- The Washington Times - Thursday, December 5, 2002

As King Midas discovered, gold can be less than a blessing. This is certainly true of black gold. Particularly in developing countries, revenue from oil development has fueled massive corruption, among other ills. The United States should be mindful of this curse as we applaud the leap of several African countries into the ranks of major oil producers.
When thinking oil, most think of the Persian Gulf. Saudi Arabia does possess the world's largest petroleum reserves. And Iraq, Iran, Kuwait and other Persian Gulf states are among the world's top oil producers. But, all together, Persian Gulf states provide only 23 percent of U.S oil imports.
Sub-Saharan Africa and oil are not often linked, even though African countries supply nearly 15 percent of U.S. oil imports. Last year, 1.5 million barrels of African oil came to American shores each day, including shipments from Nigeria, Angola, Gabon, Equatorial Guinea and Congo-Brazzaville. It is the continent's potential, though, that has gained notice lately. Africa could be supplying 25 percent of U.S. oil imports by 2015.
New technology allowing for deeper offshore drilling has made West Africa one of the world's top oil prospecting regions. With American and other energy companies set to invest billions of dollars more in the Gulf of Guinea, West African crude production will increase some 70 percent over the next couple of years. Nigeria will lead the way, producing up to three million barrels a day. That is why U.S. Energy Secretary Spencer Abraham earlier this year told Congress, "Energy from Africa plays an increasingly important role in our energy security." Another top U.S. official has even called Africa a "strategic interest" because of its oil potential.
Increased African oil production is good for our country. It means greater oil supply and a lower world price, aiding American consumers and boosting our economy. Moreover, African producers are apt to remain reliable. Only Nigeria is a member of the Organization of Petroleum Exporting Countries cartel, while political relations between these countries and the United States are generally good. With no Strait of Hormuz-like bottleneck, oil shipments to the United States from offshore fields in West Africa are in far less jeopardy than those originating from Persian Gulf states. This is especially important given the uncertainty surrounding the Persian Gulf region because of Iraq.
Yet bad governance in West Africa threatens its growing oil producer status. Three years after shedding a military dictatorship, now-democratic Nigeria still labors with deeply rooted corruption. While a decades-long civil war in Angola has mercifully wound down, one watchdog group has charged that a remarkable $1.4 billion dollars of its oil revenue went unaccounted for last year. There are troubling signs that once obscure Equatorial Guinea, a traditional coffee and cocoa producer, may be falling prey to bad government fueled by its recent oil revenue bonanza. Managing a flood of petrodollars and fending off corruption is not easy, but a deteriorating political and commercial environment could freeze African oil production if energy companies lose the stomach for investing in the region.
If new oil revenues are to advance development in Africa, the United States and others must promote transparency and the rule of law in its oil-producing countries. It is sobering that the average Nigerian today is worse-off than 25 years ago, despite the $300 billion in oil revenue the country has generated since then. That is why the Africa Subcommittee held a hearing earlier this year to look at the Chad-Cameroon pipeline project, which at $3.7 billion is the largest U.S. investment in Africa. This compact between energy companies, the World Bank, the two governments, and civil society aims to ensure that oil revenues actually benefit local citizens. It earmarks oil revenues for social spending and even some for future generations through internationally audited accounts. With the right pressure, such innovative features could be applied to other African oil-producing states.
Social needs in Africa's oil producing countries are immense. Roads and schools must be built, HIV/AIDS must be fought, and clean water wells must be drilled. New oil revenues could go far in addressing these pressing needs. The United States stands to gain from increased African oil production. We will gain the most, however, if these revenues are used to improve the lives of African people, not corrupt African rulers.

Rep. Ed Royce chairs the Subcommittee on Africa

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