The Oil and the Glory
Liberia’s throw of the resource-curse dice
Deep undersea offshore from west Africa is a 625-mile long geologic formation that is one of the world’s least-covered magnets for oil companies from around the world. Already this formation, created in the Cretaceous period as many as 100 million years ago, is producing some 3 million barrels of oil a day, a volume that ...
Deep undersea offshore from west Africa is a 625-mile long geologic formation that is one of the world’s least-covered magnets for oil companies from around the world. Already this formation, created in the Cretaceous period as many as 100 million years ago, is producing some 3 million barrels of oil a day, a volume that in three years or so may grow to more than 7 million barrels a day. The current sources for this bonanza are Ghana and Nigeria and further down the coast in Angola, but Liberia and Sierra Leone — better known for their devastating civil wars — may also become serious petrostates.
The latest news from the Gulf of Guinea regards Liberia. Last week, Chevron CEO John Watson was in the capital of Monrovia to talk about the company’s plans to begin exploratory drilling 110 miles offshore toward the end of this year. Chevron is shifting a deepwater rig called the Discoverer Spirit to Liberia from the Gulf of Mexico. If it finds oil, as has already been done along the Cretaceous trendline in nearby Ghana, Chevron could begin production in Liberia by the end of the decade, writes Mehreen Khan at the Financial Times.
The rise of the Gulf of Guinea as an oil-rich region is notable for at least a couple of reasons. One is the geopolitical stakes. The United States, for instance, has embraced west Africa as a region that could easily meet half of U.S. oil imports, and reduce worries about the politics of the Middle East and Venezuela. Currently the U.S. imports about 9 million barrels of oil a day.
The policy goes back to the George W. Bush administration, and grew. David Goldwyn, former State Department coordinator of international energy, told me that when Obama Administration energy officials looked at the world, they saw just three places that could provided oil supply growth — Kazakhstan, the Gulf of Mexico and the Gulf of Guinea. As regards the latter, he said, "It is important politically, it is important diplomatically, it is important for the oil market."
Another reason is the resource curse. Liberia, whose last civil war ended in 2003, is easily a prime target for an orgy of spending of the sort often seen at the outset of resource booms — yachts, villas, Swiss bank accounts, not to mention needless infrastructure projects. Such outlays usually leave much of the population still impoverished.
Liberian President Ellen Johnson-Sirleaf (pictured above with U.S. President Barack Obama), who is seeking re-election in October, is attempting to avoid the malaise with a transparency program, writes Penelope Chester at UN Dispatch. If she does, Liberia and west Africa as a whole could end up largely defying the curse.