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Untapped: The Scramble for Africa's Oil

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I regret having to say this at the outset. I suspect most readers browsing a bookstore's shelves will look at the title of this book and simply pass it by. And this is unfortunate for two reasons. First, because, like it or not, the production of oil is of utmost concern to the world and especially the United States and Europe. Second, the book itself, "Untapped: The Scramble for Africa's Oil," by John Ghazvinian, is extremely well written, as well as vitally informative.

Anyone who keeps up on current events knows that the situation in the Middle East is growing increasingly unstable and violent. For a long time, this area has also been the most significant source of oil for the Western world. And the West, after all, literally runs on oil. We may not like our dependence on foreign oil, but we do have a very personal attachment to all the goodies that petroleum products bring into our lives. Short of a concerted conservation effort on the part of the public, or a relaxation on the part of committed environmentalists to their anti-drilling policies, or (heaven help us!) an extremely large tax on gasoline and other petro-products to discourage consumers, little will probably be or can be done to resolve the current crisis. So, for the most part, we will remain dependent on foreign oil for the foreseeable future.

Ghazvinian, in his book, takes our focus off of the Middle East and forces us to look at Africa as a source of oil. (Africa, in this context, is the area south of the Sahara Desert.) It has been known for a long time, according to Ghazvinian, that Africa is rich in oil. The problem has been the cost of tapping it and bringing it into production. In order to determine what is going on in Africa today regarding this quest for oil, Ghazvinian journeyed through twelve African countries interviewing all sorts of people from warlords to religious missionaries, from oil-workers to corporate executives, from petroleum scientists to just plain ordinary men and women. His journey is sometimes fraught with danger, often includes a touch of the humorous, is unusually enlightening, and thanks to Ghazvinian's eye for detail, always informative.

But why should we focus on Africa? And why now? Why the interest and why the hype that is now being displayed by some observers, including politicians as well as those in the oil industry itself? Ghazvinian provides this clue: "The answer has very little to do with geology. Africa's significance as an oil 'play' ... lies beyond the number of barrels that may or may not be buried under its cretaceous rock. Instead, what makes the African oil boom interesting to energy-security strategists in both Washington and Europe (and, increasingly, Beijing) is a series of serendipitous and unrelated factors that, together, tell a story of unfolding opportunity." The author then goes on to note numerous advantages, "attractive attributes," in favor of African oil, concluding that "African oil is cheaper, safer, and more accessible than its competitors, and there seems to be more of it every day."

So, Ghazvinian's adventure in Africa begins. And what an adventure it is! From Nigeria to Gabon, from the Republic of Congo to Angola, from Equatorial Guinea to the "maybe-paradise" of Săo Tomé and Principe (where the author couldn't wait to try the chocolate), the encounters that Ghazvinian relates, both "official" and personal, are what true adventure stories are made of. If a work of nonfiction can be described as a "page-turner," this one certainly qualifies. It was difficult to put it aside, once I started reading his book, for the more mundane tasks of cooking dinner, cleaning the house, or checking my e-mail. I don't say that about many works of nonfiction.

Ghazvinian, however, has a knack for writing excellent prose. Although an academic himself -- he has a doctorate in history from Oxford and is currently a visiting fellow at the University of Pennsylvania -- the text flows easily across the page and the writing is not the least bit "academic." I want to stress that this is not a book merely for the specialist in oil policy, or one of interest only to academics who study politics, history, geography, or allied disciplines, or that it is written for the scholarly class (whatever that is!). The ordinary reader will find "Untapped" immensely readable and its subject-matter extremely important, particularly since the future of the oil industry and its ability to deliver the "black gold" that is so vital to modern life, is going to have a great impact on the average person's pocketbook, as well as quality of life.

While most Westerners, I suspect, are not all that familiar with the geography of the continent of Africa, the book has a double-sided map of the African regions through which Ghazvinian traveled printed on the inside front and back covers of the book to aid the reader in following the journey. There is also "A Note on Sources and Suggested Further Reading" section for those readers who want to pursue the subject further. A helpful "Index" of topics is also provided. All in all, this is an important book and I highly recommend it to all those who want to keep up with what's going on in the world today and especially those concerned with the future of the American economy and of where the "oil crisis" may be heading.

