Nowadays, Angola Is Oil’s Topic A

Angola


A corrupt, underdeveloped and war-scarred country, Angola is one of the poorest lands on earth. But ask any energy executive these days and another picture emerges: a place of immense riches, solicitous of foreign investors and among the three fastest-growing oil exporters in the world today.

In the capital, Luanda, hotel rooms cost more than $200 a night and are booked two months in advance by the oil companies; three times a week, nonstop charter flights known as the Houston Express ferry workers to and from Texas; offshore, dozens of oil fields have been discovered and given names like Cola and Canela.

Exxon Mobil, Chevron, BP and others have poured billions into Angola in the last decade to unlock petroleum resources in the country’s deep waters, where the vast majority of the oil is, and the payoffs are finally coming in.

In recent years, Angola has become the fastest-growing source of oil exports to the United States and, along with Nigeria and smaller West African countries, it is about to become an important component of American energy security.

Within three years, producing nations in western Africa will account for one of every three new barrels pumped worldwide. By 2015, the United States is projected to import a quarter of its oil from Africa, up from 15 percent today.

Angola’s promise stems from a series of big discoveries some 100 miles offshore, which have increased the country’s oil production tenfold since the mid-1970s, to 1.5 million barrels a day in 2006. Next year, Angola is expected to reach two million barrels daily and by 2011, 2.6 million barrels, the equivalent of Kuwait’s output.


But Angola is finding itself at the crossroads of today’s energy geopolitics. It has become the latest stage in a global rivalry playing out among Western, Russian and Chinese oil companies. This year, it joined the Organization of the Petroleum Exporting Countries, which has been paring global supplies to keep prices from falling below $50 a barrel.

China has identified this country as a promising source in its rush for energy resources, providing billions in loans and development aid in return for favorable treatment of its oil interests. Last year, Angola overtook Saudi Arabia as the largest oil supplier to the Chinese. It is currently the sixth-biggest exporter to the United States.

The Angolan government seems emboldened by its new status as a member of the small club of big oil producers. The decision to join OPEC baffled energy analysts because it implied that Angola might have to slow its growth just when it seemed to be hitting the jackpot in oil.

But Angolan officials showed no signs of restraint when they appeared in Vienna for their first OPEC meeting. “We’ve been wanting this for a long time,” said the oil minister, Desidério da Costa, a long-faced technocrat who has been involved in the country’s energy sector since 1976. Manuel Vicente, the chairman of Sonangol, the national oil company, added, “It means we’re a real exporter now.” Western executives say OPEC membership is unlikely to affect their investments.


For consumers, relying on such volatile parts of the world where democratic institutions are weak and oversight of oil revenue is limited, could spell trouble. In the next decade, 70 percent of world oil production will be concentrated in 15 countries, compared with 55 percent today, according to Cambridge Energy Research Associates.

And Ian Bremmer of the Eurasia Group, a political risk consultant in New York, said, “Energy sources are going to come from increasingly unstable regions in the world.”

The Gulf of Guinea has some of the world’s greatest untapped oil reserves. From 1995 to 2005, western Africa accounted for 5 percent of all wells drilled worldwide but 21 percent of discoveries. Half of them were made in Angolan territory. Africa’s new importance has recently led to the creation of a separate Africa Command at the Pentagon.

“It’s a good story for consumers,” George L. Kirkland, a senior executive at Chevron, said. “The greater the diversity, the less your risk ― not just political, but also technical and commercial.”

Angola has about 11.4 billion barrels of proven reserves, according to Wood Mackenzie, an energy consulting firm in Edinburgh ― about the same as Brazil or Algeria, two medium-size producers, though much less than reserves in the Persian Gulf region.

But it is more than enough for big projects. Total has made 15 oil discoveries in Angola’s Block 17, about 100 miles offshore, since it began drilling there in the 1990s.

Since 2001, it has been producing 250,000 barrels a day from a Block 17 field called Girassol and plans to ramp up its output to 500,000 barrels a day by the summer with a $4 billion development named Dalia. Farther out, in the deeper waters of Block 32, Total has announced eight discoveries since 2003, including three so far this year ― Manjericão, Caril and Salsa.

Exxon Mobil and its partners produce more than 550,000 barrels a day, after having completed two $7 billion projects offshore, Kizomba A and Kizomba B in Block 15. In 2008, the company plans to bring on a third big field, Kizomba C.

And Chevron, which expects to double its western Africa production in the next four years, is planning an ambitious liquefied natural gas partnership in Angola with Sonangol that is projected to bring gas supplies to the United States in a few years. These projects are likely to make Angola much richer in coming years. But what the government in Luanda does with its oil wealth and where the money goes have long been frustrating matters for human rights groups. In 2001, for instance, Angola chastised BP for disclosing a $111 million fee without the government’s approval.

After that, officials clashed with the International Monetary Fund over opening the books to scrutiny. From 1997 to 2002, $4.2 billion was unaccounted for, according to an estimate by Human Rights Watch.

Since the war ended around five years ago, the Angolan government has made some progress in improving transparency. It publishes more details about its oil revenue and production and posts some of the data on the finance ministry Web site, though it is often out of date.

But Angola still fails to disclose how it spends money, including its budget. It ranks 142nd among 163 countries in Transparency International’s annual corruption perception index.

“Angola has no interest in transparency and there is no source of external leverage on the government right now,” said Monica Enfield, an analyst at PFC Energy, a consulting firm in Washington. “With all their oil revenue, they don’t need the I.M.F. or the World Bank. They can play the Chinese off the Americans.”

Rebels drag soldiers' bodies through Mogadishu streets

Somalia


Somali rebels dragged the bodies of two soldiers through the streets of Mogadishu today after a government assault on insurgent forces.

