What is likely to make the majority of Americans more secure right now, the defense appropriation bill, or universal affordable healthcare? Which is most likely to insure domestic tranquility, provide for the common defense, promote the general welfare?  Defense that actually defends US citizens extends way beyond military action.  We face some far greater and more immediate threats than enemy weapons and enemy soldiers.

Obama signs the defense authorization bill, Oct. 28, 2009

Defense spending is treated is if it carries no cost. I am continually puzzled that there is almost no discussion in the news, no questions asked about the vast sums involved in what is called defense spending. Those who allege they are fiscal conservatives never blink at these massive sums, or the seas of red ink they create. Obama signed a $680 billion defense bill amidst heated debate about spending $90 billion on healthcare. You hardly heard a peep anywhere in the news about the vast sums in the defense bill.

Bush’s last defense spending bill, in effect through September 2009, came to $608.6 billion.

No ordinary person can get a sense of how much money that is. It helps to divide the $608.6 billion by the 365 days in a year and realize Bush’s new defense budget will cost the taxpayers $1.7 billion a day. This works out to $1.2 million a minute counting Saturdays and Sundays. Yet the main threat to the country as advertised by Bush are terrorists who have no standing army; no warships; no warplanes; no tanks; no satellites.

I am not against defense spending.  The money needs to be spent more wisely, and that requires public debate and participation in the process.    That debate requires news media willing to research and discuss the issues.  Unfortunately, there is little sign of that at present.

In fact those parts of the defense establishment actually fighting to defend the US interests, the soldiers, are under resourced and underfunded because the defense contractors set the spending priorities through their lobbyists and networks of government friends.  The needs of defense contractors are very different from the needs of soldiers.

The reasons Congress will swallow … defense requests without even chewing on them are the same old ones. No politician … wants to give his opponent or anyone else grounds to call him or her weak on defense. And the pols shrink from canceling even an obsolete weapon experiencing huge cost overruns because of the jobs attached to it back home. Defense contractors, rather than try to justify their weapons on the basis of the threat beyond our shores, focus instead on showing state by state all the jobs that would be lost if their widgets were cancelled.

I don’t see anything likely to change this pattern.  It is the military industrial complex President Eisenhower warned against, after spending his two terms as president locking it into place.  The State Department, that is supposed to be the face of US foreign policy has no constituency, certainly nothing as massive and powerful as the defense industry.  It does not have the funding, power, or influence of the Pentagon.

I sometimes think the real death blow to American democracy came when the US Supreme Court ruled that money is the same as free speech.

The US Supreme Court, in its 1976 decision in the case Buckley v. Valeo, essentially concluded that free expression can be counted in dollars. Money spent to influence elections, the court concluded, is a form of constitutionally protected free speech. [link]

Somalia is a counterterrorism planner`s dream.
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“We’ve moved from using UAVs primarily in intelligence, surveillance, and reconnaissance roles … to a true hunter-killer role with the Reaper.”
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… there is no longer any doubt that targeted killing has become official U.S. policy.

Predator MQ-9 Reaper

These predator drones are now being deployed over East Africa and the adjacent waters, based by the US in the Seychelles. At present we are told the drones are unarmed, and are part of anti-piracy surveillance. But that is only the toe in the door. The CIA uses these drones for extrajudicial killings in Pakistan, a country that is supposedly a US friend, and with whom the US is not at war. In Pakistan the CIA is probably assassinating some genuine international terrorists. It may also be assassinating innocent individuals, or local political leaders. The CIA appears accountable to no one in the US or the world at large for these actions. In all cases these are assassinations.

The CIA and the US Africa Command now appear ready to expand this predation in East Africa, most likely in order to continue efforts to destabilize Somalia (called stability operations). The US has been pushing the notion that Islamist fighters in Somalia are allied with al-Qaeda. There is no real evidence for this, see the commentary about halfway+ down this page, in response to a comment. But since it is repeated over and over in the US media, many people believe it. Just as the New York Times pushed the bogus story of weapons of mass destruction before the Iraq war, it is pushing the supposed link between al-Qaeda and al-Shabaab.

From the:

UNITED NATIONS: US drone strikes against suspected terrorists in Afghanistan and Pakistan could be breaking international laws against summary executions, the UN’s top investigator of such crimes said. “My concern is that drones/Predators are being operated in a framework which may well violate international humanitarian law and international human rights law,” he [UN Special Rapporteur on Extrajudicial Executions Philip Alston] said.
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“The onus is really on the United States government to reveal more about the ways in which it makes sure that arbitrary extrajudicial executions aren’t in fact being carried out through the use of these weapons,” he added.
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… you have the really problematic bottom line that the CIA is running a program that is killing significant numbers of people and there is absolutely no accountability in terms of the relevant international laws,” Alston said.

Since August 2008, around 70 strikes by unmanned aircraft have killed close to 600 people in northwestern Pakistan.

“I would like to know the legal basis upon which the United States is operating, in other words… who is running the program, what accountability mechanisms are in place in relation to that,” Alston said.

“Secondly, what precautions the United States is taking to ensure that these weapons are used strictly for purposes consistent with international humanitarian law.

“Third, what sort of review mechanism is there to evaluate when these weapons have been used? Those are the issues I’d like to see addressed,” the UN official said.

b real provides more research in his africa comments, where you can read in more detail the information from the following sources:

AP: US drones protecting ships from Somali pirates

Military officials said Friday the drones would not immediately be fitted with weaponry, but they did not rule out doing so in the future.

Analysts said they expected the Reapers would also be used to hunt al-Qaida and other Islamist militants in Somalia. While Moeller said the aircraft would “primarily” be used against pirates, he acknowledged they could also be used for other missions.
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“The long-term solution to the piracy issue is basically [us] getting the conditions right in Somalia,” he said.

More information about the Reaper here: MQ-9 Reaper Hunter/Killer UAV

… the [Reaper] aircraft can carry up to 14 Hellfire missiles, compared with two carried on the Predator. The Reaper can stay airborne for up to 14 hours fully loaded.

Trading off some of the missiles, Predator B can carry laser guided bombs, such as the GBU-12. MQ-9 is equipped with both Lynx II SAR and the MTS-B 20″ gimbal, an improved, extended range version of the MQ-9’s EO payload. The availability of high performance sensors and large capacity of precision guided weapons enable the new Predator to operate as an efficient “Hunter-Killer” platform, seeking and engaging targets at high probability of success.

The Wikipedia entry adds:

Then U.S. Air Force Chief of Staff General T. Michael Moseley said, “We’ve moved from using UAVs primarily in intelligence, surveillance, and reconnaissance roles before Operation Iraqi Freedom, to a true hunter-killer role with the Reaper.”

The New York Times adds its voice to the war machine fear mongering: In Somalia, a New Template for Fighting Terrorism. The NYT starts with the popular but unsubstantiated assertion that: “Al-Qaeda is working feverishly to turn Somalia into a global jihad factory”.

So a new template for fighting terrorism may be emerging as the United States shows less desire to get involved in the local intricacies of nation building and more interest in narrowing its focus to Al Qaeda. …
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To Mr. Nagl, in fact, Somalia is a counterterrorism planner`s dream, with its desert terrain, low population density and skinny shape along the sea; no place is more than a few minutes` chopper flight from American ships bobbing offshore. “It`s far, far harder to do counterterrorism in Afghanistan and Pakistan than in Somalia,” he said.

And from an abstract of Jane Mayer’s article in the October 26th issue of The New Yorker: The Risks of the CIA’s Predator Drones: The Predator War:

Hina Shamsi, a human-rights lawyer at the New York University School of Law … said of the Predator program, “These are targeted international killings by the state.”

The Predator program, as it happens, also uses private contractors for a variety of tasks, including “flying” the drones.
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According to a new study by the New America Foundation, the number of drone strikes has gone up dramatically since Obama became President. General Atomics Aeronautical Systems, the defense contractor that manufactures the Predator and its more heavily armed sibling, the Reaper, can barely keep up with the government’s demand.
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… there is no longer any doubt that targeted killing has become official U.S. policy.

Somalia will make a convenient African practice field for targeted killings by robot assassins. There is no government to stand up for the Somali people in this, especially as the United States claims to be the one standing up for Somalia. As Mr. Nagi said above, Somalia is a counterterrorism planners dream. As long as Somalia is kept destabilized, aka stability operations, it will be an easy target.

Somalia is just the beginning, it may have oil, but it looks like there is a lot more oil in the African great lakes region, beginning with the recent finds in Uganda. Southern Sudan has oil and is the site of US corporate and international land grabs. The DRC has vast quantities of minerals including 80% of the world’s coltan. Its mineral resources are considered a US strategic interest. That is why the US helped overthrow Lumumba and installed Mobutu, dismissing Mobutu’s 30 years of failed government as an African problem. For US purposes, Mobutu was a success, he was a faithful client. When he was no longer useful, the US helped overthrow him.

The term terrorist is evolving to mean anyone who questions or stands up to the US in its quest to coopt and control oil, minerals, and other natural resources, or who stands up to the forces of global capitalism. A “terrorist” is a political or economic opponent, only a few of them have violent intentions towards the US.

A robot assassin looks like just the tool to eliminate an obstructive political opponent. It appears risk free and cost free to the US. Few outside the neighborhood will care about the collateral damage, the many innocent civilians killed at the same time. The term terrorist is necessary to give political assassination a figleaf of legality.