This racy yet rather trite book joins a growing genre of volumes about the oil industry and its global influence. The overall tone is reminiscent of Michael Klare or Thomas Friedman's work, though with less literary or academic polish. The narrative reads like a series of capers by the author as he traveled across Africa's oil countries that convinced him that the oil industry is a menace and not a messiah. Even though the author has a doctorate in history from Oxford, this book has little analysis or guidance for Africa's oil economies and joins a sorry list of itinerant gloom-mongering polemics. If there is any doubt about the author's strong normative positions on the matter, consider the following quotations from the introduction (p. 6): "By the end of the five-day congress, only a red-assed baboon could have failed to appreciate the take-home message to the international oil industry: Africa: come get it!" Such rhetoric is likely to generate more heat than light on the matter.

Clearly Africa's oil economies have serious challenges but they deserve careful analysis and solutions. Ghazvanian book does not consider for example, that Equatorial Guinea was a basket case of poor governance and corruption even before oil was found. If anything, there is now greater scrutiny over what is going on in Malabo. The author's brief sojourn in Gabon does not consider the fact that the country has more preserved forests per unit area than any other central African country because the oil sector reduced the need for large-scale timber harvesting. The oil industry certainly needs to be held accountable for its past follies but we need to consider development for communities in its entirety and approach the matter with nuance and care. Narratives such as this throw the baby out with the bathwater. Clearly the author has the credentials to be a fine writer - unfortunately, he has not done justice to this vital topic and was more concerned with literary amusement and shock-value than in real reform.

The first thing that struck me about this book is that Ghazvinian has a gift for writing. In a market swamped with books that exemplify poor writing, that's saying a lot. But it's not the only reason to read this book.

Oil is one of those topics that is frequently abused with misdirection, misinformation, and misconceptions. So, I grudgingly agreed to read and review this book. After reading it, I though of a new twist on an old adage. Don't judge a book by its topic. I have to give this book high marks, all the way around.

One of the common misconceptions about oil is that most of it is in the Middle East and Central America. The truth is that Africa has vast amounts of oil that we are only beginning to discover. Ghazvinian provides some startling statistics on the offshore reserves alone.

Another common misconception is that any country with large oil reserves will also have great wealth. Actually, oil can--and often does--impoverish a country. Ghazvinian explains why, and provides detailed accounts of how this actually happened in case after case. The devastating effects of mismanagement following the discovery of oil, are unfortunately, the lead story of every country on the west coast of Africa.

The United States now imports most of its oil. Most people do not realize that if Americans made a few minor adjustments, the United States could be a net exporter of oil. Instead, Americans drive gas guzzlers and take unnecessary trips. This boosts the international demand for oil, and that demand is now escalating even faster as China and India ramp up their economies.

Even fewer people realize that the cost of extracting the oil to meet the demand goes far beyond the cost of equipment and oil company salaries. Everybody in an "oil rich" nation wants the "free ride" that purportedly comes with having oil in one's backyard. Tiny-minded "leaders" of oil-rich nations engage in what economists call "rent-seeking behavior," which leads to a distorted and counterproductive attitude toward managing every aspect of the nation's economy and resources. This results in a great deal of tension and illicit profiteering, plus the rise of a parasite class that makes its host quite ill. The abuses, pain, and suffering don't have to happen, but they do.

Ghazvinian doesn't propose any solutions, which is something I commend him on. He doesn't pretend to be an expert. Instead, he describes exactly what he sees going on and digs a bit deeper to give the reader the important background information so that understanding and proper perspective are possible.

No help from politicians
The extraction, transportation, and distribution of oil has become highly politicized. Unfortunately, this means politicians are heavily involved and that is never a good thing. For example, consider the USA. We have 435 Congressmen drawing nearly $200,000 a year each in salaries. They are completely out of touch with 90% of the people they "represent," partly because of the enormous income differential.

They constantly run for election, which means leaves zero time to do anything of value. They have no time to learn about the issues, much less "represent" the people who suffer from the bone-headed legislation they produce. They propose "solutions" based on polls of uninformed people or based on what financial supporters "suggest."

Their "energy policy" proposals range from the absurd to the merely pointless. If there is evidence that our politicians serve any purpose other than to hand out money to special interest groups, it's extremely well-hidden. An informed electorate, in theory, could begin to hold politicians accountable and actually have representation in the legislature.

Yet, expecting a sensible oil policy from Congress is both naive and hopeless. After all, this is the same bunch that have been tinkering with the federal tax code for nearly a century and still have an unconscionable mess. Americans are saddled with a 65,000 page code and one of the most hated and corrupt government agencies ever to exist.

Progress on the oil problem, especially with demand skyrocketing due to China and India, has to begin with ordinary Americans. Just as one example, consider that 80% of American cars have a fuel-wasting automatic transmission while in Europe only 20% of cars do. Americans can easily cut oil consumption by half.

