Global Policy Forum

By F William Engdahl *

To paraphrase the famous quip during the 1992 US presidential debates, when an unknown William Jefferson Clinton told then-president George Herbert Walker Bush, "It's the economy, stupid," the present concern of the current Washington administration over Darfur in southern Sudan is not, if we look closely, genuine concern over genocide against the peoples in that poorest of poor part of a forsaken section of Africa. No. "It's the oil, stupid." The case of Darfur, a forbidding piece of sun-parched real estate in the southern part of Sudan, illustrates the new Cold War over oil, where the dramatic rise in China's oil demand to fuel its booming growth has led Beijing to embark on an aggressive policy of - ironically - dollar diplomacy. With its more than US$1.2 trillion in mainly US dollar reserves at the Peoples' National Bank of China, Beijing is engaging in active petroleum geopolitics. Africa is a major focus, and in Africa, the central region between Sudan and Chad is a priority. This is defining a major new front in what, since the US invasion of Iraq in 2003, is a new Cold War between Washington and Beijing over control of major oil sources. So far Beijing has played its cards a bit more cleverly than Washington. Darfur is a major battleground in this high-stakes contest for oil control.

China oil diplomacy

In recent months, Beijing has embarked on a series of initiatives designed to secure long-term raw materials sources in one of the planet's most endowed regions - Sub-Saharan Africa. No raw material has higher priority in Beijing at present than oil. Today China draws an estimated 30% of its crude oil from Africa. That explains an extraordinary series of diplomatic initiatives which have left Washington furious. China is using no-strings-attached dollar credits to gain access to Africa's vast raw material wealth, leaving Washington's typical control game via the World Bank and International Monetary Fund (IMF) out in the cold. Who needs the painful medicine of the IMF when China gives easy terms and builds roads and schools to boot?

In November last year Beijing hosted an extraordinary summit of 40 African heads of state. They literally rolled out the red carpet for the leaders of, among others, Algeria, Nigeria, Mali, Angola, Central African Republic, Zambia and South Africa. China has just done an oil deal that links it with two of the continent's largest nations, Nigeria and South Africa. China National Offshore Oil Corporation (CNOOC) will lift oil in Nigeria, via a consortium that also includes South African Petroleum Co, giving China access to what could be 175,000 barrels a day by 2008. It's a $2.27 billion deal that gives state-controlled CNOOC a 45% stake in a large off-shore oil field in Nigeria. Previously, Nigeria had been considered in Washington to be an asset of the Anglo-American oil majors, ExxonMobil, Shell and Chevron.

China has been generous in dispensing its soft loans, with no interest or as outright grants, to some of the poorest debtor states of Africa. The loans have gone into infrastructure, including highways, hospitals, and schools, a stark contrast to the brutal austerity demands of the IMF and World Bank. In 2006 China committed more than $8 billion to Nigeria, Angola and Mozambique, versus $2.3 billion to all sub-Saharan Africa from the World Bank. Ghana is negotiating a $1.2 billion Chinese electrification loan. Unlike the World Bank, a de facto arm of US foreign economic policy, China shrewdly attaches no strings to its loans. This oil-related Chinese diplomacy has led to the bizarre accusation from Washington that Beijing is trying to "secure oil at the sources", something Washington foreign policy has itself been preoccupied with for at least a century. No source of oil has been more the focus of China-US oil conflict of late than Sudan, home of Darfur.

Sudan's oil riches

Beijing's China National Petroleum Company (CNPC) is Sudan's largest foreign investor, with some $5 billion in oil field development. Since 1999 China has invested at least $15 billion in Sudan. It owns 50% of an oil refinery near Khartoum with the Sudan government. The oil fields are concentrated in the south, site of a long-simmering civil war, partly financed covertly by the United States to break the south from the Islamic Khartoum-centered north. CNPC built an oil pipeline from southern Sudan to a new terminal at Port Sudan on the Red Sea, where the oil is loaded on tankers bound for China. Eight percent of China's oil now comes from southern Sudan. China takes 65-80% of Sudan's 500,000 barrels/day production. Sudan last year was China's fourth-largest foreign oil source.

In 2006 China passed Japan to become the world's second-largest importer of oil after the United States, importing 6.5 million barrels a day of the black gold. With its oil demand growing by an estimated 30% a year, China will pass the US in oil import demand in a few years. That reality is the motor driving Beijing foreign policy in Africa. A look at the southern Sudan oil concessions shows that China's CNPC holds rights to bloc 6, which straddles Darfur, near the border with Chad and the Central African Republic. In April 2005, Sudan's government announced that it had found oil in Southern Darfur, which is estimated to be able to pump 500,000 barrels per day when developed. The world press forgot to report that vital fact in discussing the Darfur conflict.