From africa comments:

… US targeted killings of Al Qaeda terrorists is a legal act of self defense under international law. (You can get a free pdf download, here, at SSRN, “Targeted Killing in US Counterterrorism and Law.“
…
… US law and regulation contains a ban on “assassination.” Assassination in that specific legal sense is prohibited – but also not defined in US law or regulation. However, successive administrations dating from the 1980s have taken the position – e.g., the speech in 1989 to which the article refers – that a targeted killing is not (prohibited) “assassination” if it meets the requirements for self-defense under international law, including self defense against terrorists.

The Reaper may be a perfect tool for global capitalism to assassinate and decapitate any growing movements and civil society groups with economic or democratic aspirations. Jeremy Keenan reminds us that an estimated 55% of the world population are left out of global capitalism, neither producers or consumers. Many of these live in Africa. If these people continue to be marginalized, the profits and benefits will continue and increase for the elites controlling their resources now. So the elites have strong incentives to prevent and crush democratic movements.

Jeremy Keenan describes this use of the war on terror and the reason for the Africa Command in: Demystifying Africa’s Security:

[The] Bush administration decided to use a military structure to secure access to and control over African oil and opted to use the GWOT as the justification, rather than acknowledging that US military intervention in Africa was about resource control.
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… emphasizing the threat posed by the marginalised and excluded, Africa’s ‘dangerous classes’, and the role of aid and ‘development’ … merging the development and security agendas so that the two have become almost indistinguishable
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The securitisation of Africa has been further promoted by drawing attention to the association between underdevelopment and conflict and the various discourses on ‘failed states’, which, in no time at all, were linked directly to the 9/11 attacks. It took only a few steps – from ‘poverty’ and ‘underdevelopment’ to ‘conflict’, ‘fear’, ‘failed states’ and the black holes of the ‘ungoverned areas’ – to recast Africa as the ‘Heart of Darkness’ and to transpose the GWOT into its vast ungoverned spaces: the DRC, Sudan, Somalia and EUCOM’s infamous ‘swamp of terror’, the Sahara.
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Far from bringing ‘peace and security’ to Africa, AFRICOM is directly instrumental in creating conflict and insecurity.
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Social scientists unfamiliar with the new ‘security development’ discourse may find its emphasis on ‘security’ and ‘development’ seductive. What more does Africa need? However, as Abrahamsen (2005) has already pointed out, London and Washington have used this discourse to link Africa’s underdevelopment with the threat of terrorism. And the regimes of Africa have followed suit: many are now using the pretext of the GWOT to repress legitimate opposition by linking it with ‘terrorism’. … Above all, the ‘security-development’ discourse explicitly links Africa’s poor, her ‘dangerous classes’ as Abrahamsen calls them, the marginalised and excluded to international security ‘problems’ and ‘terrorism’.

And so the war on terror becomes the war on the poor and marginalized, the “dangerous” classes. Keenan gives us a number of examples of countries in Africa where this is already happening. If the US is using the Reaper to kill, and is not engaged in open war with a country, it is using the Reaper as a tool of political assassination, killing opposing leaders and their families to control the economy and the politics.

Rageh Omaar presents a look at AFRICOM that touches most of the major issues of its origin and its continuing operation. There are two films, each divided into four parts: America’s New Frontline: A Self-Fulfilling Prophecy, and Diplomats or Warriors.

America's New Frontline, a film about AFRICOM (click once or twice to enlarge)

Considering the scope and complexity of the topic, these films do an excellent job of introducing the issues surrounding the creation of AFRICOM, and its ongoing actions and existence. Omaar considers how AFRICOM may continue to affect African countries where it operates.

AFRICOM was created by the Bush administration. It grew from the conflict between the Pentagon and State Department for control of foreign policy, which the Pentagon won. Its emphasis on military training and military solutions, called stability operations, has vast implications for the continent of Africa, the people who live there, and for the American people and their relationship with the world.

Here are the links, I highly recommend viewing both films.

America’s New Frontline: A Self-Fulfilling Prophecy, with links to all four parts.
Part 1 – 12:03
Part 2 – 10:20
Part 3 – 12:23
Part 4 – 11:03

I particularly recommend Diplomats or Warriors? 
Scroll down the page to see:
America’s New Frontline – Diplomats or Warriors?, with links to all four parts.
Part 1 – 9:35
Part 2 – 13:17
Part 3 – 12:11
Part 4 – 10:48

The films were produced and directed by Callum Macrae of Outsider Films, who was kind enough to contact me during the planning of these films.

I do not share Mr. Omaar’s optimism about Obama and recent events in Somalia. The US continues to prop up, and is escalating military attempts to maintain the TFG government, which was chosen in Djibouti by delegates approved and transported there by the US. Ambassador Ranneberger, who ran Somali policy for Bush, and continues running it for Obama, made remarks in an interview in September that sound exactly like a mob boss offering “protection”:

The US Ambassador to Kenya and also in charge of Somalia affairs, Michael Ranneberger, said Wednesday the only solution of the Somali problem is to support the Transitional Federal Government led by president Sheik Sharif Sheik Ahmed.

“It is important for the Somali people to know also, that the best way to end their suffering is by providing support for this transitional federal government because ultimately they will continue to suffer unless there is stability in Somalia, and the only way to bring about stability is through this Transitional Federal Government” Michael Ranneberger told Shabelle Media Network in an exclusive interview. *

This is a little taste and demonstration of the true meaning of stability operations. It isn’t pretty.  The films provide more pointers to other places on the continent destined for stability operations.

________

* h/t b real, whose Africa Comments are an excellent place to follow the unfolding story in Somalia.

KITGUM, Uganda - Soldiers from Kenya, Burundi, Rwanda, Tanzania, Uganda and the United States participate in an opening ceremony at the start of Natural Fire 10, October 16, 2009. Natural Fire 10 is a multi-national, globally-resourced exercise focused on humanitarian assistance, disaster relief, and regional security. (Photo courtesy of U.S. Army Africa)

AROMO, Uganda - Seaman Apprentice John Sanders, Naval Mobile Construction Battalion 3, and Uganda Peoples' Defence Force Corporal Ongora Bonny begin constructing the foundation of a bridge in Aromo, Uganda, October 10, 2009. The bridge, scheduled to be completed in January 2010, will benefit local residents by improving their transportation ability. (Photo by Staff Sergeant Ronald Lafosse, CJTF-HOA)

Natural Fire 10, a multinational military exercise involving five East African partner states — plus partners from the U.S. military — began October 16, 2009 in northern Uganda.

Soldiers from Kenya, Burundi, Rwanda, Tanzania, Uganda and the United States opened the exercise with a ceremony attended by senior military officials from each country.
The 10-day exercise focuses on humanitarian and civic assistance, disaster relief and regional security.
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Roughly 550 U.S. personnel and 133 military personnel from each of the five partner nations are taking part. Altogether, there will be nearly 1,220 participants. Three training opportunities are going on simultaneously. Medical, dental and engineering projects will assist the local community and security partnership exercises near Kitgum which will increase the soldiers’ ability to work together.

Meanwhile, in Kampala and Entebbe, military leaders and senior civilian officials from participating countries will take part in a tabletop exercise — facing simulated emergencies in Africa. This type of exercise will sharpen senior and mid-level military leaders’ skills in their response to disasters, to offer humanitarian assistance and to prepare for pandemic situations.

Medical care will include direct care by a doctor or dentist, to include optometry and pharmacy services as well as dental extractions. Education classes on HIV/AIDS, nutrition and hygiene will also be provided. The care will be provided at Pajimo Health Center, Palabek Health Center, Mucwini Health Center and Kitgum Government Hospital.

Engineers will work together to make improvements at a high school, primary school and a hospital. Improvements include repairing or replacing roofs, window panes and doors, repairing walls, installing handicap ramps and placing a concrete floor. Engineer projects will be conducted at the Kitgum High School, Mucwini Primary School and Kitgum Government Hospital.

Natural Fire 10 closes with a ceremony October 25, 2009, when all participants will return to their countries.
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Natural Fire was first held in Kenya in 1998, with U.S. partnership. Since, then it has been held every two years in East Africa. In 2000, it grew to include Tanzania and Uganda, as well as the U.S. and Kenya — a significant step for the EAC alliance. In 2006, Natural Fire expanded to include field training and humanitarian assistance. Since then, the exercise has grown to feature five partner states, with the addition of soldiers from Burundi.

This gives you the basic description of the exercise. You can see the location of Kitgum on this map. You will notice that Kitgum is right on the border of southern Sudan, where there is oil, and where US coporations are buying up large tracts of land. There are recent significant discoveries of oil in Uganda, with more expected both in Uganda and in the DRC.

Ugandan districts affected by Lords Resistance Army, map created by Mark Dingemanse for Wikimedia.

There are many questions about what other agendas are at work with this exercise, besides the ones that have been publicly announced.

Paul Amoru describes the location of the exercise:

Northern Uganda, the former epicentre of the Lord’s Resistance Army (LRA) conflict, has become home for US Marines and army officers, at least for the next three weeks.

Over 600 military personnel from Kenya, Tanzania, Burundi and Rwanda are also expected to arrive in Kitgum District, where Uganda, along with these partners will hold a 10-day exercise, focused on humanitarian assistance and disaster relief.

