October 8, 1999
Angola has been thrust back into the depths of civil war. The fighting has displaced more than 250,000 people within the country, and an unknown number have been killed or maimed since December 1998. Government forces, once backed by the Soviet Union and Cuba, are now funded by oil revenues.
Meanwhile the National Union for the Total Independence of Angola (UNITA), the rebel organization formerly supported by the US Central Intelligence Agency (CIA), is paying for its weapons with money derived from diamond exports.
In this first installment of a two-part series, Drillbits & Tailings will explore the role of resource extraction in fuelling the civil war. The next edition will focus on the diamond industry's connection to UNITA.
Angola currently produces US$10 million worth of oil each day - a figure that is expected to triple within the decade. Multinational oil companies are offering hundreds of millions of dollars to explore virgin areas of the seabed. Increased attacks by UNITA have caused the government to sell more drilling licenses in order to pay for the ongoing civil war.
"In spite of a civil war, companies are still falling over each other trying to get a piece of the action in Angola," said Kase Lawal, chairman and chief executive officer of Camac Holdings, a Houston-based energy company with offices in three African cities.
According to Patrick Smith, editor of the London-based newsletter "Africa Confidential," military hardware suppliers have equity stakes in all of the recent oil bloc purchases.
The Angolan government announced that the site holders for the three main offshore oil concessions, blocks 31, 32, and 33, are BP/Amoco, Exxon, and Elf/Aquitaine. But the other equity partners confirmed are Pro-Dev, Falcon and Naphta, three firms that have links to defense and security specialists and no apparent expertise in the upstream oil industry.
Chevron is a longest-standing operator in Angola, even though it has stayed closer to the geographically separated enclave of Cabinda and not the politically volatile hinterlands. The Chevron subsidiary, Cabinda Gulf Oil Company (CABGOC), has worked in Angola largely untroubled by war for more than 40 years.
CABGOC helped export the country's first cargo of crude in 1968 and produced continuously during the anti-colonial war and the civil war that followed Angola's independence from Portugal in 1975.
"The war has been going on for many years and it's a shame. But it's just not on our minds. We're just too darn busy," said Terry Hurst, a Louisiana oilman who works for Chevron and lives aboard a little piece of America perched in the placid Angolan waters a few minutes helicopter ride off the southwest African coast. His multinational team of neatly uniformed workers manages 240,000 barrels per day, which is around half the production from Angola's oldest and most prolific oil area.
Meanwhile, other companies are rushing in as new, big finds are made in the south of the main part of Angola. Boosters for this spate of investment seem equally oblivious to the suffering occurring in Angola.
"It is a truly staggering anomaly," said Paul Hare, head of the US-Angola Chamber of Commerce, without a trace of irony. " On the one hand you have a booming oil sector, and on the other a resumption of the war and a humanitarian disaster that is only going to grow worse."