Where we're headed
Perhaps if most Americans understood where oil comes from and the true costs involved, we might take it upon ourselves to be responsible about how we use it. Perhaps Ghazvinian's book will help bring about this change.

Ghazvinian doesn't make any predictions. But he provides such a clear picture of the situation in Africa that the reader can be fairly confident things are not going to improve any time soon. With demand on a steep upward trajectory, there's no doubt that more oil will be extracted from Africa. Most if it will be extracted offshore, which will help mitigate some of the negatives. But given that the institutional and cultural deficiencies responsible for the present state of misery show no signs of correction, we can't expect things to just work out as if by magic.

I think it's great any time someone introduces accurate information into a highly charged environment of disinformation and opportunism. That's exactly what Ghazvinian has done with this factual and well-written book. People who read this book will be better off for having done so.

If you are a believer in "peak oil" this book will support your belief. If you think oil is a type of cultural poison this work will support your view. The author spent considerable time in West Africa trying to learn about how the confluence of the developed world's need for hydrocarbon and the small West African countries need for money flows together. As you journey along with the author on his quest you will be exposed to the well documented corruption that happens because of oil money pouring into small countries. You can see very clearly how that corruption leads to wars, kidnappings and unsavory ways of life.
You will learn just how secretive "big oil" is and how their managers and professional workers live in West Africa which the author contrasts starkly against the lives of local Africans.
I learned a lot about what a "honey pot" West African oil is for all of the world's oil companies. Before reading this book I didn't know the difference between Guinea, Equatorial Guinea or New Guinea. Now I do.
The author's categorization of the three types of oil companies buzzing around the sweet oil pot are:National Oil Companies(Petrobras),major International Oil Companies(Exxon) and small Independent Oil Companies like Hyperdynamics (HDY) a small Huston based software company turned oil explorationist.
Hyperdynamics it turns out won the biggest off shore oil concession in all of West Africa. The concession became a formal contract in September of 2006. It is now exploring for oil in offshore Guinea.
If you want to see a glimpse of how important oil is to the world read this book. I had mixed feelings when I finished reading the book. Nevertheless I bought stock in Hyperdynamics (HDY) and intend to give to their Friends of Guinea fund. Excellent clear writing.

I recently went to Mr. Ghazvinian's book signing in DC and I have to say, he speaks as well as he writes. The best part about a good non-fiction book on a unique topic is that it a.) is interesting and b.) makes you want to read more about the subject.

Not only does Ghazvinian capture the reader's attention with a long well written "article" on this very timely subject but he does it in a way where you want to continue learning about the issue. I found myself so involved with this book that I wanted to go out and get books off the suggested reading list in the back (great idea - I wish all non-fiction had this!).

People will no doubt enjoy reading this book on a very important topic in the neo-colonialism of the African continent.

This book will answer and put into perspective a lot of the nagging questions you've ever had about Africa's colonial past, tribal struggles, economic booms and failures, and ideas on where she's headed in the not-too-distant future. Once read, you'll never see her (or the oil conglomerates) in news headlines the same again, for better or for worse.

_Untapped_ by John Ghazvinian is a riveting in-depth look at the rising importance of African oil. In recent years formerly poor countries, of little importance in the global economy, were suddenly awash in oil money (one, Equatorial Guinea used to be of so little importance to the U.S. that the American embassy had been closed; now it was about to reopen). The U.S. was soon expected to get as much as 25% of its imported oil from sub-Saharan Africa and China was becoming increasingly reliant on African crude. Ghazvinian traveled through twelve African countries to discover the reasons behind the boom and what this means for Africa and the world.

So why is African oil booming? Some experts believe that at best Africa only has 10% of the world's proven oil resources, so why the many billions of dollars spent on investment there? Much African oil (particularly offshore oil in the Gulf of Guinea, the 90-degree bend in the west coast of Africa) is of high quality, crude that is "light" (viscous) and "sweet" (low in sulfur), making it cheaper to refine than Middle Eastern crude. Not only is it cheaper to refine, it is less environmental costly to refine.

African crude is also easier and cheaper to transport. Most of Africa is surrounded by water, which cuts transport-related risks and costs; indeed offshore oil from the Gulf of Guinea is already well-positioned for quick and safe transport to major markets. Little need for any expensive, politically-difficult to negotiate, and vulnerable pipelines such as what are needed to bring Caspian crude to market. In the few cases were pipelines are needed they often only have to run through only one or maybe two countries.