For a region that has just returned to normalcy, three years ago, the high levelled military cooperation has triggered raw excitement among the formerly displaced community. The US-led exercise is dubbed Natural Fire 10.

Advanced US military personnel, who are settling in the war battered region, have already mounted several installations in Kitgum, including a water purification plant at Akwang Sub-county. The plant will produce up to 20,000 litres every day.

UPDF 4th Division spokesperson Ronald Kakurungu yesterday remained upbeat about the event. “This is an opportunity for us to associate more with civilians. We expect to cement our strategic relationship with the community,” Capt. Kakurungu said.

As an article in the East African points out:

…the decision to site the exercise in northern Uganda raises questions about whether it may presage a renewed US-supported assault against the Lord’s Resistance Army.

Natural Fire 10 will involve live fire in the field as well as convoy operations, crowd control and vehicle checkpoints, the US Army reports.

And while Maj Gen William B. Garrett III insisted recently that the exercise is focused on training for humanitarian relief, the US Army commander added that the forces he will lead in Natural Fire 10 will be ready to respond to any security threat that may arise in the Kitgum region.

The Obama administration is being urged by dozens of Democratic and Republican members of Congress to help finish the fight against the LRA.

Several non-governmental organisations based in the US also advocate US military action to put an end to the maraudings of the LRA.

The US provided operational support to a joint Ugandan-DR Congo-Southern Sudan offensive last December that was aimed at capturing or killing LRA leader Joseph Kony and dealing a decisive blow to an insurgency that has terrorised Ugandan civilians for the past 20 years.

But the operation dubbed Lightning Thunder failed in its objectives.
[you will find more details on Operation Lightning Thunder here and here]

Kony escaped, and his forces embarked on a killing spree that took the lives of an estimated 1,000 Congolese villagers.

Natural Fire 10 may well have the primary purposes claimed for it, but the skills being taught to the East African soldiers “are readily transferable to any sort of operations that their commanders want to undertake,” notes Daniel Volman, head of the Washington-based, non-governmental African Security Research Project.

Kony and the LRA have spread out from northern Uganda into both Sudan and the DRC. They are in the way of the exploitation of the oil and other natural resources. So suddenly, in addition to the humanitarian horror they have always been, they are now inconvenient to the interests of global money. So now there is talk of further military action against them. The Acholi Leaders Peace Initiative writes to us courtesy of Africa Focus, about the possibility of a military option:

The military option has been explored numerous times in the past, notably Operation North (1991), Operation Iron Fist (2002) and Operation Lightning Thunder (2008-2009).

Experience shows that despite such attempts to end the conflict, only dialogue can be attributed to the relative calm experienced in Northern Uganda since July of 2006 Military strategies launched against the LRA have time and again led to severe reprisal attacks on the innocent civilian community as illustrated by the recent 900 civilian deaths during Operation Lightning Thunder.

Not only has the cost of the military option been expensive regarding the loss of human life, the financial implications of war are also immense. The large sums of money required to carry out war drain the resources needed to bring about development and reconstruction of affected areas.
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It must be acknowledged that there are numerous groups which are causing insecurity throughout the region. While the LRA is one said group, any strategy that is put in place must also address the other negative forces working in the Democratic Republic of Congo, Sudan, and Uganda who pose a threat to stability.

As the conflict has transformed into a regional issue, diplomatic engagement with regional stakeholders, namely those from Democratic Republic of Congo, Southern Sudan, Central African Republic, and Uganda is integral so that the needs and concerns of all affected are adequately addressed.

Furthermore, we feel that not all non-violent strategies have been explored adequately. While some have put forward that dialogue has failed, we argue that there were certain factors such as the stick and carrot approach, vested interests, presumptions, and the lack of coordination and communication between the LRA, GoU, and mediating parties did not provide a fruitful environment for dialogue to take place.

Time and again, issues of spoilers both regionally and internationally have played a role in frustrating any attempts at peace. For any regional strategy to be successful, we feel that such spoilers need to be investigated, made known if found guilty, and held accountable for their actions in the interest of sustainable peace.

It has been observed that past development programs in Northern Uganda have failed to make an impact on the ground due to various factors such as corruption. … [a] plan needs to be put into place to ensure that support is maintained to the affected civilian population to prevent them from once again being victims due to the actions of others.

Among the regional spoilers have been the governments of Uganda and Rwanda, both of whom have been in competition with each other and with the DRC to take advantage of the mineral resources of the DRC. Both those governments are taking part in this exercise. And both of those governments have acted as proxy warriors, looking after the interests of US and other western interests in minerals in the DRC, in addition to their own interests. This has led to unending war and humanitarian disaster in the Eastern Congo.

Democratic institutions need encouragement and support in East Africa, as in many other places. Military exercises, no matter how humanitarian their decriptors, do not provide support for democratic institutions. Military exercises feature soldiers as government. Those who eye Natural Fire 10 and other recent US military exercises on the African continent with skepticism and apprehension have much to justify their fear.

China’s development projects in Africa reach from Morocco to South Africa. From soccer stadiums to TV stations and oil rigs …

Students take cultural courses at the University of Nairobi's Confucius Institute (photo: gezidiy.blog.sohu.com)

Africa China bilateral trade, "distinct patterns of trade and exchange between Beijing and African nations have fostered a relationship focused on the future"

In March 2009 Billy Noiman wrote The Africa Plan. The article contains some excellent graphs and charts, one of which is pictured above. It also contains an interactive map of China’s activities in relation to areas in which there has been conflict. The map is well worth a look. The entire article provides a concise overview of China’s presence in Africa.

From television broadcasts to cultural projects, China’s presence in Africa has been rapidly increasing.

“They are putting in Confucius institutes, where the Chinese are paying for the study of Mandarin, the study of Chinese culture and history,” Powell said. “Just as the French have their programs, the British have the British Council, the U.S. has American libraries, the Chinese are putting in their culture and educational outreach in a very significant way.”
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While China is often portrayed as an oil-thirsty giant caring more about pipelines than people, the country’s involvement in Africa is not so cut and dry.
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“Contrary to what many assume, China’s large oil companies are not dominant players in Africa’s energy industry. With the important exception of Sudan, where the China National Petroleum Company (CNPC) is the major operator, Chinese oil companies are relatively minor players in Africa,”
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Nevertheless, trade is growing exponentially. Total trade between China and Africa reached US$107 billion in 2008, a 45% jump since the previous year. There are now over 800 different Chinese enterprises doing business in Africa. The Southern African reported in January 2009 that Angola recently became China’s largest African trader, with total volume exceeding US$25 billion. With China’s continued drive for natural resources and Africa’s need for infrastructure development, the relationship appears to be a match made in economic heaven.

Carine Kiala, a Senior Analyst for the Centre for Chinese Studies at Stellenbosh University in South Africa, said that in general, “Certain African governments are receiving credit lines and services in exchange for their natural commodities. How this benefits the general population is subject to interpretation.”
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The Chinese have become creative in working with African states whose heavy indebtedness makes it difficult for them to get construction loans. China Exim Bank permits such nations to use natural resources to pay for infrastructural development.

Kiala said that the infrastructure projects undertaken jointly by China and the local governments are having a highly visible impact on African societies.

“Most certainly, the infrastructure being put in place will solidify internal and regional linkages, thus facilitating trade and empowering the masses,” Kiala said. “Although job-creation is a direct benefit, African countries need sustainable employment and skills development.” A lack of capacity building – the development of the domestic population’s capabilities as a work force – has been one charge against China’s “resources for infrastructure” trade strategy.

This last is one of the angry criticisms I hear most often against the Chinese presence in a variety of countries.

Besides cultural exchanges and industrial development, China has also played an active role in providing aid for poverty-stricken African countries. In late 2006, President Hu Jintao pledged to provide African countries with US$5 billion in aid including soft loans and credits over the next few years. With this pledge China hoped to bolster trade between the two regions. Others, however, see more harm than good in China’s aid packages. In early 2007, the British government warned Beijing that their assistance agreements and inexpensive loans threaten to drive countries back into debt after just recently beginning to realize the benefits of other debt relief programs.

In discussions with African governments, Chinese officials emphasize the country’s long-term commitment to the relationship. Given the region’s colonial past, several African nations see this as a refreshing change. Furthermore, China’s “hands-off” approach in political affairs is a business advantage. Unlike its Western competitors, the Chinese government has chosen to keep political matters completely separate from business engagements.
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“Some people worry about it in terms of the Chinese only wanting oil and raw materials, which is true. But they see this as a very long-term commitment.”

Map showing the number of active hate groups by state in 2008 from the Southern Poverty Law Center. See the interactive version of this map that lists the groups by state at http://www.splcenter.org/intel/map/hate.jsp

In Tangipahoa Parish Louisiana, slightly north of New Orleans, a white Justice of the Peace refused to marry an interracial couple:

NEW ORLEANS – Two civil and constitutional rights organizations called on a Louisiana justice of the peace to resign Friday after he refused to marry an interracial couple, saying any children the couple might have would suffer.

The leaders of the American Civil Liberties Union in Louisiana and the Center for Constitutional Rights and Justice in New York said Keith Bardwell, a white justice of the peace in Tangipahoa Parish in the southeastern part of the state, should quit immediately. Earlier this month, Bardwell refused to issue a marriage license to Beth Humphrey, who is white, and Terence McKay, who is black.