In scenes reminiscent of what happed after a US helicopter was shot down over the city in 1993, witnesses said they saw the bodies of a Somali soldier and an Ethiopian soldier being pulled along the ground and then set alight.

The 1993 incident, later chronicled in the film Black Hawk Down, led to the eventual withdrawal of UN troops from Somalia, which move plunged the country further into anarchy.

58 militants and tribespeople die in fighting in northern Pakistan

Pakistan


PESHAWAR, Pakistan: Fierce fighting between foreign militants and local tribesmen in northern Pakistan in the past few days has left at least 58 people dead, government and security officials said Tuesday.

Among the dead were 42 militants from Uzbekistan; an additional 27 were captured by a local tribal commander, officials said. Sixteen tribespeople were also reported killed, including four students on a bus caught in cross-fire.

The fighting, in the restive South Waziristan region, could signal a breakdown in relations between local tribal leaders and the Central Asian and Arab militants who had sought shelter in the tribal region near the Afghanistan border after United States forces routed the Taliban from Afghanistan in 2001.

The foreign militants, some of them linked to Al Qaeda, had enjoyed the support of the ethnic Pashtun tribes in remote villages where the authority of the Pakistani government had become almost nonexistent. Those relations have slowly frayed.

The latest fighting began this month between loyalists of a pro-government tribal elder and Uzbek militants who had repeatedly tried to assassinate him. More than 150 tribal elders have been killed in the last three years.

Intelligence officials say the Uzbek militant group, known as the Islamic Movement of Uzbekistan, led by Tahir Yaldashev, has a force of 800 to 1,000 fighters. Uzbeks and other Central Asians are thought to be the backbone of Al Qaeda in the region.

Tough constitutional reforms spur protests from Egyptian opposition

Egypt


It was Mr Mubarak who first proposed the 34 amendments. They include a formal ban on political parties being established on the basis of religion and changes to electoral laws - both of which are deemed to target the Muslim Brotherhood, the strongest opposition group.

Other proposals include reducing the role of the judiciary in supervising polling, which many fear will en-courage electoral fraud. They also allow for new anti-terrorism legislation, which reformers say would undermine citizens' rights.

The legislation would give police sweeping powers of arrest and authority to monitor communications, critics say, while enabling the president to refer "any terrorist crime to any of the judiciary authorities stated in the constitution or the law".

State of emergency laws have been in place since the 1981 assassination of President Anwar Sadat. Since then, thousands of people have been detained without trial. Mr Mubarak recently said the anti-terror law would be used only to fight terrorism, adding that the amendments were meant to strengthen political parties.

For Gaza, a Question of Responsibility

Palestine Israel


But the Israeli government retains control over all of Gaza's border crossings, except for the transit point to Egypt; the strip's airspace and coastal waters; and the population registry used to assign Palestinian identity cards. The United Nations continues to designate Gaza as occupied territory.

By declaring the end of the occupation in Gaza while maintaining it in the West Bank, said Samir Hulileh, a Palestinian economist who has been involved in negotiations with Israel for more than 15 years, Israel is trying to push the regions apart to prevent a future state from emerging. In the past, Israeli officials have talked favorably about Gaza eventually joining Egypt and about the West Bank establishing political links with Jordan, two countries with peace agreements with Israel.

While allowing thousands of Gazans into Israel each year for brief medical visits, the government now bars them from entering the West Bank, which remains a closed Israeli military zone. Israel pledged in the 1993 Oslo accords to treat Gaza and the West Bank as "a single territorial unit" pending the creation of a Palestinian state.


After the Oslo accords, tens of thousands of Palestinians returned to the territories on temporary travel documents from places of exile around the world, with the understanding they would receive Israel's authorization to hold identity cards issued by the Palestinian Authority. The Israeli government allowed the Palestinian Authority to issue the newcomers such cards -- needed to secure travel documents, enroll in universities and obtain medical insurance, among other basic services -- through an annual quota system.

Israel froze the process in the fall of 2000 after the outbreak of the second Palestinian uprising, leaving 25,000 to 30,000 Gaza families in need of identity cards.

Without them, they cannot arrange Palestinian travel documents needed to leave the strip, even for Israeli-sponsored humanitarian reasons. Israel canceled plans to restart the program after Hamas's election victory; the Israeli government now defends the cessation by citing its argument that the occupation has ended.

For U.S. and Sadr, Wary Cooperation

Iraq


BAGHDAD -- U.S. troops are conducting security sweeps in the Shiite stronghold of Sadr City for the first time in three years, part of a revamped plan to pacify the capital. Yet the Mahdi Army militia of Shiite cleric Moqtada al-Sadr has not risen up to fight them, despite U.S. raids on militia members' homes and growing Sunni attacks on Shiites.

"Until now, our leader has ordered us to keep quiet," explained Ayad al-Khaby, a local official in Sadr's organization. "This is in order for the security plan to succeed."

After four years of hostility, Sadr and the Americans are cooperating uneasily as the United States and Iraq attempt to tame Baghdad's sectarian violence. American officials, who in recent months described Sadr's Mahdi Army and other Shiite militias as the biggest threat to Iraq's stability, now praise the Shiite cleric.

The collaboration represents a remarkable shift for two adversaries who control the largest armies in Iraq and who fought some of the fiercest battles since the 2003 U.S.-led invasion.

For Sadr, it is the latest stage in an evolution from populist cleric to guerrilla fighter to political kingmaker and now to power broker. In the early months of the occupation, U.S. officials dismissed Sadr as irrelevant to Iraq's future. Today, they view him as a political catalyst who can help keep Iraq together -- or implode it.