and

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5

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Angola, which together supplied the United States with 1.2 million barrels of oil per day in 2000 (Klare 2002, p. 125–126), have seen demand for their crude oil drop precipitously. The socio-economic and political effects of the 2020 pandemic on the oil industry in general and on oilproducing regions, such as West Africa in particular, which have seen their main source of revenue plummet to a historic low, will be felt for many years to come, with major implications for peace and security both within and outside the subregion.

References Kaldor, Mary, Terry Lynn Karl, and Yahia Sahid. 2007. Oil Wars. London: Pluto Press. Klare, Michael T. 2002. Resource Wars: The New Landscape of Global Conflict. New York: Holt Paperbacks. US Energy Information Administration. 2018. Use of Oil—US Energy Information Administration. Available at https://www.eia.gov/energyexplained/oiland-petroleum-products/use-of-oil.php.

Index

A Anglo-Persian Oil Company (APOC), 53 Angola, 2, 3, 5, 6, 9–12, 16, 25, 26, 29–31, 33, 34, 36–38, 43, 45, 49, 55, 56, 58, 62–66, 68, 73, 75, 77, 78, 80, 81, 83, 88, 92, 97, 101, 103, 110, 116, 119, 123, 126, 136, 138, 144, 161, 167, 173, 174, 179, 192, 194, 195, 197–202, 204, 205 Assala, 47, 60 B Benin, 11, 35, 40, 41, 83, 84, 111, 147, 176, 199 Big Men, 48, 57, 61 Borders, 12, 20, 33, 167, 171–173, 178, 180, 182 Britain, 26, 30, 47, 50, 51 British Petroleum (BP), 5, 13, 31, 47, 51, 53, 56, 59, 64, 82, 199 British Petroleum Company, 53 Bunkering, 101, 130–132

C Cameroon, 10–12, 20, 30, 31, 35, 37, 38, 40, 41, 55, 66, 110, 121, 126, 147, 156, 172, 174, 177, 178, 181, 182, 185, 188, 196, 198 Chevron, 2, 31, 47, 55, 56, 64, 66, 79, 84 ChevronTexaco, 184 Chiefs, 113, 115, 124, 130 China, 2–4, 21, 25, 45, 55, 56, 62–65, 67, 97, 195, 201 Civil Society Platform on Oil and Gas (CSPOG), 129, 133, 148, 160 Colonial era, 26, 30, 32 Colonial period, 29, 30 Corporate Social Responsibility (CSR), 8, 13, 116, 133, 137, 186, 198 Corruption, 9, 58, 64, 65, 97, 101, 102, 129, 154, 155, 158, 160, 161, 167, 194, 195 Côte d’Ivoire, 31, 33, 35, 37, 40, 41, 49, 51, 56, 57, 66, 82, 111, 147,

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 V. Kanyako, Oil Revenues, Security and Stability in West Africa, https://doi.org/10.1007/978-3-030-37986-5

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INDEX

156, 159, 172–175, 177, 178, 181, 187, 196–202 D D’Arcy Corporation, 53 Deep water, 16, 34, 38–43, 55, 80, 92, 196, 197, 201 Downstream, 47, 58–60, 67, 109, 123, 128, 138, 146, 151, 194, 200 E Economic Community of West African States (ECOWAS), 1, 11, 35, 65, 66, 147, 159, 166, 177, 178, 185 Employment, 116, 123, 198 Equatorial Guinea, 3, 5, 11, 12, 16, 20, 34, 37, 38, 40, 43, 49, 55, 57, 65, 66, 68, 73, 78, 80, 82, 88, 91, 100–103, 113, 119, 122, 136, 137, 144, 165, 176–180, 182, 185, 196, 197, 199, 200 Exclusive Economic Zones (EEZs), 175, 182, 187, 188 Extractive Industries Transparency Initiative (EITI), 83, 129, 153, 155–157, 159, 161, 162, 185, 207 Exxon, 26, 32, 47 ExxonMobil, 2, 13, 46, 55, 56, 66, 68, 74, 82, 159, 184 F France, 26, 30, 31, 50, 55, 56, 67, 82, 172, 181 G Gabon, 3, 5, 7, 11, 12, 30, 31, 33, 37, 38, 41, 42, 47, 49, 51, 55,