“Perhaps he’s worried the kids will grow up and be president,” said Bill Quigley, director of the Center for Constitutional Rights and Justice, referring to President Barack Obama, the son of a black father from Kenya and a white mother from Kansas.

Obama’s deputy press secretary Bill Burton echoed those sentiments.

“I’ve found that actually the children of biracial couples can do pretty good,” Burton told reporters aboard Air Force One as it flew to Texas.

Marjorie Esman of the ACLU said the group was calling on Bardwell to resign “before he infringes on the constitutional rights of another person.”
…
Humphrey and McKay were eventually married by another justice of the peace, but are now looking into legal action against Bardwell.
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“A justice of the peace is legally obligated to serve the public, all of the public,” Quigley said. “Racial discrimination has been a violation of Louisiana and U.S. law for decades. No public official has the right to pick and choose which laws they are going to follow.”
…
Tangipahoa Parish President Gordon Burgess said Bardwell’s views were not consistent with his or those of the local government. But as an elected official, Bardwell was not under the supervision of the parish government.

“However, I am certainly very disappointed that anyone representing the people of Tangipahoa Parish, particularly an elected official, would take such a divisive stand,” Burgess said in an e-mail. “I would hope that Mr. Bardwell would consider offering his resignation if he is unable to serve all of the people of his district and our parish.”

Bardwell, a Republican, has served as justice of peace for 34 years.

Racism is still a festering wound in the United States. And every so often it bursts open, pouring out its poison. As offensive as this is, in this incident no one was hurt or threatened with physical harm. Although Mr. Bardwell has shown a lengthy pattern of painful and discriminating behavior that did not offend his voters, this couple is both able and willing to seek legal redress. That has not always been true within my lifetime.

Recently there has been an upsurge in public racist rhetoric and hate speech, even making its way into what is loosely termed “news” on television. We saw it in the people who came armed to town meetings, especially during August, bearing overtly racist signs and symbols, and the way their behavior was covered by the news. The leadership of the Republican party has allied itself with those delivering this hate speech, which has escalated and increased the real threat of violence, by making it more socially acceptable. Especially since the passage of the 1964 Civil Rights Act, the Republican Party has made itself the party of white supremacy, particularly in the south. Much of Republican opposition to social programs that help all the citizens of the US, comes from resistance to the possibility that any tax money might be spent to help people of color.

We are still hearing this from members of Congress, before Obama’s speech to Congress on Health Care in September: Sen. Saxby Chambliss (R-GA) said … “I think he’s gonna have to express some humility … “ or: During President Obama’s major health care speech on Wednesday, South Carolina Rep. Joe Wilson (R) yelled out “You lie!”, something that has never before happened in a presidential speech to Congress.

The Southern Poverty Law Center, SPLC, traces the history and follows the activities of hate groups, as does the blog Orcinus. Both feature thoughtful articles and in depth research.

From a recent SPLC Report: Return of the Militias:

A key difference this time is that the federal government — the entity that almost the entire radical right views as its primary enemy — is headed by a black man. That, coupled with high levels of non-white immigration and a decline in the percentage of whites overall in America, has helped to racialize the Patriot movement, which in the past was not primarily motivated by race hate. One result has been a remarkable rash of domestic terror incidents since the presidential campaign, most of them related to anger over the election of Barack Obama. At the same time, ostensibly mainstream politicians and media pundits have helped to spread Patriot and related propaganda, from conspiracy theories about a secret network of U.S. concentration camps to wholly unsubstantiated claims about the president’s country of birth.
…
Almost 10 years after it seemed to disappear from American life, there are unmistakable signs of a revival of what in the 1990s was commonly called the militia movement. …

One big difference from the militia movement of the 1990s is that the face of the federal government — the enemy that almost all parts of the extreme right see as the primary threat to freedom — is now black. And the fact that the president is an African American has injected a strong racial element into even those parts of the radical right, like the militias, that in the past were not primarily motivated by race hate. Contributing to the racial animus have been fears on the far right about the consequences of Latino immigration.
…
… “All it’s lacking is a spark. I think it’s only a matter of time before you see threats and violence.”

In reference to Congressman Wilson’s outburst, and some of the other racist incidents and behavior around the country, I think President Carter is absolutely correct when he says:

“I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man, that he’s African-American,” Carter told “NBC Nightly News.”

“I live in the South, and I’ve seen the South come a long way, and I’ve seen the rest of the country that shares the South’s attitude toward minority groups at that time, particularly African-Americans.”

President Carter grew up in racially segregated Georgia. I heard him say once in a television interview that he is good at monitoring elections around the world, because everything he has seen around the world he had already seen at home. He also knows first hand from long experience working through the civil rights struggles how to get people with uncompromisingly opposed views to talk to each other and to keep talking and to keep talking more, until some common ground and some progress can happen. We can learn a lot from his experience and wisdom. It is worth listening to what he has to say.

Exercise Africa Endeavor 2009 ran from September 29 until October 8 this year. This is a U.S. Africa Command-sponsored initiative designed to assist African militaries with improving their communication capabilities, and is planned to become an annual exercise.

BARAKA, Gabon - Participants of a communications exercise called Africa Endeavor conduct collaborative radio and data testing at the Gabonese Army Camp in Baraka, Gabon, October 5, 2009. Africa Endeavor is an annual, U.S. Africa Command-sponsored initiative designed to assist African militaries with improving their communication capabilities. Almost 200 people from 26 countries and three international organizations participated in this year's exercise. (U.S. Air Force photo by Staff Sergeant Samara Scott)

Of course when the US is coordinating communications between the military organizations of 25 African countries, the US has very convenient access into their communication systems. This will be very useful for the United States in developing, coordinating, and deploying proxy armies in the quest for oil and natural resources. It will also be very useful if any of these militaries is allied against the United States at a later date. The United States will find it much easier to tap into their communication systems.

In advantaging African militaries far beyond any other sector of society with money and attention in these 25 countries and more, the US is preparing a large new cadre of potential leaders for military coup governments across the continent. This will be convenient for the US military who will already be familiar with these individuals and their organizations, and well used to working with them.

As Victoria Lakshmi Hamah writes:

The basic goal of US military programmes is to provide for the security of the local political elite and economic hit men and to insulate them from the social consequences of their economic decisions. Its orientation of African military officers will also ensure that there will be no possible rise of nationalist governments that will aim at the nationalization of oil and mineral production. A political elite isolated and insulated from the prevailing social conditions will have no incentive to protect even the existing semblance of democratic culture.

DefenceWeb publishes more information about Africa Endeavor in Exercise Africa Endeavour strengthens military capabilities and communication.

Almost 200 people from 26 countries and three international organizations came together in Gabon, September 29, 2009, to participate in Exercise Africa Endeavor, an annual US Africa Command-sponsored initiative to assist African militaries with improving their communications capabilities.
The exercise focuses on two important areas of military communications: data, which includes the hardware and software of computer networks, and radio, used to send voice and data transmissions. On October 1, Zambian service members joined with Marines from US Marine Forces Africa to practice their skills with a communication check.
…
Marine Sergeant Zach D. Zapotoski, exercise data chief/lead planner, said the purpose of the exercise was to bring communicators from throughout the various economic regions of Africa to evaluate and standardize communication plans.

“We are testing to ensure that all of the different kinds of gear that each participant uses is compatible,” Zapotoski said “Through this process we are collecting data, identifying gaps and shortfalls, and then working to address the areas where those gaps occur.”

According to Marine Captain Dave Fuller, exercise technical director, the effort to standardize is one of the main goals of the exercise. “The first goal is to increase the interoperability with the countries that are going to be working with each other in the different African Standby Forces,” Fuller said.

Because each nation brings different capabilities, experience levels and operating methods, establishing standard operating procedures (SOPs) is key to future success, said Marine Sergeant Ryan Kish, exercise test network coordinator.

“The most important thing is that we are establishing SOPs,” Kish said. “It’s important because as the African nations work together in the future or when we work with them in the future, we can have that data to look at to see what worked and what needs a solution.”

In addition to the technical and professional aspects of the exercise, Fuller said .

“Our second goal is to pair up these nations to not only build up partner relations between us, but also to create and bolster partnerships between the African countries as well,” Fuller said.

Establishing Interoperability

The exercise is broken down into phases in order to establish the SOPs and collect all of the necessary data.

Both the radio and data portions have three phases of execution throughout the exercise.

According to Valencia, in the first phase of the radio portion of the exercise, each nation uses internal testing to ensure that everyone’s equipment is compatible and functioning properly.

“Each nation generally has the same types of gear, but brands and capabilities vary,” Valencia said. “So, in this first phase we are ironing out compatibility issues to get the ball rolling for the next phase.”

During the first phase, Valencia said all of the internal testing happens between radios on the site here.

From the testing phase, the radio communicators move to phase two where they reach back to their home nation to establish communications.

During phase three, participants communicate from the host site to sites within other countries.

“We are taking the results of the various tests and compile them into a single package that can be used for future reference,” Valencia said.

Zapotoski said the phases for the data portion of the exercise run along similar lines as the radio portion. During the first phase, each nation partnered with one other nation and constructed and tested their network.

During the second phase, the nations are building and testing a series of interconnected computers that share data within their associated economic region.

In the last phase, the regional networks will be tied together to simulate a wide area network.

“Our goal is to be able to identify and configure a routing protocol that can be used to communicate on a basic level,” Zapotoski said.

