US takes good look at west African oil
    By Michael Peel
    Financial Times
    July 25, 2002

    The US State Department is due to hold talks on Thursday with Olusegun Obasanjo, Nigeria's president, in the latest sign of deepening American interest in the oil-rich region around west Africa's Gulf of Guinea.

    Walter Kansteiner, US assistant secretary of state for African affairs, is in Nigeria on the second leg of a six-day trip that took him to Angola earlier this week.

    The visit to sub-Saharan Africa's two largest oil producers has focused attention on the strategic importance of this potential bulwark against disruption to Middle Eastern oil supplies.

    "[The US is] looking at alternative sources of energy from this part of the world," says Hassan Tukur, deputy director of the Nigeria-Sao Tome & Principe Joint Development Authority, an inter-governmental agency set up to manage oil resources. "That is the picture that is emerging."

    The State Department says oil is among the topics under discussion during Mr Kansteiner's visit to Nigeria, although it declines to give further details and says the talks will cover other issues, such as democracy, counter-terrorism and anti-drug trafficking measures.

    Mr Kansteiner spoke earlier this year of the "undeniable" US national strategic interest represented by African oil and told a congressional committee last month that the US put a high priority on ensuring Angola's natural resources could be developed for the benefit of the nation. US officials estimate Africa accounts for 15 per cent of US oil imports, and say that sub-Saharan Africa alone is expected to supply 25 per cent of America's crude requirements by 2015.

    Nigeria, which produces about 2m barrels of oil a day, is the world's sixth-largest oil exporter and the fifth-largest supplier to the US, while Angola's production is just under 1m barrels per day and growing fast.

    Both countries have large untapped offshore oil deposits that in Nigeria's case are expected to increase capacity by 50 per cent or more within the next few years.

    The attention the US is paying to western Africa is viewed in the region as evidence of contingency planning in case an American attack on Iraq, or other security problems in the Middle East, lead to oil distribution difficulties.

    "The Nato allies have worked through the issues of supply and demand," says one executive from an oil multinational operating in Nigeria. "The US government uses the security issue as leverage with the oil companies and the Nigerian government."

    The US is also being lobbied domestically to increase its involvement in western Africa, and even to extend its military involvement in the region. The National Energy Policy Development Group, an organisation established by President George W. Bush early in his administration, recommended last year that the US should form closer ties with Africa to promote geographic diversification of energy supplies and address issues as transparency, sanctity of contracts, and security.

    The Institute for Advanced Strategic & Political Studies, an Israeli lobby group that met President Obasanjo this month, claims the US is on the verge of a "historic, strategic alignment" with west Africa and that the region is "receptive to American presence".

    The institute has advocated the setting up of a US Gulf of Guinea military command: the island of Sao Tome, south of Nigeria and a possible site for a naval base, hosted a visit from a US general this week.

    The activity comes while the Nigerian government is facing calls at home to leave Opec, the association of oil exporting countries, and develop its oil trading relationship with the US instead.

    Production limits imposed by Opec are reducing tax revenues for the government, which draws more than 90 per cent of export earnings from the oil sector. Nigerian government officials estimate oil revenues could fall by 40 per cent this year, potentially creating political difficulties for Mr Obasanjo as he seeks re-election early next year.

    The government plans to make a statement next week on its relationship with Opec - an announcement that may reveal more about the tryst between the US and west Africa.


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