Tag Archives: conflict

Shell admits funding Niger Delta “warlords”

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I wrote a guest blog for Greenpeace UK today about Shell’s recent statement regarding its financial relationships with militant groups. I’d really like to hear your thoughts on the issue.

A recent video published online shows a Shell executive admitting that the oil giant could easily be funding what he describes as “warlords” and militants in Nigeria. You can watch the video here, (see 57mins – 1hr). The admission comes soon after the announcement that 11,000 Nigerians are due to take Shell to court in London over two major oil spills in the town of Bodo in 2008 to 2009. Shell has refused to pay adequate compensation for the destruction caused to the environment and livelihoods of local residents.

The new video shows the Managing Director of Shell Nigeria, Mutiu Sunmonu, speaking in central London on 9 February 2012. During the question and answer session, Tom Burgis of the Financial Times asks Mr. Sunmonu about the company’s financial relationships with armed militant groups in the Delta. Mr. Sunmonu responds:

Continue reading here.

 

Oil companies & RBS profited off state terror in Sudan

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A Chatham House event last Thursday launched the new report “Unpaid Debt: The Legacy of Lundin, Petronas and OMV in Sudan, 1997-2003,” on the role of oil companies in fuelling war and atrocities in Sudan.

A group of aid agencies that worked in Sudan during the civil war, the European Coalition on Oil in Sudan (ECOS), have called for an investigation into possible complicity by oil companies including Lundin in the commission of war crimes and crimes against humanity.

Royal Bank of Scotland’s support for Lundin Petroleum stretches back to late 2007, when PLATFORM research uncovered a $1 billion loan underwritten by the bank to support Lundin’s operations in East Africa, when the oil company was already under significant pressure for its role in bankrolling the Sudanese regime.

“Unpaid Debt” includes new evidence showing that the companies, in particular Lundin Petroleum, “enabled the commission of war crimes”. The report says that the start of oil exploration in Block 5A in Southern Sudan set off a spiral of violence as the Sudanese government and forces loyal to them set out to assert control of the oil fields. Thousands of inhabitants died, and almost 200,000 people were violently displaced. Atrocities included killings, rape, child abduction, torture, the destruction of schools, markets and clinics and the burning of food and shelter. During this period, Lundin constructed an air strip, which the local Governor admitted was used by military bombers to arbitrarily raided nearby villages for years.

Memos referenced include this on page 78:

“Subject: Guarding of the Oil Companies 
1. Reference is made to the above-mentioned subject brigade 28 Rubkona is instructed to provide all you asked for (weapon, ammunition artilleries commodity supplies) according to the list. [...]
3. In regards to vehicles, oil companies will avail some cash through Ministry of Energy and Mining.
4. You are now to clean all the villages and pockets of the rebels that are near areas of exploration up to Gogrial’s border.”
Instructions from Col. Ibrahim Shams el Din, State Minister of National Defence, to Maj. Gen. Matiep, July 27, 1998, as
filed in the US District Court.313″

PLATFORM reveals Congo oil contracts that threaten resource wars and $10 billion rip-off

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Tullow & British Embassy push disputed deal that could cut Congo’s revenues by $10 billion

Confidential oil contracts held by UK companies Tullow and Heritage in the Democratic Republic of Congo were leaked today, revealing the danger of economic rip-off and rights abuses in one of Africa’s most unstable countries.

The Production Sharing Agreements (PSAs) are accompanied by a legal analysis, ”A Lake of Oil – Congo’s controversial contracts compromise rights, environment & safety”, published in English and French by PLATFORM in partnership with the African Institute for Energy Governance (Afiego).

As the dispute between Tullow/Heritage and the South African-led Divine Inspiration consortium over lucrative oil licences on Lake Albert comes to a head [2], the contract terms have been released for the first time. [3] PLATFORM’s analysis compares revenues delivered by two competing contracts, revealing that:

* Both Tullow/Heritage & Divine/H Oil’s contracts guarantee excessive profits, at the expense of Congo’s poor
* Tullow’s contract terms reduce the Congolese take by around 15%, compared to Divine’s.
* If recognised, Tullow’s contract will cut Congolese government revenues by over $10 billion – a figure equivalent to the country’s entire national debt. Tullow and the British Embassy in Kinshasa have been lobbying hard for these contract terms. This represents a significant transfer of wealth from some of Africa’s poorest to British and Irish investors.