Building Strong Relationships

A quick visit to one of the tents or buildings on the site reveals that the exercise involves even more than technical exploits and data gathering.

Fuller said the exercise has provided the US and African participants with an opportunity to build professional and personal relationships.

“It’s a rare opportunity to interact with military representatives from 25 different countries at one time,” Kish said. “So there have been plenty of chances to interact with each other and share in each other’s culture.”

“The whole experience has been tremendous,” Augustine said. “In the sense that we are all Africans and we each face similar problems, being able to cooperate and work together to solve some problems is very nice.”

According to Fuller, various events designed to increase interaction and cultural sharing are built into the exercise itself, including traditional meals, social gatherings, team sports and even the exercise’s location, which is held in a different country each year to promote cultural exchange.

For this year’s exercise, even the initial and mid planning conferences were held in different countries.

“That’s what this exercise is really all about,” Fuller said. “Getting on the same sheet of music, as far as communication is concerned, and building those relationships so that either these partner nations can work together in the future.”

I like what Augustine says above, if solving problems means solving them for all of society. I very much fear most of the problem solving will be aimed at solving the problems entrenched elites and authoritarian governments face protecting their power and privilege from the rights,  needs and desires of the people they govern.

The US military is full of good people with excellent intentions and with high degrees of skill and professionalism. It is fun and a privilege to work with them. But the overall intentions of US leadership, and its corporate power brokers, may not always be so benign.

On October 8 Richard Ellimah published the following on GhanaWeb, which articulates many of the important questions for Ghanaians regarding the exploitation of oil resources:
Environmental Impact Assessment Of Jubilee Field And Matters Arising

Ghana Oil truck and worker

The public hearings which are a mandatory part of the processes towards securing a permit to start oil drilling are almost over. At least, all the oil affected districts – Jomoro, Ellembele, Nzema East, Ahanta West, Shama and Sekondi-Takoradi – have had the opportunity to interrogate the Environmental Impact Assessment (EIA) of Tullow Oil and her partners.

Judging from press reportage of the hearings, some critical issues need addressing. First of all, it is obvious that people within the six districts that will be affected barely have enough information about the oil that has been discovered close to them. They therefore are incapable of participating in processes that would help them deal with any possible impacts that will occur. The information they have does not go beyond the rudimentary chorus of “Ghana has discovered oil”. Information is absolutely necessary to enable affected people make crucial choices. Absence of information produces half-truths. As people who will suffer potential impacts of the oil industry, they have a democratic right to information. For instance, to what extent has the district assemblies been updating communities on the impacts of the oil discovery to enable a more coherent response to be prepared? Already, fisher folk in these districts have started suffering some impacts. They have been instructed to steer clear of a particular radius of the oil rig. Incidentally, all the fish appear to have taken cover in areas close to the rig, making it difficult for the fishermen to get them without incurring the displeasure of the navy that patrols our territorial waters.

Furthermore, the public hearings have re-opened debate about environmental impact assessments. Judging from what happens in the mining sector, these are highly technical reports which even the average educated person cannot read and understand, let alone interrogate. The Non-Technical Executive Summary alone of the Jubilee Field EIA is 62 pages. Public hearings are supposed to be an avenue for the oil companies to tell the people how their operations will impact them and the measures that have been proposed to deal with these impacts. At these hearings, the public can question portions of the report that, in their opinion, are unsatisfactory and proceed to make inputs into it. These inputs are then taken onboard in the design of an Environmental Management Plan which the companies are expected to submit to the Environmental Protection Agency (EPA). Unfortunately because capacity is low at the local level, the public most times, make little or no inputs at all into the process. Sometimes, the few educated people may also raise issues which are either over-blown because they have not had time to look at the report and make informed comments, or simply make comments out of ignorance. Probably this calls for a review of the design process of the EIA so that it can be disseminated to community groups in a language they understand, over a period of time so that they will be fully armed to question the process. These one-day public hearings where uninformed people are expected to comment on technical documents do not help. One is tempted to describe the process as being only cosmetic. Simplifying the process is critical to enlightening affected people on the potential benefits and problems. When actual drilling begins, they would therefore have been armed and well prepared for the impacts.

Another major concern is the over-concentration of all activities in the Sekondi-Takoradi Metropolis. Curiously, all literature about the oil find acknowledges Takoradi as potentially the most impacted community. Indeed, the non-technical executive summary of the EIA of the Jubilee Field only acknowledges Takoradi Metropolis and Shama District as the most impacted communities. A comprehensive population profiling has been done for these two communities in the document, curiously leaving out the three Nzema Districts and Ahanta-West District. Though attempts have been made to address this in the main technical document, it is still not enough to assuage this unpardonable error. At this stage of project development, it is dangerous to give any group of people the impression that they are being marginalised. As a result of the undue emphasis on Takoradi and Shama District, interventions have been narrowly designed to address their socio-economic problems. It is undisputable that Takoradi is the major urban centre with all the facilities and services that can support the industry. It also does not take away the fact that other satellite communities need to be developed. The best way to do this is to re-locate some of the functions and activities concentrated in Takoradi to communities like Axim, Essiama, Agona Nkwanta and Half-Assini. This, apart from decongesting the Metropolis will also lead to a spread of infrastructural development in the other districts. This requires a concerted policy direction from government to address the imbalances in settlement development in the region.

The oil companies have committed themselves to undertaking rigorous corporate social responsibility (CSR) as a way of ameliorating the impact of their activities on the communities. There is no doubt that oil drilling will have some socio-economic and environmental impacts, though much of the drilling will take place offshore. Designing a comprehensive, community-sensitive and coordinated corporate social responsibility programme will go a long way to help. Historically, CSR has been a voluntary initiative by industry. Current practice has called for a radical review of the way CSR is conceptualised. For instance, in the mining industry CSR has been used as a balm for soothing community demands for fairness in their dealings with the mining companies. More often than not, companies have undertaken social responsibility projects more as a deliberate attempt at boosting their corporate image rather than a genuine effort to address community concerns about their operations. To make it more practical and relevant, I propose that legislation on social responsibility should be passed. Like happens in the forestry sector, companies wishing to undertake oil exploration and drilling should be compelled to sign social responsibility agreements with their catchment communities. This initiative will serve two purposes. Firstly, it will ensure bottom-up development planning by encouraging the fullest participation of ordinary community people in deciding what kind of development they want. Doing this will ensure that resources are channelled to areas where they are specially needed. Besides legislating CSR in the oil sector, there is also the need for a more coordinated approach to providing projects within the oil catchment areas. The district assemblies in these areas should not under any circumstances be sidelined in the provision of CSR. I propose that every CSR endeavour must find space in the Medium Term Development Plans of the district assemblies. This way, development will be better coordinated and ensure that resources are channelled to priority areas of development.

The other concern that the EIA presents is the human resource requirement for the project. According to the report, 760 people will be employed in the initial development phase of the project. This figure will however, drop to 300 during actual drilling. My concern is not with the number but the fact that 50 percent of this 300 will be expatriates before the percentage drops to 10 percent within four to eight years. What this effectively means is that between 4 – 8 years of the project life, only 150 Ghanaians can be employed in the oil business. The 50 percent expatriate participation is extremely high considering that Ghana has enough capacity to handle some of the middle-level positions that the companies will be requiring. The Ghana National Petroleum Corporation (GNPC) that has been in the oil business for more than 20 years has enough trained Ghanaians who can handle any position in the companies. Some of these Ghanaians have even supported the oil sector of countries like Qatar, Gabon, Angola, Nigeria, United Arab Emirates and Mozambique. We do not need to wait for eight years to put Ghanaians in positions where their expertise can be utilised.

Finally, there is the absolute need for transparency in the oil industry. Transparency here does not only refer to revenues that will accrue to government and other stakeholders but also includes transparency in terms of the disclosure of the content of all agreements our governments have signed with the companies. Full disclosure will clear doubts that the country’s interests have been sacrificed for a pittance. This is where civil society groups must be more proactive. They should not wait for these agreements to be signed and operationalised before raising the red flag. Right from the beginning they should engage the stakeholders to ensure that the country is not short-changed.

Ghana cannot afford the luxury of waiting for another generation to correct mistakes that it has committed in the prudent management of her resources. Next door neighbour Nigeria has a lot to teach us about what can happen if the right structures are not put in place in the management of oil. If Nigeria is too extreme an example, let us consider what over a century of mining has done to the country.

The author is a Development Practitioner and resides in Obuasi. He can be reached on Post Office Box UPO 853, KNUST-Kumasi; or on telephone 0244-514559; and by email on richellimah (at) yahoo.com.
photo credit
* * * end * * *

From the comments on the article:

Ghanaba Papa: Good Comment:

The traditional councils in the impacted areas should also be part of the monitoring and reporting on the effectiveness of the Environmental Management Plans. Also, the impact of the oil activities on agriculture (fishing), as you allude to, nust be fully addressed and mitigated.

Slugger reemphasizs the final paragraph: Way Forward:

Ghana cannot afford the luxury of waiting for another generation to correct mistakes that it has committed in the prudent management of her resources. Next door neighbour Nigeria has a lot to teach us about what can happen if the right structures are not put in place in the management of oil. If Nigeria is too extreme an example, let us consider what over a century of mining has done to the country.