57, 60, 61, 65, 66, 68, 73, 80, 83, 88, 103, 111, 119, 126, 127, 129, 130, 133, 134, 144, 159, 178, 179, 196, 197, 199–201 Gambia, 5, 10, 11, 31, 35, 37, 38, 41, 80, 173, 197, 199 Gas flaring, 120 Geology, 28, 38, 39, 42, 43, 52, 74, 79 Ghana, 2, 3, 5, 10–12, 17, 26, 30, 33–35, 37, 40, 41, 48, 49, 51, 54, 57–59, 66, 68, 78, 80–82, 91, 92, 96, 103, 111, 113, 116–118, 121, 123, 129, 133, 136, 146–148, 151, 156, 162, 165, 173–176, 181, 182, 187, 196–201, 204 Global economy, 12, 19, 21, 51, 55, 61, 68, 200, 207 Great Britain, 30, 31, 33, 50, 51 Guinea, 5, 10, 11, 31, 35, 37–39, 41, 54, 147, 159, 172, 178, 180, 187, 196, 199–202 Gulf of Guinea, 3, 4, 11, 13, 14, 25, 29, 30, 36, 38–42, 55, 59, 62, 80, 118, 195

H Host government contract, 87, 168 Human needs, 9, 15, 112, 193 Human rights, 7, 9, 21, 64, 65, 112, 115, 121, 126, 129, 144, 145, 150, 153, 154, 159, 167, 193, 206, 208, 209 Human security, 6, 9, 11, 15, 17, 19, 65, 74, 102, 103, 174, 193, 194, 198, 208, 209

INDEX

I Infrastructure, 47, 54, 59, 64, 65, 78, 97, 101, 103, 133, 175, 205, 208 The Institute for Multi-Track Diplomacy, 184 International Oil Companies (IOCs), 2, 4, 13, 14, 17, 26, 33, 41, 45, 46, 48, 52, 56, 59, 66, 67, 77, 84, 87, 88, 91, 92, 94, 95, 152, 168, 170, 186, 198, 199, 205 Iran, 28, 53, 55 Ivory Coast, 11, 12, 25, 37, 63

217

Militant, 135, 136, 138, 149, 208 Mobil, 46, 47, 54, 55, 74, 82 Monopoly rights, 26 Movement for the Emancipation of the Niger Delta (MEND), 135, 136, 203 Movement for the Survival of Ogoni People (MOSOP), 127, 149, 157, 179

L Liberia, 5, 6, 10–12, 17, 35, 37, 39, 41, 73, 74, 78, 80, 84, 86, 87, 92, 95, 102, 103, 111, 123, 133, 145, 147, 156, 172, 177, 187, 196, 197, 200–202 Liberia Oil and Gas Initiative (LOGI), 148, 155

N National Elections Watch, 145 National Oil Company (NOC), 57, 63, 83, 91, 92, 168, 170, 195 National Oil Company of Liberia (NOCAL), 92, 94–96 Niger Delta, 8, 10, 17, 26, 31, 38, 40, 54, 81, 110, 117, 120, 121, 127, 128, 130, 131, 134–136, 149, 150, 157–160, 168, 194, 208 Nigeria, 1–7, 9–12, 16, 17, 20, 26, 29–31, 33–35, 37, 40, 43, 45, 47, 49, 51–56, 58, 62, 65, 66, 68, 73, 76, 80, 81, 83, 84, 87, 88, 95–98, 101–103, 119–123, 126, 128, 132, 133, 135, 136, 146, 147, 149, 150, 156, 157, 161, 168, 172, 174, 176, 177, 179–182, 185, 188, 192, 194–203 Nigerian Bitumen, 31, 52, 54