Another reason for the attractiveness of Africa is that African nations generally present a more favorable contractual environment for oil companies to operate in. Unlike in Middle Eastern nations where state-owned oil companies often have a monopoly on oil exploration, production, and distribution, most sub-Saharan African nations operate on production-sharing agreements (or PSAs), an arrangement in which foreign oil companies are awarded licenses, assume all up-front costs for exploration and production, and share the revenues with the nation in question only after initial costs have been recouped.

Yet another reason is that with the exception of Nigeria (though others may soon join), sub-Saharan African nations were not members of OPEC (and thus not subject to their strict limits on oil output).

The "most attractive of all the attributes of Africa's oil boom" has been that most new oil discoveries have been made in deepwater reserves, many miles from populated land (or indeed land at all), meaning that they are pretty much isolated from the dangers of civil war, insurrection, sabotage, or banditry (an increasing problem for oil production from the Niger Delta in Nigeria, which the author covers in depth, revealing such innovative crimes as "illegal bunkering," "local bunkering," and "trucking").

A dominant theme of the book is just what this oil will mean for Africa. Many scholars and humanitarian activists view the oil boom not as blessing but rather a curse. Dubbed the "paradox of plenty" or the "resource curse," time and again throughout the world where oil has been discovered in a developing country that country has seen its standard of living decline and its people suffer in comparison to its non-oil endowed neighbors (their economies generally growing four times faster than oil-generating countries).

Though at first an "oil curse" seems counterintuitive, the author presented a well-argued case for its existence. Though the discovery of oil can bring about political and military conflict (such as exacerbating ethnic tensions in the Niger Delta), by and large the problem of oil is one of economic degradation. Ghazvinian cited an example from economics labeled the "Dutch disease," a term coined by the _Economist_ in 1977 to describe the collapse of the Dutch manufacturing sector after the discovery of Dutch natural gas in the 1960s. Basically, when a country starts to export a valuable natural commodity to the international market, it finds itself flooded in foreign currency. This glut artificially inflates the value of that nation's own currency, making imported products suddenly cheaper (which are also often perceived to be of better quality). Local producers (in Africa often this means local farmers) find that fewer people buy their products, so they abandon rural areas to flock to cities, creating a mass urban migration that devastates a country's traditional farms and small cottage industries. Of course, with this collapse, those in the city becoming increasingly reliant on imported foreign goods, something that is unfortunately out of reach to the new urban arrivals; a country that was once a net exporter of food often becomes a net importer of food. If and when the oil runs out, a nation's currency quickly depreciates, meaning its people are no longer able to buy now-expensive foreign imports and there is now no longer any local industry to speak of to fall back on.

An additional danger for oil producers is the development of a "rentier state." Rentier states are countries in which most if not all of the state's income comes from some form of economic rent (in this case a percentage of oil revenues). Such nations develop governments that in essence act like wealthy landlords, content to sit back and collect income from foreign corporations, divorcing the government and its management of the economy from the daily needs and activities of the people. Politicians no longer have any reasons to encourage industry and the government is no longer reliant on the economic productivity of its citizens but rather itself becomes instead a source of wealth. The state becomes an "allocation state," in which the government is seen as a big "sugar daddy," a source of free money. Where citizens pay taxes, they care about corruption and cronyism, while in a rentier state they view public funds as something open to all (often the elites, who make billions disappear).

Among the many examinations into the global oil business Africa has emerged as a new hot topic. While African petroleum resources have been known and extracted for many decades, they have gained in prominence in the last few years. This is particularly due to the uncertainties of dependable oil supplies from the Middle East. Also, China's recent discovery of Africa for investment purposes has fuelled new exploration ventures and increased the global competition for the black gold.

In this highly readable report journalist and historian John Ghazvinian pursues two paths of investigation: who are the major players in Africa's new prized commodity and what does the resulting economic boom mean for the populations in the countries concerned? In search of answers, or at least to gain better understanding of the realities on the ground, the author travelled in the major African oil producing countries. Much of his evidence is collected through field observation and interviews with a wide range of people - those who visibly have benefited from the oil boom in their country and those who definitively have not. The first group represents the tiny political elite of the country, the second being the vast majority whose life is either unaffected or, most likely, made worse. Ghazvinian's account is a mix of adventure travelogue and fact-filled examination of the geopolitics of oil, its wider socio-economic context with the ensuing fallout in the countries concerned. His narrative is lively and entertaining, his analysis sharp and his conclusions devastating.

With the global oil price sky rocketing in recent years while, at the same time, advanced technologies in deep sea drilling have made off-shore oil extraction more cost-beneficial, the scramble for the oil deposits off the West African coast - in the Gulf of Guinea - has reached high stakes proportions. Of great advantage for the investors is that they can auction exploration blocks from the government and its business partners without having to involve themselves in the internal political challenges of the host country nor deal with the economic and environmental fallout of their operations.