I know: CSR:

The CSR personnel at Tullow are actually not CSR experts. They were put there for political expediency. At best, they are only Public Relations Practitioners, and not professionally trained Social Impact Assessors.

Any good environmental and social impact assessment should profile communities “directly impacted” by the extractive industry, be it mining or oil and gas exploration, construction and production. And the assessment must include environmental, economic, social, cutural, and health impacts, and detail mitigative measures that would be put in place to ameliorate the negative impacts, as well measures to advance income enhancement and community development interventions necessary for sustainable development. These are lacking in the draft EIS.

Reading through the draft EIS,it is apparent that the team is heavily skewed for marine engineers than social assessors. And that is the cause of the flaw.

It is not too late to amend. Otherwise we are heading for another Ogoni!!! Who knows whether it is deliberate. I dont trust these guys, anyway.

Marcus Ampadu: REMEMBER KEN SARO-WIWA:

Environmental groups in Ghana should organize and position themselves to closely monitor the ecological consequences of the oil exploration and drilling in the affected areas. One activity we shouldn’t allow is gas flaring.
We shouldn’t wait for something terrible to happen environmentally to tragically get our version of Ken Saro-Wiwa of Blessed Memory.

There is more in the comments discussing these issues.

Over at Say It Loud Patriot Turncoat writes:

A Model for a Petrochemical Industry in Ghana

Ghana expects to generate about $3.5 billion a year in revenue from the export of crude oil. For a country with a population of 25 million, this translates to only about $140 per person per annum, as compared to some middle-eastern countries where tens of thousands of dollars are generated per person from the mere export of raw crude oil.

In other words, if Ghana were to focus merely on exporting raw crude oil, there would not be enough money to make all Ghanaians happy, so a few would be made happy at the expense of many; a recipe for resentment and political agitation, more so given the high expectations.

We can however make a large number of Ghanaians happy by facilitating and creating the right business environment for the establishment of petrochemical industries to add value to crude oil. Such an industry would provide employment for many while generating higher returns due to the value-add. For the African and world market, Ghana could produce assorted chemicals, insecticides, fertilizers, plastics, engine oil, machine lubricants, power steering fluids, detergents and soaps, paints and varnishes, pharmaceutical chemicals and many more. After all, merely exporting crude would only feed the petrochemical industries of foreign nations, generating more employment for their citizenry while our citizens are left unemployed and destitute.

We are all aware of how exporting raw cocoa, without first adding value, has fed the chocolate industries of developed nations at the expense of our economy. Same applies to other raw material exports. …
…
Fortunately, Ghana does not have to reinvent the wheel. There are working models all around the world which Ghana could adopt and adapt to address her specific needs.

For example, we could model Ghana’s petrochemical industry after Houston’s Spaghetti bowl which has several miles of pipe-lines connecting salt domes, fractionation plants, chemical plants, and refineries. The pipeline system emerged under private ownership in the 1940s to feed an ethylene production industry, thus paving the way for Houston’s petrochemical industry which provides employment to millions.
…

Patriot Turncoat has some good ideas, but shows an uncritical faith in free markets. Recent events in global capitalism demonstrate the need for some skepticism and oversight.

Today there are further developments in the issue of the sale of Kosmos’s stake in the Jubilee Field.

Kosmos’s Ghana sale bid “illegal” -GNPC source

ACCRA, Oct 12 (Reuters) – State-run Ghana National Petroleum Corp (GNPC) has told Kosmos Energy that it does not recognise a deal to sell its stake in the Jubilee oil field to Exxon Mobil (XOM.N) as it was illegal, a NGPC source said.

The source, who declined to be named, also said that Ghana had received expressions of interest from the China National Offshore Oil Corp for Kosmos’s stake but the West African state was ready to buy it all and decide later with whom to partner.

The Jubilee field is one of the largest oil finds in West Africa in the past decade and sources said last week that Exxon Mobil had reached a multibillion-dollar agreement with Kosmos to buy its stake in the field. (Reporting by Kwasi Kpodo; Writing by David Lewis)

And this story has also popped up today:

Fight For Ghana’s Oil: Exxon vs China

… China, Ghana petroleum co in talks
… Kosmos To Sell To Exxon Mobil: WSJ
… GNPC says Kosmos sale bid illegal
… Officials in Ghana says no approval yet
… GNPC ready to buy entire Kosmos stake
… Morgan Stanley hired to advice

A Kosmos official confirmed that the energy firm has a “binding deal” in place to sell an interest in the potentially vast Jubilee oil field in offshore Ghana to oil major Exxon Mobil.

The deal — valued at an estimated $4 billion — would mark Exxon Mobil’s largest acquisition in about a decade.

It comes amid reports that China National Offshore Oil Corp. (CNOOC) – see report below – could also bid on assets off the coast of Ghana.

Kosmos Vice President and Chief Financial Officer Greg Dunlevy said in an e-mail to MarketWatch, “I can confirm that Kosmos has entered into an exclusive, binding agreement with (an affiliate of Exxon Mobil) to make a rival bid for Kosmos’ stake in the field, known as Jubilee.”
…
China National Offshore Oil Corp is in talks with State-run Ghana National Petroleum Corp to bid for a stake in a large oil discovery off West Africa, the Wall Street Journal reported on Monday, citing unnamed sources.

The offer for Kosmos Energy’s stake in the discovery, Jubilee, would rival a $4 billion bid by Exxon Mobil Corp, the Journal said. The paper said CNOOC and GNPC plan to submit a strong competing bid in the next few days, citing one person familiar with the matter.

According to the Journal, the Chinese company sent some senior officials to Ghana several weeks ago, including CNOOC Chairman Fu Chengyu. The paper said CNOOC committed to an equity stake for GNPC in the deal and discussed helping the Ghanaians develop their national oil company.
…
State-run Ghana National Petroleum Corp (GNPC) believes Kosmos Energy’s deal to sell its stake in the huge Jubilee oil field to Exxon Mobil (XOM.N) is illegal and is ready to buy the stake itself, a GNPC source said on Monday.

Ghana has received expressions of interest from the China National Offshore Oil Corp for Kosmos’s stake, according to the source, who declined to be named. But the West African state is ready and able to make the purchase on its own, and would decide later with whom to partner.

The Jubilee field is one of the largest oil finds in West Africa in the past decade and sources said last week that Exxon Mobil had reached a multibillion-dollar agreement with Kosmos to buy its stake in the field.

“We have formally notified (Kosmos) that we do not recognise whatever agreement they reached with Exxon — we told them we disapprove of it because it’s illegal,” the GNPC source said.

The source said Kosmos had violated Ghanaian laws when it shared confidential exploration data with over 20 companies for its own commercial purposes without giving the GNPC any prior notification.

Ghana is due to start pumping oil from Jubilee in late 2010 and the country’s oil finds and relative stability in a turbulent region are luring investors.
…
The Wall Street Journal reported on Monday that China’s CNOOC was in talks with Ghana to rival Exxon Mobil’s $4 billion bid for Kosmos’s stake in Jubilee.

The GNPC source confirmed that the CNOOC was interested.

“But as far as GNPC is concerned, that also remains only as an expression of interest, like many other companies … It could be any company — it could be the Chinese, it could be Exxon,” the source said.

Kosmos owns the field with UK-based oil explorer Tullow Oil and Houston-based Anadarko Petroleum ). It put its interest in the field on the market earlier this year.

I want Ghana to get the best deal. A deal that involves jobs for Ghanaians and training, high end jobs, and environmental protection. Neither Exxon, nor the Chinese have good records or reputations in this regard. It is up to the Ghana Government to get and enforce the best deal for Ghana and the Ghanaian people.

So my question is, what, if anything, is going on under the table? Who may be getting paid for what? It is much easier for the Chinese to pay bribes than for Exxon, although Exxon is resourceful. Or is GNPC being revolutionary, and actually looking out for the development interests of Ghanaian citizens, by trying to add value to the deal? I surely hope so. We know the Chinese government is involved. Is the US government involved as well? Given the culture of corruption that was heavily institutionalized by the previous administration, and the tradition of corruption in the oil industry, in which neither Exxon nor the Chinese have clean hands, I fear there are too many people who look at the previous administration and see government service as a path to wealth. I believe President Mills is an honest man who cares deeply about doing the best for Ghana and Ghanaians. I don’t know about his ministers. I reserve judgement about intentions or motives unless I know or can see more.

Govt studying Exxon-Kosmos deal: State-run Ghana National Petroleum Corp (GNPC) is studying an agreementby Exxon Mobil to buy Kosmos Energy’s stake in the Jubilee field in Ghana before passing it to the energy ministry for its perusal, a Ghanaian government source said on Wednesday.

‘GNPC is required to look a the entire deal as negotiated — the idea is to ensure that it is the best offer not only in monetary terms but also it should come with the technical expertise,’ the government source involved in the energy sector told Reuters.

Oil map offshore Ghana from Borneo British Petroleum

There are a number of comments on this article at GhanaWeb that provide more information and insight:

MKO explains in more detail how this works:

1. The Ghana govt granted Kosmos (together with other companies, forming a consortium)exploration rights for a fee, which was paid to the govt. The license (exploration rigths) – comes with some conditions attached.

2. Kosmos as the holder of the equity (by virtue of it contribution to the consortium) has the right to sell its sake to any buyer of its choice.

