The US should be working harder to promote transparency and accountability in African oil-producing countries, according to a new report by the nonpartisan Center for Strategic & International Studies, Washington, DC.
As industry boosts investments in Africa, international scrutiny grows over how leaders of some of the world's most impoverished nations will spend expanding oil revenues.
According to CSIS, citing data from Washington-based PFC Energy, West African oil production is projected to increase substantially over the next decade, much of new production coming from offshore. Currently, the region produces 3.4 million b/d of oil. But by 2010 PFC said there is a 90% chance production will exceed 5.3 million b/d, a 50% chance it will surpass 6.3 million b/d, and a 10% chance it will top 7.4 million b/d.
Attention paid
No one expects West Africa to supplant the Middle East in oil production, however. PFC Energy notes the region's production will still represent less than 10% of the world's total daily oil production in 6 years.
Nevertheless, US policymakers were put on notice more attention must be paid to the region, for national and energy security reasons. Simply doling out foreign aid isn't the answer either, report authors David Goldwyn and Stephen Morrison suggested. African leaders should commit to transparency if they expect to see US or international funding.
High-level government officials from Nigeria, Angola, and Sao Tome attended a CSIS seminar on the report in Washington Mar. 30. They all largely endorsed CSIS's call for more focus in the region and urged the US to offer a stronger diplomatic presence. Among CSIS's recommendations is to install a special African energy "czar," who would serve as a special advisor to the US president and secretary of state for African energy diplomacy with an ambassadorial rank to lead interagency policy.
Pay then publish
Nongovernmental organizations, such as Open Society Institute (OSI), Global Witness, and Catholic Relief Services, want mandatory revenues disclosures from oil companies and host governments in and outside of Africa.
Aryeh Neier, OSI president, said individual oil companies should be compelled to disclose the terms of development deals. Neier also suggested that countries that follow "publish what you pay" guidelines should be rewarded with economic incentives.
Conversely, oil companies oppose anything but a voluntary system; they say that it is important to build consensus in a manner that allows for accountability without sacrificing competitiveness. Two oil companies, ChevronTexaco Corp. and Royal Dutch/Shell Group, served as CSIS taskforce members.
In remarks before CSIS, World Bank Group officials said everyone wants to eliminate corruption; but the means to that end remain in dispute among various stakeholders. WBG officials are themselves reexamining their role in financing oil projects for developing nations.
An independent advisory panel recommended WBG stop funding oil projects in favor of natural gas; it is industry's expectation the bank will reject that recommendation, but WBG officials stress a final decision is months away.