Move to militarize Sudan's oil region

Genocide was the preferred theme, and Washington was the orchestra conductor. Curiously, while all observers acknowledge that Darfur has seen a large human displacement and human misery, with tens of thousands or even as many as 300,000 deaths in the last several years, only Washington and the non-governmental organizations (NGOs) close to it use the charged term "genocide" to describe Darfur. If they are able to get popular acceptance of the charge of genocide, it opens the possibility of drastic "regime change" intervention by the North Atlantic Treaty Organization (NATO) - read Washington - in Sudan's sovereign affairs. The genocide theme is being used, with full-scale Hollywood backing from the likes of stars like George Clooney, to orchestrate the case for de facto NATO occupation of the region. So far the Sudan government has vehemently refused, not surprisingly.

The US government repeatedly uses "genocide" to refer to Darfur. It is the only government to do so. US Assistant Secretary of State Ellen Sauerbrey, head of the Bureau of Population, Refugees and Migration, said during a USINFO online interview last November 17, "The ongoing genocide in Darfur, Sudan - a gross violation of human rights - is among the top international issues of concern to the United States." The Bush administration keeps insisting that genocide has been going on in Darfur since 2003, despite the fact that a five-person UN mission led by Italian Judge Antonio Cassese reported in 2004 that genocide had not been committed in Darfur but grave human rights abuses were committed. They called for war crime trials.

Merchants of death

The United States, acting through surrogate allies in Chad and neighboring states has trained and armed the Sudan Peoples' Liberation Army, headed until his death in July 2005 by John Garang, trained at the US Special Forces school at Fort Benning, Georgia. By pouring arms into first southeastern Sudan and since discovery of oil in Darfur into that region as well, Washington fueled the conflict that led to tens of thousands dying and several million driven to flee their homes. Eritrea hosts and supports the Sudan People's Liberation Army (SPLA), the umbrella NDA opposition group, and the Eastern Front and Darfur rebels.

There are two rebel groups fighting in Sudan's Darfur region against the Khartoum central government of President Omar al-Bashir - the Justice for Equality Movement and the larger Sudan Liberation Army (SLA). In February 2003, the SLA launched attacks on Sudan government positions in the Darfur region. SLA secretary-general Minni Arkou Minnawi called for armed struggle, accusing the government of ignoring Darfur. "The objective of the SLA is to create a united democratic Sudan." In other words, regime change in Sudan.

The US Senate adopted a resolution in February 2006 that requested NATO troops in Darfur, as well as a stronger UN peacekeeping force with a robust mandate. A month later, President George W Bush also called for additional NATO forces in Darfur. Genocide? Or oil? The Pentagon has been busy training African military officers in the US, much as it has trained Latin American officers for decades. Its International Military Education and Training program has provided training to military officers from Chad, Ethiopia, Eritrea, Cameroon and the Central African Republic.

Much of the arms that have fueled the killing in Darfur and the south have been brought in via murky, protected private "merchants of death" such as the notorious former KGB operative, now with offices in the US, Victor Bout, who has been cited repeatedly in recent years for selling weapons across Africa. US government officials strangely leave his operations in Texas and Florida untouched despite the fact he is on the Interpol wanted list for money laundering. US development aid for all Sub-Saharan Africa, including Chad, has been cut sharply in recent years while its military aid has risen. Oil and the scramble for strategic raw materials is the clear reason. The region of southern Sudan from the Upper Nile to the Chad border is rich in oil. Washington knew that long before the Sudanese government.

Chevron's 1974 oil project

US oil majors have known about Sudan's oil wealth since the early 1970s. In 1979, Jafaar Nimeiry, Sudan's head of state, broke with the Soviets and invited Chevron to develop the country's oil industry. That was perhaps a fatal mistake. UN Ambassador George H W Bush had personally told Nimeiry of satellite photos indicating oil in Sudan. Nimeiry took the bait. Wars over oil have been the consequence ever since. Chevron found big oil reserves in southern Sudan. It spent $1.2 billion finding and testing them. That oil triggered what is called Sudan's second civil war in 1983. Chevron was the target of repeated attacks and killings and it suspended the project in 1984. In 1992, it sold its Sudanese oil concessions. Then China began to develop the abandoned Chevron fields in 1999 with notable results. But Chevron is not far from Darfur today.