3. Kosmos is owned by a private equity (PE) group. PE generally operate on short / limited time span on projects. Typically what they do is acquire companies, add value (sometimes thru restructuring or other means), and the sell the company to make profit for the investors who gave them the money to buy the company/ run the project in the first place. The PE group then takes a % of the profit and a commision as reward for their “”management wizardry”" (usually 2% of the total investment commited and 20% of profit realised)
For this reason PE’s are not interested in hanging around unnecessarily – projects usually have a timeline of say 3 to 7years which contractually binding. So if they do not sell before the time they usually lose thier commission and their profits become jeopardized (sometimes zero)

4. Now GNPC on behalf of the governmant of Ghana, has the right of refusal to any deal that KOsmos enters into based on an earlier contract that they have with the Govt of Ghana. The reason for objection would have to be leagally justifiable. (could include lot of issues for example some aspect of the Govt’s contract with Kosmos is being circumvented/ altered in the Kosmos sale to Mobil, Mobil’s business operations has violated Ghana statues in the past and was not resolved, etc, etc,

5 So GNPC has to look at the sale agreement between Kosmos and Mobil to make sure that no clause of the original agreement has been violated.

6. This process is usually just a formality – govts don’t block such sale unless there are other factors such as effect on local competition, monopoly, unfair advantage etc.

7. The main reason why the Govt has to go for these arrangements is because we lack the technical expertise, but more importantly we usually lack the capacity to raise funding for such projects independently on the worlds finance markets.

Kay includes that the:

… State of Ghana gives its natural resource to Kosmos for processing while we share profits at 90% Kosmos and 10% Ghana. Please note that we share only profits, and as a nation, we do not even know what kind of investments the oil companies are making into the project.

That is why today, Kosmos says they have spent $800 million and as a nation, we have no way to verify this. Kosmos has used our own reserves to push their stock market prices to the roof. Now, out of the blue, Kosmos decides to sell the reserves for $4,000 million. What that means is that over time, our profit margins will reduce because Exxon Mobil will have to recoup these investments each year, reducing profit margins that should accrue to Ghana. Kosmos and Exxon are part of one and the same clique. This arrangement then makes it impossible to carry out any form of future re-negotiation with Exxon Mobil.

What is the basis for Kosmos selling the oil for $4,000 million? Only three months ago, they had put it for sale at $3,000 million. …

MKO responds to a number of comments:

…
To be frank with you I don’t think Kosmos give a toss about GNPC, Exxon or the Chinese. They are only interested in making the maximum return for their investors. Unless of cause there is US governmental influence encouraging them to favour Exxon Mobil. If that is the case, it would also come with a premium (=more $$) so why would they not take it, earn more cash and also earn brownie points in high places. And you would not be able to fault them because they would have brought a globally reputable company with the technical know how and expertise to the table for Ghana to tap into, and would have made their investors tons of money and their govt presumably happy because they’ve created jobs thru Exxon.
…
Currently there is so much competition for money for oil and gas projects worldwide (this my surprise you, but there is not enough money to go round for every project!! in spite of Sino-dollars)

Bare in mind that there has been significant new finds in Uganda-Kenya, several in Brazil, Liberia/serraloene, Sudan, Gulf of Mexico, North Sea, even Lybia amongst others. The owners of all of these are looking for investments. So do not think that just because we’ve found oil every body will queue to beg to invest with us.

The position of the jubilee fields may be strategic for the US. That I can understand; for example it would be cheaper to transport oil from West Africa than form the Mid-East; like-wise bringing equipment and services.

We’ve been told that production may start in Q3 (jubilee). Why such a wait? There are so many reasons, one of them being that the vessel required for production is now being fitted/ refitted in Singapore. And I understand that it really took a while to secure because of funding constraints.

We need private Ghanaians who would inspire confidence in investors and or collaborators and understand the mechanics of operations – We need to develop local competencies and capabilities, PERHAPS this George Owusu could be a catalyst.

With regards to the Chinese, What I can say is because of forecasted growth in their economy they seems to have adopted the policy of acquiring sakes in sources of energy where ever they can. This also I can understand. However from a business perspective we know that fore casts are usually wrong. Which would raise a few questions

1. If the Chinese because of their wealth acquires so many oil field around the world, would they develop these fields at the same pace? My answer would be No, since it would not make economic/business sense.
And what criteria would they use to develop these fields that they now own? I don’t know. What I know is they are interested in oil for local consumption and not necessarily for trade.

2, What would be the competitive advantage to the Budding Ghana oil industry by having Exxon or Chinese? I would not be able to do justice to this question now.

Finally in my opinion, I think we can have the both. Estimates suggests that there’s lot more oil lying off-shore on our coast. The chinese should perhaps also acquire exploration licenses or buy into other exiting exploration groups …and get to work!

In these things the terms of contracts are related to the risks involved. Relative good terms where there are huge risks, and vice versa. One would therefore expect that going forward terms of contracts should be more favorable to the Country.

Prior to the Kosmos (Tullow, Anadarko) finds, the risks involved were very high – but not so now!
It would therefore worry me if the Chinese want to muscle their way into the Tullow-andarko setup through Kosmos simply because they want to benefit from the terms of contract that these guys have ….which the chinese thinks looks very “Yummy”

Besides …I would not put the Chinese and Tullow-Anadarko (UK, US) together. This combination may lead to inefficiency of operations – to the disadvantage of Ghana. I would rather they compete independently.

I know the US State Department and AFRICOM want a close connection with Ghana. Ghana is strategically located on the coast of West Africa amidst oil finds and other natural resources. Ghana is a working democracy and a congenial place to visit as President Obama found. AFRICOM has been very busy trying to insert itself into Ghana and the Ghanaian military. One Ghanaian comment I read called Ghana the center of the world, the country closest to the intersection of the Equator and the Prime Meridian. I don’t know how relevant this last is, but I like the image. So I think it is entirely possible that there has been US governmental influence encouraging Kosmos to favor Exxon.

Oct. 6 2009 – U.S. oil giant ExxonMobil has bought Kosmos Energy’s stake in oil blocks offshore Ghana that contain large oil discoveries … The deal marks the first entry by one of the world’s major oil companies into what is proving to be a significant new oil province and may pave the way for further acquisitions.

Top: Kosmos’ discovery of the Jubilee Field will enable the Republic of Ghana to join the ranks of significant West African oil exporters. Bottom: Kosmos’ deepwater Jubilee Field development scheme offshore Ghana includes the design and installation of sophisticated subsea architecture connected to a floating production, storage and offloading vessel (FPSO).

Analysts at Morgan Stanley put a value of $3.3 billion to $5 billion on Kosmos’ stake in the blocks.

ExxonMobil declined to comment. Kosmos was not immediately available to comment.

The Kosmos blocks contain the Jubilee field, which is operated by Tullow and is estimated to hold between 1.2 billion and 1.8 billion barrels of oil equivalent. A separate discovery offshore Sierra Leone last month by Anadarko, at the western extreme of the same geological formation that contains Jubilee, signaled the potential for further multi-billion barrel discoveries stretching eastward for 1,100 kilometers through the waters of the Ivory Coast and Liberia.
…
“The Ghanaians should be very pleased. They’ve got an embryonic oil industry,” and now they have the involvement of one of the largest, most experienced and technically qualified oil companies …

A large number of major international and state-owned oil and gas companies were among potential buyers of this strategic asset. These companies have been informed by letter that Kosmos has entered into an exclusive arrangement with ExxonMobil, the person said.

Kosmos holds 30.875% of the West Cape Three Points Block and 18% of the Deepwater Tano block. Its partners are Tullow Oil PLC (TLW.LN) and Anadarko Petroleum Corp. (APC).

Jubilee field straddles both blocks and Tweneboa discovery in Deepwater Tano is thought to be another large oil reservoir.

Here is a map, with a bit more info from Kosmos Energy.

Kosmos map, oil blocks off the coast of Ghana, click to enlarge

Today, Oct. 7, Reuters updates:

ACCRA, Oct 7 (Reuters) – State-run Ghana National Petroleum Corp (GNPC) is studying an agreement by Exxon Mobil (XOM.N) to buy Kosmos Energy’s stake in the Jubilee oil field in Ghana before passing it to the energy ministry for its blessing, a Ghanaian government source said on Wednesday.

“GNPC is required to look at the entire deal as negotiated,” said the government source involved in the energy sector.

“The idea is to ensure that it is the best offer not only in monetary terms but also it should come with the technical expertise,” the source told Reuters.

The Jubilee field is one of the largest oil finds in West Africa in the past decade.

Sources close to the matter said on Tuesday Exxon had agreed to buy a stake which analysts have previously valued at up to $5 billion.
…
Under the Ghanaian vetting process for the deal, the energy ministry will pass it on to President John Atta Mills’ cabinet for approval, the government source said without giving a timeframe for a decision.

From the Dallas Morning News:

Exxon Mobil Corp. is in talks to buy a stake in a massive oil field off the coast of Ghana for around $4 billion from Dallas’ Kosmos Energy LLC, according to media reports and a person familiar with the deal.

Kosmos, a privately held oil and gas company that focuses on West Africa, sent a letter to other bidders terminating the process, according to a knowledgeable industry source, and entered exclusive talks with Irving oil giant Exxon. A sale would require approval from Ghana’s government, said two people familiar with the process.