M Mano River Union (MRU), 177, 178 Maritime disputes, 172, 176, 177, 181, 182, 187 Mauritania, 11, 35, 37–39, 110, 111, 156, 187, 196 Megaprojects, 97, 98, 103 Mehlimei rights, 115

O Offshore, 1, 3, 12, 16, 21, 31, 33, 38–43, 57, 75, 79–81, 84, 92, 94, 121, 136, 182, 197, 201, 202 Ogoni, 66, 127, 130, 151, 158, 159 Ogoniland, 81, 101 Oil-for-infrastructure deals, 64

J Jubilee fields, 3, 57, 58, 121, 173, 182, 197, 200, 201 Jubilee Oil Field, 2, 60

K Kosmos Energy, 48, 57, 59, 60

218

INDEX

Oil rents, 88, 89, 97, 198 Onshore, 16, 21, 30, 33, 34, 38–40, 42, 43, 47, 57, 75, 80, 121, 160, 197 Organization of Petroleum Exporting Countries (OPEC), 56, 74, 83, 91

P Peace and stability, 6, 9, 13, 17, 113, 138, 177, 191–193, 200, 209 Peace properties, 13, 21, 166, 175, 183, 185 Petro-capitalism, 6, 11, 15, 17, 18, 26, 111, 188, 200 Petronas, 66, 184 Principe, 11, 37, 40, 80, 182, 185, 197 Private equity, 59, 60 Publish What You Pay (PWYP), 129, 147, 153, 155, 162, 185

R Resource curse, 9, 13, 150, 156, 162, 184, 186, 191, 192

S Sâo Tomé, 11, 37, 40, 80, 182, 185 Saudi Arabia, 3, 28, 55, 61 Senegal, 5, 10, 11, 35, 38, 39, 75, 80, 83, 103, 111, 119, 133, 147, 156, 159, 161, 165, 172, 185, 197, 201 Senegal basin, 11, 13, 14, 38, 39, 42, 59 Shell, 13, 26, 30, 32, 46, 47, 51, 54, 55, 60, 64, 66, 74, 81, 101, 119–121, 127, 130, 131, 134, 135, 158, 160, 162, 168, 179, 192, 199

Sierra Leone, 5, 6, 10–12, 17, 32, 35, 37, 39, 41, 74, 78–80, 84, 87, 103, 111, 114–116, 123, 145, 147–149, 156, 162, 177, 178, 185, 194, 196, 197, 199–202, 204, 205 Sonangol, 58, 82, 92, 170, 195 State security, 17, 19, 102, 103, 193, 194, 198 Sweet crude, 2, 4, 21 T Technology, 1, 16, 27, 34, 41, 42, 68, 202 Texaco, 2, 47, 55, 82 Togo, 10, 11, 35, 37, 40, 92, 111, 147, 156, 176, 197, 199 Total, 50, 51, 55, 56, 129, 134 Transatlantic Slave Trade, 25 Transparency, 61, 112, 133, 144, 152, 153, 155–157, 159–162, 206 Transparency and accountability, 7, 8, 18, 66, 103, 149, 153, 156, 185, 198 Tullow, 41, 56, 57, 84, 117, 133 U Ultra-deep waters, 2, 3, 16, 34, 43, 55, 75, 81, 110, 136, 199 United Nations (UN), 33, 65, 153, 178–180, 187 United States (US), 3, 4, 20, 21, 26, 27, 38, 50, 51, 54, 56, 58, 61–64, 67, 84, 179, 200 Upstream, 16, 38, 47, 57–59, 67, 109, 116, 117, 123, 128, 138, 146, 194, 200 W West Africa Civil Society Forum, 146, 147

INDEX

West Africa Civil Society Forum (WACSOF), 147 West Africa Civil Society Institute (WACSI), 146, 147 West-central coast, 38 Wildcat, 27, 49, 74 Wildcatter, 29, 48, 52 Wildcatting, 27

219

Women, 102, 113, 117, 121, 122, 124, 126, 127, 146, 150, 206 Workforce, 134, 151

Y Youth, 40, 48, 113, 117, 124, 131, 150, 207