Chad oil and pipeline politics

Condoleezza Rice's Chevron is in neighboring Chad, together with the other US oil giant, ExxonMobil. They've just built a $3.7 billion oil pipeline carrying 160,000 barrels per day from Doba in central Chad, near Darfur, via Cameroon to Kribi on the Atlantic Ocean, destined for US refineries. To do it, they worked with Chad "President for life" Idriss Deby, a corrupt despot who has been accused of feeding US-supplied arms to the Darfur rebels. Deby joined Washington's Pan Sahel Initiative run by the Pentagon's US-European Command, to train his troops to fight "Islamic terrorism". Supplied with US military aid, training and weapons, in 2004, Deby launched the initial strike that set off the conflict in Darfur. He used members of his elite Presidential Guard, who come from the province, providing them with all-terrain vehicles, arms and anti-aircraft guns to aid Darfur rebels fighting the Khartoum government in southwestern Sudan. The US military support to Deby in fact had been the trigger for the Darfur bloodbath. Khartoum reacted and the ensuing debacle was unleashed in full, tragic force.

Washington-backed NGOs and the US government claim unproven genocide as a pretext to ultimately bring UN/NATO troops into the oil fields of Darfur and southern Sudan. Oil, not human misery, is behind Washington's new interest in Darfur. The "Darfur genocide" campaign began in 2003, the same time the Chad-Cameroon oil pipeline began to flow. The US now had a base in Chad to go after Darfur oil and, potentially, co-opt China's new oil sources. US military objectives in Darfur - and the Horn of Africa more widely - are being served at present by US and NATO backing for African Union (AU) troops in Darfur. There NATO provides ground and air support for AU troops who are categorized as "neutral" and "peacekeepers". Sudan is at war on three fronts, against Uganda, Chad, and Ethiopia, each with a significant US military presence and ongoing US military programs. The war in Sudan involves both US covert operations and US trained "rebel" factions coming in from south Sudan, Chad, Ethiopia and Uganda.

Chad's Deby looks to China too

The completion of the US and World Bank-financed oil pipeline from Chad to the Cameroon coast was designed as one part of a far grander Washington scheme to control the oil riches of Central Africa from Sudan to the entire Gulf of Guinea. But Washington's erstwhile pal, Chad's Deby, began to get unhappy with his small share of the US-controlled oil profits. When he and the Chad parliament decided in early 2006 to take more of the oil revenues to finance military operations and beef up its army, the new World Bank president - and Iraq war architect - Paul Wolfowitz moved to suspend loans to the country. Then that August, after Deby had won re-election, he created Chad's own oil company, SHT, and threatened to expel Chevron and Malaysia's Petronas for not paying taxes owed, and demanded a 60% share of the Chad oil pipeline. In the end he came to terms with the oil companies, but winds of change were blowing. Deby also faces growing internal opposition from a Chad rebel group, United Front for Change, known under its French name as FUC, which he claims is being covertly funded by Sudan. The FUC has based itself in Darfur.

Into this unstable situation, Beijing has shown up in Chad with a full coffer of aid money in hand. In late January, Chinese President Hu Jintao made a state visit to Sudan and Cameroon among other African states. In 2008, China's leaders visited no less than 48 African states. In August 2006, Beijing hosted Chad's foreign minister for talks and resumption of formal diplomatic ties cut in 1997. China has begun to import oil from Chad as well as Sudan. Not that much oil, but if Beijing has its way, that will soon change. This April, Chad's foreign minister announced that talks with China over greater China participation in Chad's oil development were "progressing well". He referred to the terms the Chinese seek for oil development, calling them "much more equal partnerships than those we are used to having". The Chinese economic presence in Chad, ironically, may be more effective in calming the fighting and displacement in Darfur than any AU or UN troop presence ever could. That would not be welcome for some people in Washington and at Chevron headquarters, as they would not secure the oil.

Chad and Darfur are but part of the vast China effort to secure "oil at the source" across Africa. Oil is also the prime factor in US Africa policy today. George W Bush's interest in Africa includes a new US base in Sao Tome/Principe, 124 miles off the Gulf of Guinea, from which it can control Gulf of Guinea oil fields from Angola in the south to the Democratic Republic of Congo, Gabon, Equatorial Guinea, Cameroon and Nigeria. That just happens to be the very same areas where recent Chinese diplomatic and investment activity has focused. "West Africa's oil has become of national strategic interest to us," stated US Assistant Secretary of State for Africa Walter Kansteiner back in 2002. Darfur and Chad are but an extension of the US Iraq policy "with other means" - control of oil everywhere. China is challenging that control "everywhere", especially in Africa. It amounts to a new undeclared Cold War over oil.

About the Author: F William Engdahl is author of the book, A Century of War: Anglo-American Oil Politics, Pluto Press Ltd. His next book, Seeds of Destruction: The Dark Side of Genetic engineering (Global Research Publishing) will be released this June.