In ”A Lake of Oil”, PLATFORM also raises concerns about:

* Co-operation between oil companies and military groups and the likelihood of escalating resource-driven war in eastern Congo.
* The legal rights granted to flare natural gas
* The complete absence of penalties for environmental damage
* The ‘stabilisation clause’, which will restrict DRC’s ability to improve its environmental protection and human rights standards in the future

Alfred Buju, head of the Justice and Peace Commission in Ituri, DRC, at the heart of Exploration Block 2, said: “This report reveals the contracts that will affect our communities and raises serious concerns about who will benefit from oil extraction in Ituri. We need the government and international companies to be honest and clear – will our environment be protected? The history of natural resources in eastern DRC makes us worry that oil will lead to more conflict.”

PLATFORM Campaigner Mika Minio-Paluello said, ”The reality is that extracting Congolese crude will escalate resource wars, transfer wealth from Congo’s poorest to London’s richest, create new health problems for local communities, increase corruption and pollute the land, water and air. It is up to social movements and civil society to create the pressure to defend rights, livelihoods and Congo’s rich environment.”

PLATFORM Researcher Taimour Lay in Bunia, Congo DRC, said “The confidential documents we have published make clear that the British government and oil companies have been lobbying for terms which leave Congo significantly worse off than another contract already on the table. This shows a wanton prioritisation of profit and British control of African resources over all else.”

Taimour Lay added, “Tullow’s statements demonstrate strength in corporate responsibility rhetoric. Yet their practice here on Lake Albert tells a different story – one of arrogance, environmental damage, collusion in secrecy and indifference to human rights abuses.”

US Army = “oil protection service” in Africa?

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“The U.S. military has come to serve as a global oil protection service, guarding pipelines, refineries and loading facilities in the Middle East and elsewhere.” – US academic Michael Klare

The UPI article below references the Tullow discovery in Sierra Leone in the context of US attempts to increase military control over the African continent. The foundation of US Army’s new AFRICOM command in 2008 and ongoing expansion of military activities on the continent (eg $500 million for the Trans-Sahara Counter-Terrorism Initiative in Algeria, Niger and neighbouring countries) is seen by many as an attempt to guarantee oil supplies.

Also see Rageh Omar on AlJazeera International investigating the US military’s current role in Africa. The first episode “A Self-Fulfilling Prophecy” covers Africom provision of arms, military support and training to Sahel and West African regimes rich in oil, often against the interests of the local populations.

 

FREETOWN, Sierra Leone, Sept. 17 (UPI) — Potentially major oil strikes announced by an American-led consortium and a British company in West Africa have bolstered the region’s reputation as the world’s hottest energy zone.
It has also become the focus of the U.S. military’s global mission to protect America’s energy supplies, a development that critics fear will trigger more trouble than it will prevent.
The Texas-based Anadarko Petroleum Corp. said Wednesday its deepwater Venus 1B well off the coast of Sierra Leone had hit paydirt and formed one of two “bookends” 700 miles apart across two prospective basins that extend into waters controlled by Liberia, Cote d’Ivoire and Ghana.
These could each contain 150 million to 1 billion barrels of oil, according to Anadarko’s CEO Al Walker.
One of Anadarko’s consortium partners, Tullow Oil of Britain, which has a vast array of licenses in Africa, recently announced a new potentially important discovery in its Ngassa field in Uganda.
By 2025, the United States is expected to be importing about one-fifth of its oil from West Africa. That makes the region strategically important to the United States.
In the scramble for new oil reserves as the planet’s older fields become depleted, the U.S. military has become a predominant force in U.S.-African relations.
Witness the 2008 inauguration of the U.S. military’s latest command, Africa Command, or Africom, launched a year earlier in February 2007 by the George W. Bush administration, for whom energy security was of paramount importance.
The Bush team insisted that Africom was intended to promote a humanitarian agenda, strengthen democracy in a continent noted for its tyrants and dictators, and improve economic growth. President Barack Obama’s administration endorsed that.
But many African see Africom’s mission in more menacing terms: ensuring that the United States gets most of Africa’s oil, not China or India, which need it to fuel their burgeoning economies.
“While Obama administration officials insist that U.S. policy toward Africa is not being militarized, the evidence seems to suggest otherwise,” says Gerald LeMelle, executive director of Africa Action, a non-governmental organization.
LeMelle and other Africom critics argue that the new command — which is headquartered in Stuttgart, Germany, because no African government will give it a home — will only serve to keep dictators like the widely shunned President Teodoro Obiang Nguema of Equatorial Guinea, who overthrew his uncle in a 1979 military coup, in power.
Obama vowed that he would rid the United States of the “tyranny of oil” by developing alternative sources of energy when he got to the White House in January.
But Michael T. Klare, a U.S. energy specialist and professor of peace and world security studies at Hampshire College, argues that in the years ahead the United States, as well as Europe, will condemn millions of people to the tyranny of dictators.
The United States, he said, “will remain dependent on oil derived from authoritarian regimes, weak states and nations in the midst of civil war.”
That pretty much covers Africa as it is today.
This process of militarizing the energy business, and supporting unsavory regimes, began with the enunciation of the Carter Doctrine by President Jimmy Carter in his State of the Union address on Jan. 23, 1980, soon after the Islamic revolution triumphed in Iran and the Soviets invaded Afghanistan.
This principle, endorsed and even expanded by successive presidents, stated that the United States would use military force against any power that threatened its access to Middle Eastern oil.
That, Klare said in a January 2009 analysis, “led to U.S. involvement in three major wars and now risks further military entanglement in the greater Gulf area.”
“The U.S. military has come to serve as a global oil protection service, guarding pipelines, refineries and loading facilities in the Middle East and elsewhere,” he said in a 2008 analysis.
According to an estimate by the conservative U.S. National Defense Council Foundation, “The ‘protection’ of Persian Gulf oil alone costs the U.S. Treasury $138 billion a year — up from $49 billion just before the invasion of Iraq,” Klare says.
Far from protecting U.S. energy supplies, he argues, this doctrine “to protect foreign oil supplies is likely to create anything but ‘security.’ It can, in fact, trigger violent ‘blowback’ against the United States. … If anything, this spiral of militarized insecurity is worsening.”