Ghana is set to become West Africa’s newest oil exporter in late 2010, when output begins at the Jubilee field. The deal comes at a time when Exxon’s oil production has declined and the company has said it might fail to meet its 2009 target for 2 percent output growth.

Exxon, Kosmos and the private equity companies involved in the negotiations declined to comment publicly on the deal.

“Exxon Mobil routinely evaluates potential development opportunities around the world. We do not comment on the details of commercial discussions or opportunities,” Exxon spokesman Patrick McGinn said in an e-mail.
…

Kosmos is led by James Musselman, former chief executive at Triton Energy Ltd. Triton discovered oil off the coast of Equatorial Guinea and was sold to Hess Corp., then known as Amerada Hess Corp., in 2001.

Musselman and his partners started Kosmos in late 2003 after raising $800 million from private equity investors Blackstone and Warburg Pincus.

The Jubilee sale marks the company’s first asset sale. Rather than producing oil, Kosmos’ business model is finding oil fields and selling them.

The Wall Street Journal reports:

Blackstone Group LP (BX) and Warburg Pincus LLC’s stake in Kosmos Energy has turned out to be black gold, indeed.

The agreed-to sale of the company’s stake in several oil discoveries off the coast of Ghana to Exxon Mobil Corp. (XOM) for $4 billion represents a cash on cash return of approximately four times for the two buyout firms over a period of five years or so.

Blackstone declined to comment on the deal’s internal rate of return; Warburg Pincus could not be reached for comment. The two firms own most of the company, with Warburg Pincus holding the larger share, at 55%. Management also owns a small stake.

The two initially invested $300 million in the business in 2004 to help it explore for oil and gas in West Africa. Upon the 2008 discovery of the Jubilee field, one of the larger recent finds off the West African coast, they put in an additional $500 million.

It was a big bet in a geographic region that other oil companies had scoured for years with little luck. But Warburg Pincus and Blackstone were willing to place their faith in Kosmos Chief Executive Jim Musselman and his team, who had delivered a home run for private equity before. The Kosmos team had previously led Triton Energy Ltd., a company backed by Hicks Muse Tate & Furst Inc. that was sold to Amerada Hess Corp. in 2001. Hicks made back $1 billion on that $350 million 1998 investment.

It is fairly common for private equity firms to provide capital to experienced management teams in the oil and gas industry, allowing them to develop resources to the point where the company can go public or draw the interest of a larger strategic player. That model is now being seen increasingly in emerging markets as well as private equity firms expand their global reach.

Another major player off the coast of West Africa, Cobalt International Energy Inc., filed for a $1.15 billion initial public offering last month. That company is backed by First Reserve Corp., Carlyle/Riverstone, Goldman Sachs Group Inc. and Kern Partners Ltd., and in April partnered up with French oil giant Total S.A. (TOT) to prospect for oil in the U.S. Gulf of Mexico’s deepwater.

First Reserve also recently set up a new venture in Southeast Asia, KrisEnergy Holdings Inc., to explore for oil and gas, committing $500 million to support it.

Older deals include a $35 million 2008 investment by Emerging Capital Partners in Ocean & Oil Investments Ltd., a Nigerian investment company; and a $380 million investment led by Pine Brook Road Partners LLC in 2007 in Asia Pacific Exploration Consolidated LP.

The sharks are out in full force. Ghana will need to swim like a dolphin. As most readers here already know, the problem with the oil resource curse is not just that it keeps people poor, it actively makes them poorer than if there was no oil.

You can see a range of Ghanaian reaction in the comments to the original article on GhanaWeb, here are some samples:

Idiots in Govt writes: Yes, let’s go for the big boys. They may not give you as much on the side but they will do a good job. Good Job Mills.

Sir Jay writes: with America company now on board, Ghanaians must tightened their belts and hope for the worst for Ghana. just look at the Ogoniland and its people and it will not be hard to see what Exxonmobil is capable of doing.
Now the future is bleak.
I am scared !!!!!!!!!

American boy writes: ExxonMobile is quite possibly the worst company you’d want coming into your country.
I guarantee you this will happen. There will be a few, maybe 100 corrupt Ghanaians who will get rich from the oil.
Everyone else will not even know oil was discovered anywhere and will continue to be poor.

Unfinished Vision writes: Let the rip off begin — I mean resume.

Diamond replies to Unfinished Vision: Strong message with a humorous twist.
Beautiful.
All we have to do is to tell them what we want. If they do not like it, we can seek other partners.
Nobody is totally safe, but maybe the Chinese? Russians?
Boy, I pain for Ghana.
Is there hope in any direction?
The Saudis, the Emirates, the Kuwaitis?
Can anyboby give us an honest deal?
Can any of our politicians work for us?
Mabey & Johnson (Ghana), Scancem (Ghana), British Aerospace (Tanzania), Haliburton (Nigeria).
Oh, Afrika.

Annex writes: These guys are such bad news. They are so tied to the U.S imperialism, I feel so sad for Ghana. They will influence our politics and corrupt are leaders. NDC are proving to be worse capitalists than NPP. It may true Obama showed up because of oil.

DRAGON alexandria.VA writes: they are the cause of nigerias oil calamity.environmental degradation,pollution,corruption etc..mills be careful with this company

Nana Kwame writes: Exxon/Mobil is a unscrupulous oil predator. Ghana should not rejoice because of their interest.
It is about time GNPC raises enough funds from China, remember China has a $1.95 trillion foreign reserves to lend, so that we buy this Exxon/Mobil interests out of the venture.
Exxon/Mobil is just a gigantic oil predator and parasitic company. It simply has not got the development interests of developing countries at heart.

emmanuel writes: Why should this be any surprise? The purpose of ANY corporation is to make money for the stockholders. If you don’t like that then try communism and see where that gets you.
If Exxon had priorities other than making money for the shareholders then it would have gone bankrupt a long time ago. It is a damn successful and well-run company–in fact it is the biggest corporation in the world.
Should corporations have limits placed on how they do business to protect citizens and employees from abuse? Absolutely. Just make sure that Exxon does things in manner prescribed by law (and if they are allowed to get away with such things in Ghana then whose fault is it, really?

Kaakyie_Nua writes: This is the same Exxon/Mobil which packed up, sold its assets to Total and left town rather unceremonously. The question our politicians should be asking is this: Why do they want back in?
U see they got the daylight kicked out of them by Hugo Chavez and so they want to weasel their way back into Ghana and take advantage of us again.
While Ghana is open and receptive to mutually beneficial foreign investments, Prof. Mills and his team should make it abundantly clear to all commers including Exxon/Mobil that the “rules of the game” have changed and that the benefits of the oil find should should be enjoyed, first and foremost, by Ghanaians particularly the local inhabitants. For this to happen they should take steps to prevent excessive “Flipping” that is commonplace in the oil industry.
If Exxon/Mobil has come back to stay, then they are welcomed to help us develop our oil industry. If this is not the case, then they will be better off somewhere else. Perhaps in Alaska their own backyard.

Lin writes: I am an American and know how American corporatons operate. Ghana
is in the driver’s seat now. But if it isn’t careful it will be riding in the back seat and the driver won’t be a chauffeur. Before the game begins be sure they ante up and above all cut the cards. Also stop the ngame from time to time and get a new deck.

Ogyam writes: what is all these? can someone explain? just confused. SIMPLE!!

Kaakyie_Nua writes: Have done their bit and the “big players” the likes of Exxon/Mobil etc have come in to take over.
They have paid Tullow a decent price plus handsome profit for the leg work they have done.
The trouble for Ghana is that the value of this find on paper has shot up substantially when nothing has changed in terms of the physical assets on the ground.
Look, I am sure made all kinds of promises to the local residents and the govt and we live to see if Exxon/Mobil will honour all of them.
Look at it this way: Instead of the corner mechanic servicing ur automobile, u have a delearship taking care of it. Do u think ur maintenance costs are going to be lower? Remmember the R&D operations take place in the home country and the local operations have no say how much they have to pay headquarters in the States.
True a similar thing would have transpired under Tullow but to a much lesser degree. U see size matters a lot in business dealings.

JO ZONGO writes: I think that´s good news as well. Most experienced and qualified companies can help our stuation more in. But where from this infomation? GHANAIAN NEWS or GHANA NEWS?

Nana Kwame asks: When was the last time the CEOs of the major oil companies helped you?

Pastor Ernest Opoku Agyeman writes: I think in dealing with the contract of the oil, political divisions should be set aside. The focus should be Ghana and the people of Ghana. Secondly, the managers representing Ghana should be careful in dealing with every aspect of the wording of the contract and consider inflation in the next 50 to 100 years. We should not forgotten the timber, gold, diamonds, bauxite contracts that did not help Ghana due to the fact that our people did not think about the future before undertaking that contract. All the politicians must come together and think through what the benefits or development shall we need from these companies. Next…

Big Talk writes: 10 %.Can you beleive this? And they have started taking loans even before their ……%.

No Wonder writes: It looks good yet it’s a death warrent to many folks to come. This is a company whose dealings has cost so many human lives and burn the earth around the globe including their own home country, talk to the Alaskan, south Americans – Amazon forest etc. Now they are coming to Ghana and will support both political parties like they do in their own homeland but in our case they will do what they do best take the oil out send the funds back in arms – weapons so we could distroy ourselves. Look at Nigeria etc. so before we go out singing and dancing please listen to the tune and watch the drummers carefully before they change the beat on you.