The contest among the foreign powers for West Africa has been surprisingly gentle in contrast to their outright displays of confrontations in Central Asia, proxy fights in Latin America, and the aggressive jockeying for power over the as yet-unproven Arctic region.
Inevitably, however, the growing foreign interest in West Africa’s natural resources will ensure their increased involvement in the region’s politics and conflicts.
Asian oil companies are no threat yet to Western interest, according to UK’s Chatham House. In a recent landmark study, Chatham House affirmed the dominance of Western interest in Africa’s oil and gas industry, despite the recent entry of national oil companies from Asia.
The study, ‘Thirst for African Oil: Asian National Oil Companies in Nigeria and Angola’, described Western fears about an Asian takeover in the Nigerian and Angola oil sector as “highly exaggerated”.
The heavyweights: Nigeria and Angola
In dealing with the outside world, neither Nigeria nor Angola, two of the region’s leading oil producers, fits into the stereotype of weak African state being ruthlessly exploited by its Asian counterpart. Until recently, Asian countries preferred to access Nigerian crude either through term supply contracts or spot buying rather than through direct investment, owing to the country’s political instability. In contrast, Angola has developed a successful relationship with China and its oil companies, with President José Eduardo dos Santos celebrating his 30th year in power in 2009.
Since 2004, Asian companies have begun to secure oil blocks in Nigeria and Angola, causing controversy in both countries and concern in Western capitals.
When he was in power from 1999 to 2007, Nigeria’s President Olusegun Obasanjo actively courted China, India, South Korea and Taiwan to acquire oil blocks in his country in return for their commitment to invest in infrastructure projects worth a total of US$ 20 billion. The Western oil companies that were Nigeria’s traditional partners expressed their concerns about the scheme, which ultimately failed, arguing that it tilted the playing field against them.
President Umaru Yar’Adua, who succeeded Obasanjo in May 2007, has reversed or cancelled many of the decisions of his predecessor on the grounds that they were not made in the national interest or were tainted with large-scale corruption.
Angola provides a contrast, with China cited as a success in crowding out its Asian rivals. India has yet to obtain a foothold in the country’s oil industry. Japan has held Angolan oil equity since 1986 but it too has failed to increase its stake.
China has made inroads into Angola by interlinking business and diplomacy. Business vehicles established by Hong Kong-based private business interests in partnership with Sinopec and the Angolan national oil company, Sonangol, have served the Chinese well in building up a portfolio of joint ventures with the Angolan leadership. In addition, China was quick to provide oil-backed loans for post-war reconstruction.
In return, China’s Sinopec group initially obtained oil equity through the Sonangol Sinopec International (SSI) business vehicle in a valuable deepwater block, operated by BP, against Indian competition. The World Bank has called this the ‘Angola mode’.
Sierra Leone and its neighbours in play
In September, an Anadarko Petroleum-led consortium announced that it had made a multi-billion-barrel find in an 1100 km stretch off Sierra Leone and its neighbours, Liberia, Cote d’Ivoire and Ghana.
Analysts believe Venus could hold at least 200 million bbls of light crude oil, with the potential for a string of connected reservoirs and fields running across Ghana, Sierra Leone, Cote d’Ivoire and Liberia. Nearby, Ghana’s Jubilee field, discovered in 2007, could hold up to two billion bbls, said UK’s Tullow Oil.
China, the US and Russia face off
In the long-term, there is little doubt that the superpowers will compete aggressively for the natural resources of West Africa.
The recent visits to Africa by US President Barack Obama and Secretary of State Hillary Clinton were part of the US government’s strategy to try offset China’s growing influence in the continent, particularly over claims to its energy resources.
Despite earlier diplomatic efforts by former President Vladimir Putin, Russia only marked its entry as a serious player into Africa in June when a high-powered delegation led by President Dmitry Medvedev signed major energy deals during a tour of Nigeria, Angola, Namibia and Egypt. The visit took place shortly after Moscow unveiled a US$ 500 million package to assist Africa’s economic development.
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