Newsday (New York) July 04, 2003
Bounty of Riches, Misery
Prospects of oil could bring more violence to Congo
By Samson Mulugeta
Bunia, Congo - Eastern Congo is blessed - some say cursed - by some of the world's largest deposits of gold, diamonds and other minerals, which have helped finance the combatants in a five-year civil war.
And according to specialists on this region, the current, 2-month-old round of fighting here is fueled partly by a rush for new wealth: oil.
A vast swath of eastern Congo near Lake Albert on the Ugandan border could hold petroleum reserves of up to a billion barrels, according to Canadian-based Heritage Oil and Gas, the only company with significant investments and exploration contracts in the region.
Since Heritage signed a deal last year with the Congolese government to explore a Maryland-sized swath of this region - and since it found oil in a test well across the border in Uganda - the prospect of new wealth has increased tensions in the region, according to a report last month by the Brussels-based International Crisis Group, an independent research and advocacy organization.
"Although it remains highly uncertain that the exploitation and transportation of Lake Albert's oil will ever be profitable, contracts have been signed between Ugandan officers and Congolese politicians, and fighting has spread to the incriminated area leading to the displacement of thousands of civilians," the report said.
The confluence here of oil and war suggests that this northeastern region of Congo, Ituri province, may risk becoming the latest African region where underground wealth has brought misery and violence to those living above. Corruption and civil warfare over oil fields in Nigeria and Angola have left residents worse off than before oil was discovered. After decades of oil production that has paid Nigeria more than $300 billion in revenues, most Nigerians struggle to survive on less than a dollar a day.
Heritage is working closely with the Ugandan and Congolese governments, which hope for petro-dollars to revive their moribund economies. It signed contracts with those governments, which appear to have buried their enmity from past years of Congo's war. And, Heritage made deals with two rebel groups in Ituri that are backed by Uganda.
But political observers of the region say the Heritage deals left the government of neighboring Rwanda out in the cold. Heritage's project has been thrown into doubt because much of the zone to be explored has been snatched by a Rwandan-backed militia, the Union of Congolese Patriots.
The group, formed of ethnic Hema, controlled Bunia - the capital of Ituri province and a gateway to its mineral riches - until being forced out of the city last month by French troops.
Still, the Hema militia will have a strong say in any deal that could bring peace to the area and permit oil exploration. In a recent interview, the group's leader Thomas Lubanga waved away any suggestion that it is fighting to benefit from oil.
"They talk about that in Kampala [Uganda's capital], but we are not worried about that," Lubanga said. "We are fighting to bring peace to the region."
Since May 7, the fighting around Bunia between the Hema and their ethnic rivals, the Lendu, has killed more than 430 people, mostly civilians.
The chaos has come to symbolize the lawlessness and human suffering in the Democratic Republic of the Congo, formerly Zaire. The United Nations Security Council last month sent 1,400 French-led peacekeepers to stabilize the crisis.
In the past five years, conflict in Ituri has claimed more than 50,000 lives, according to Human Rights Watch. In the entire eastern Congo, home to about 20 million of Congo's 52 million people, 3.5 million have died due to malnutrition, disease and violence in the five years of conflict, according to the International Rescue Committee.
Heritage has a history of operating in African conflict zones. Its founder and majority owner is Tony Buckingham, a former British military officer with links to a South African mercenary outfit - or "private military company" - known as Executive Outcomes. The company has provided security for other oil and mineral extraction sites, including those of Heritage, in Angola and Sierra Leone.
"When Heritage signed a deal with [Congo's President Joseph] Kabila last year to explore for oil, a lot of people said, 'Uh-oh, we know where the next war is going to be,'" said Dominic Johnson, a researcher for the Congo-based Pole Institute, a think tank specializing in the Great Lakes region of central Africa.
It may be years before the first drop of oil is extracted, but everyone in the region is "whispering about it," Johnson said.
"It's a matter of perception, and the warring factions say it's a factor in the war, or at least they accuse their enemies of fighting for oil," said Johnson, who recently published a 31-page study on the region's petroleum prospects.
According to the Washington-based Center for Public Integrity, Buckingham engineered a deal in the early 1990s with the Angolan government to use South African mercenaries to protect oil installations from the UNITA rebel group. During the Cold War, the South Africans had fought against the Angolan government alongside UNITA, the National Union for the Total Independence of Angola.
Heritage executives have disavowed any link to Executive Outcomes but note that they are among the few oil companies willing to do business in high-risk areas. Michael Wood, Heritage's chief executive, was traveling and could not be reached for comment.
A Wealth Of Misery
The development of natural resources has not always brought prosperity to sub-Saharan Africa. In some nations, it has brought nothing short of mayhem.
1: Sierra Leone
Estimates say 2002 diamond exports exceeded $30 million. Rebels used profits from the mines to fund a 10-year civil war that ended in January 2002 with tens of thousands dead and 2 million displaced.
2: Liberia
Another diamond-rich nation torn apart by civil war. Eighty percent of population lives below poverty line. The Bush administration is considering sending U.S. troops there to keep peace.
3: Nigeria
Oil has netted $300 billion, but most of that has been squandered due to corruption and government instability. Most in general population live on less than $1 a day.
4: Rep. of the Congo
In the 1980s, rising oil revenues enabled government to finance large-scale development projects. However, economic progress was hurt badly in the 1990s by slumping oil prices and civil war. Conflict ended in 1997, but flare-ups linger.
5: Angola
Oil fields produce some 800,000 barrels daily with promise of greater production from new Cabinda development. Still, civil war has been the norm since independence from Portugal in 1975; death toll stands at more than 1.5 million.
6: Sudan
Began exporting crude oil from fields south of Khartoum in 1999, leading to first-ever trade surplus. However, civil war and chronic economic instability ensure that much of the population will remain at or below the poverty line for years.
THE NEXT FLASHPOINT?
DEMOCRATIC REPUBLIC OF THE CONGO
Hope lies in potential oil reserves near Uganda border. Estimates say deposits could total 1 billion barrels. However, since 1997 the DRC, formerly Zaire, has been overwhelmed by ethnic strife and civil war. Estimates say up to 3 million Congolese have been killed.
SOURCES: CIA World Factbook, International Petroleum Encyclopedia, www.globalsecurity.org
Copyright © 2003, Newsday, Inc.