He starts the investigation in Nigeria, one of the largest global oil producers, whose political problems are regularly making the international news media. His portrait of the ongoing conflict in the oil producing Delta region between the local population, competing militant groups, local politicians and the central government, make chilling reading. Greed, corruption, extortion and political manipulation are all part of daily business. In addition, the multinational corporations have their own agenda. From Nigeria he travels to the other main oil producing countries, such as Angola, Equatorial Guinea and Gabon, ending his voyage in Chad and Sudan. Each country faces different, while comparable, challenges and problems.

Yet, after describing the details of the respective oil exploration, the dealings between oil corporations and government officials, he sums up the governments' complete failures in translating the huge oil revenues into necessary investments in the basic living conditions of the local people. He defines this as the "curse of oil". Reflecting on current and underlying causes, such as widespread corruption and greed of the respective ruling classes as well as lacking negotiation skills with multinationals, he places part of the responsibility at the door of the international aid system, in particular the World Bank and the IMF, and Western governments. He contends that their behaviour toward the oil producing African countries perpetuates conditions that recall the former colonial era. Western efforts to promote more responsible and effective uses of oil-based revenues, with, among others a focus on anti-poverty measures, require for countries to have or to build the necessary infrastructure and competencies. Chad is given as an example where such attempts failed.

Ghazvinian's book raises important issues of concern not only to Africans but to all of us who benefit from the African oil resources. He intends it as a "wake-up" call and he achieves his objective commendably. The lack of footnotes and references, while facilitating the reading, make verification of his facts and figures difficult. His in-depth focus on the oil business and the oil producing countries leave out, by necessity, many other aspects of African development. Unfortunately, he includes a number of generalized throw-away lines on the dismal affairs in Africa as a whole. A statement like the following is neither helpful nor accurate: "Stories about Gabon in the international press are virtually nonexistent and, sadly, in a continent of plagues and famines, wars and genocide, this splendid anonymity, this tacit acknowledgement that nothing much ever happens here, is probably as close as Africa gets to a real success story." A more subtle and cautious approach here would have increased the author's credibility. [Friederike Knabe]

The author of this book traveled thru Africa interviewing people affected by their local oil industries to provide insight into what is happening in this continent. Sojourning thru countries like Nigeria, Gabon, Equatorial Guinea and Angola, the author talks to private citizens, public officials, oil executives, PR agents, and the workers of the oil facilities themselves to create insightful analyses of how the oil industry is changing numerous countries in sub-Saharan Africa. The author also provides history by recalling the names of important Africans involved with the oil industry, such as Nigeria's Ken Saro Wiwa, and recounting their actions and words. And the author also investigates the histories of the various oil companies in Africa, such as Royal Dutch Shell, Total, and Chevron. Mixing a wealth of statistics with interviews, anecdotes, and textbook analyses of economics and history, this book provides a very readable introduction to oil politics in Africa. Overall, a great book.

This is an eminently readable book about the oil-rich nations of Africa. Ghazvinian weaves together a serious treatise on the problems of development with entertaining travel narratives. For example, we're given a taste of what it's like to live in Nigeria, recounted with a sense of humor, juxtaposed with a serious discussion of Nigerian economics. The author's style was a delight to read.

Ghazvinian's theme is that oil or other mineral resources actually destroy a country, as counterintuitive as that may seem. The currency escalates in value, which puts farmers and manufacturers out of business. We thus have the paradox of an oil-rich country like Gabon having to import tropical fruit. The government becomes less responsive to the people because its revenue comes from the oil companies, not the general public. The average citizen may actually find that their standard of living declines. Civil wars and corruption abound. At worst, the country disintegrates into chaos, with Nigeria as a prime example.

However, I couldn't help but make a mental list of exceptions to this pattern. The Arab emirates of the Gulf region are not democracies but at least their wealth has filtered down to benefit ordinary citizens. The economies of Botswana and Namibia are based on diamond deposits, yet contrary to Ghazvinian's thesis, these countries are multiparty democracies with reasonable standards of living. In spite of these exceptions, Ghazvinian makes a powerful case that the worst thing that can happen to a developing country is to find oil.

Nigeria, not surprisingly, gets the most attention in this book. Also covered are Angola, Cameroon, Chad, Congo (Brazzaville), Gabon, and Sudan. The tiny island nations of Sao Tome and Equatorial Guinea receive a lot of page space. Equatorial Guinea is a particularly sad tale of how oil transformed a tiny country into the ultimate example of a kleptocracy.