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With War, Africa Oil Beckons

The U.S., trying to cut its dependence on Mideast crude, hopes a Chad-to-Cameroon pipeline will deliver. The project is also supposed to benefit nations' poor.

March 21, 2003|Ken Silverstein | Times Staff Writer

WASHINGTON — After launching the ground invasion of Iraq, President Bush paused to have dinner Thursday with an unlikely guest, given the circumstances.

Bush and Secretary of State Colin L. Powell met in the White House with the leader of Cameroon for a discussion of "common interests."

Best known for poverty and corruption, Cameroon is among the nations being courted to support the war. But the country also figures prominently in a monumental new initiative to tap rich West African oil fields and reduce U.S. dependence on Middle Eastern oil, an aim that has taken on added urgency with the conflict in Iraq.

Construction is nearly complete on a $3.7-billion, 670-mile pipeline that will move hundreds of thousands of barrels of oil per day from landlocked Chad across Cameroon's tropical forests to its Atlantic coastline, where tankers will carry it to U.S. and European refineries.

The pipeline, which is being built by a consortium of Exxon Mobil Corp., ChevronTexaco Corp. and Petronas of Malaysia, also represents an ambitious attempt to avoid the corruption that has been a hallmark of energy development in Africa.

The participants, which include the World Bank Group, have pledged that, this time, pipeline revenue will benefit the poor and the environment will not be ravaged.

Chad, one of the world's poorest nations, has committed to spend its pipeline revenue on economic development and social programs. To guard against corruption, an oversight committee will control an offshore bank account for Chad, which owns the oil reserves and thus will collect most of the money. In Cameroon, residents were promised that development would be spurred by pipeline jobs, road-building and compensation to villagers affected by construction.

"We're going to be keeping a very close watch," the U.S. ambassador to Chad, Christopher Goldthwaite, said in an interview in N'Djamena, the capital. "If it works correctly ... it will be precedent-setting, and the experience here will be much, much better than in other oil-producing countries."

Already there are signs that achieving those lofty goals will be difficult.

President Idriss Deby of Chad spent $4.5 million from a "signing bonus" paid by the oil companies to purchase weapons to combat insurgents. On several occasions, the World Bank threatened to withdraw from the project if Deby didn't curtail human rights abuses. Security forces detained six opposition candidates after Chad's 2001 presidential election, and World Bank President James D. Wolfensohn had to phone Deby to win their release.

The promised pipeline jobs have turned out to be temporary, disappearing as each segment is completed.

Despite industry-sponsored efforts to discourage it, prostitution has proliferated along the pipeline route. Health professionals believe it is responsible for an upsurge in AIDS cases in Chad, a country that had been relatively insulated from the pandemic.

A World Bank committee monitoring the pipeline has warned of a two-track problem: The oil companies are well ahead of schedule in building the pipeline, but the two governments are far behind on the social and environmental programs that the oil money is supposed to fund.

The pipeline is the largest single investment in Africa, according to World Bank officials. When the pipeline is completed, Chad will become the fourth-largest oil producer in sub-Saharan Africa. The country is expected to receive at least $2.5 billion in net oil revenue over 25 years. Cameroon will collect an estimated $500 million in transit fees for allowing the pipeline to cross its territory en route to the Atlantic.

Wisely spent, the money could sharply reduce poverty and disease. Jan Piercy, the bank's U.S. executive director when it approved the project in 2000, predicted that the pipeline's success or failure would shape the future of international aid programs -- and the bank itself. "The stakes," she said at the time, "could not be higher."

Coups and Corruption

Foreign companies found oil reserves in Chad in the 1970s, but political chaos prevented their development. The country has been in a state of almost continuous civil war since attaining independence from France in 1960.

In 1982, the Reagan administration determined that Chad's president was too friendly with Moammar Kadafi, the ruler of neighboring Libya, and supported a coup. The new regime killed 40,000 people and tortured hundreds of thousands.

In 1990, Deby seized power. The State Department says his security forces also have tortured and killed political opponents. The government, which is largely dominated by Deby's tribe, barely functions in many parts of the country.

"Deby is more of an ethnic leader than a head of government," said Philippe Vasset of African Energy Intelligence, a Paris-based industry newsletter.

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