Biden eats Iraqi pie with American fork

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Obama’s administration is continuing Bush’ policy of demanding that the Iraqi government hand over highly profitable oil contracts to Western oil companies.

According to UPI, during a visit to Baghdad this month, Vice-Pres Biden was

“hustling on behalf of the U.S. oil giants who have long dreamed of getting their hands on what may be the largest untapped oil reserves in the world. “

Biden lobbied Iraqi PM Maliki hard for the oil law (to guarantee long-term profits for foreign corporations) to be “passed at the earliest possible date” and to “make their terms more attractive to foreign investors”. During the visit, a senior US official traveling with Biden declared that

“Ultimately, in our judgment, it’s in the interest of every Iraqi to accept a smaller piece of a much bigger pie.”

The reality is that Iraq’s “pie” of oil is pretty fixed – there’s a certain number of barrels of oil under Iraq’s surface. Of course, it’s possible to increase current production rates – but that’s merely using a bigger fork to eat the pie, not baking a bigger pie.

It’s unclear how the Iraqi population will benefit from a larger fork, if US-promoted terms mean the hand holding the fork (controlling production levels) and the mouth eating the pie (receiving revenues) is increasingly a foreign company. And how will the very young Iraqi population benefit from creating laws that fix the type of fork to be used for the next 20 years?

The US aide’s comment raises questions of power over Biden’s visit & Obama’s policies towards Iraqi oil – whose hands are holding the knives cutting up Iraq’s oil pie? Is the US administration taking advantage of the low oil price to rip off Iraq’s population in the interests of Exxon & Chevron?

PLATFORM’s report “Crude Designs – The Rip-Off of Iraq’s Oil Wealth” exposed how the Production Sharing Agreements being pushed by the UK & US & oil companies including BP and Shell could lead to Iraq losing well over $100 billion of revenues.

Biden hustles terms on Iraq oil contracts

BAGHDAD, Sept. 18 (UPI) — U.S. Vice President Joe Biden’s visit to Baghdad earlier this week — his third this year — came hot on the heels of a lightning visit by Russia’s energy minister as the scramble for Iraq’s oil riches heats up.
Just as Sergei Shmatko sought favorable terms for Russian companies in an upcoming oil contract auction, Biden was hustling on behalf of the U.S. oil giants who have long dreamed of getting their hands on what may be the largest untapped oil reserves in the world.
Biden urged Prime Minister Nouri al-Maliki to resist the temptation to demand hefty payments from the international oil companies as the price for doing business with the new Iraq when a new auction of contracts is held in Baghdad in December.
The first auction in June fizzled when only one consortium — BP and China National Petroleum Co. — made a deal by accepting Baghdad’s offer of only $2 for every barrel of oil it produced. Nine other licenses were rebuffed by major oil companies.
Like every other bidder in that auction, BP and CNPC had wanted $4 per barrel. The others refused to budge from their bids.
Iraqi officials have said Baghdad has lowered its demands for the December auction. But it is not known what figure they will go with when they put up 10 projects covering more than a dozen fields for development.
There is speculation that this time around the oil companies will demand higher fees to compensate for the worsening security situation, a crisis that is likely to worsen as U.S. forces continue their withdrawal.
Still, Oil Minister Hussain Shahristani remains optimistic. “We expect a better match between our expectations and what the companies will bid in the second round,” he said this month.
Biden stressed that the Iraqis must make their terms more attractive to foreign investors if they are to amass the $50 billion they say they need to upgrade their long-neglected energy industry and boost production to provide the revenue required for reconstruction.
A senior official with Biden calculated that a deal on a single oil field could reap $50 billion to $60 billion in outside investments, produce $600 million a year in revenue and create as many as 200,000 jobs if Baghdad lowered its demands at the December auction.
Another major problem is the government’s failure to produce an oil law that would regulate foreign participation in Iraq’s oil industry.
It languishes in Parliament, paralyzed by sectarian rivalries, particularly between the Kurds, who claim the northern Kirkuk oil fields, and Iraq’s Shiite-dominated Arabs.
In the absence of a parliamentary ruling, the Oil Ministry has decreed that a Cabinet decision will be sufficient to legitimize foreign participation stemming from the auctions.
But the oil companies remain extremely wary of investing vast sums of money in those circumstances.
Biden apparently went out of his way in meetings with Maliki and half a dozen other top officials during his three-day visit to emphasize that the critical hydrocarbon law must be passed at the earliest possible date if Iraq is to determine its economic future.
But there was no sign that an agreement on this was in the cards any time soon to ward off the possible fragmentation of the country into Shiite, Sunni and Kurdish zones.
Maliki is increasingly beleaguered and seems powerless to find a solution to the problem.
He is currently fighting for his political survival amid a deteriorating security crisis triggered in part by the U.S. troop withdrawal and being abandoned by his Shiite political allies who will challenge him in the January polling.
Before he left, Biden conceded that “a number of problems, whether it is the oil law or some of the disputed internal boundaries, are going to have to wait for final resolution until after the election.”
His visit ended on that note of uncertainty, with the senior American official commenting, seemingly with more hope than expectation, “Ultimately, in our judgment, it’s in the interest of every Iraqi to accept a smaller piece of a much bigger pie.”

New oil discoveries to drive future conflicts in West Africa?

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New oil finds off the coast of West Africa raise fears of oil corporations causing increased militarization in a region not yet touched by the crude resource curse.

In mid-September US corp Anadarko and Irish/British company Tullow announced a major oil-discovery off the coast of Sierra Leone. The FT’s map below shows how this find coupled with Tullow/Anadarko’s existing Jubilee field off Ghana

”established a whole new, active hydrocarbons system that spanned at least 1,000km to the coast of Ghana and perhaps all the way to the Latin American nation of Guinea.”

According to the FT, Tullow & Anadarko have snapped up the right to explore much of the coastline between their Ghanaian field and the Venus well off Sierra Leone. We might also see the larger oil majors like BP or Shell trying to buy their way into this new basin, expanding their existing operations in the Niger Delta further west.

”The basin could be a game changer for the industry. Analysts at Sanford Bernstein believe it could attract big companies which are not present there.”

Tullow Oil is attracting attention both for its rapid expansion in Africa and for concerns over its role in feeding conflict and militarization. In 2008 the Congo-DRC government accused Tullow of enlisting the Ugandan army to cross the border into North Kivu to conduct prolonged military operations inside its territory, and as a result confiscated Tullow’s licences in the region.

However, Tullow was allowed to return to Congo (DRC) after a March 2009 agreement between Pres Museveni of Uganda & Pres Kabila of DRC covering military co-operation & collaboration in exploiting oil discoveries by Lake Albert (on the border). The agreement and joint Ugandan & Congolese attacks on militias in the area in spring seemed to leed to response attacks from the rebels.

In Uganda itself, there has been increasing government talk of the “threat” to the Lake Albert region and oil operations there from “new groups”. This is probably partly to justify the building of “oil surveillance posts” – army bases – being built near to Tullow & Heritage’s oil operations. To construct a new base near Hoima, the government plan to evict 2,000 families living on 10 square miles surrounding a refugee settlement. While local residents & MPs have promised to resist the eviction, an empathetic army spokesman said “They [the refugees] are lucky we are not charging them with criminal trespass.”

Increased conflict connected to Tullow is not restricted to onshore oil extraction. The company owns a 32% stake in offshore oilfields on the Bangladeshi-Burmese border, which have led to recent naval escalation between gun boats over maritime boundaries.

While the Niger Delta’s ongoing conflict is very specific to its history of environmental exploitation and repression of local communities, the role of both the state and oil companies in creating & feeding the conflict is clear. Liberia and Sierra Leone are still recovering from civil wars fuelled by resources destined for European and American markets, including diamonds & timber. The seeming militarising impact of Tullow’s operations elsewhere does not bode well for Sierra Leone, Liberia or Ivory Coast.