THE RASTAFARI COLLECTIVE--JULY 2004 ARCHIVES

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U.S. Energy Department official testifies to U.S. Senate

Mr. Chairman, and Members of the Subcommittee. I am pleased to be here today to discuss the important role of West Africa in U.S. and global energy security. The DOE fully supports the Subcommittee's undertaking of this series of hearings on energy security, begun last year, and we stand prepared to cooperate fully with you in efforts aimed at improving the security of our energy supplies.

I testified before this Subcommittee on the importance of Latin America and Africa to U.S. and global energy security in October 2003, and the points I raised in that earlier testimony still stand. My remarks today can be viewed as a follow-up and an update to that earlier testimony, with a specific focus on Africa and, in particular, West Africa. For our purposes today, I have defined West Africa as the regional grouping of countries from Mauritania to Angola, and inwards to include Chad and the two Congos. This group includes six significant, current oil-producing countries (Nigeria, Angola, Gabon, Congo Brazzaville, Equatorial Guinea, Chad), other countries with smaller amounts of current production (Cameroon, Ghana, Cote d'Ivoire, Congo Kinshasa), a number of frontier oil provinces that may become "hot" exploration areas during the coming decade (Mauritania, Senegal, Sierra Leone, and Sao Tome and Principe), and others that are currently, or soon hope to be, exploring for oil and gas (The Gambia, Liberia, Togo, Benin, and Niger).

U.S. Enemy Policy and Enemy Security

From an energy security point of view, U.S. Government energy policy has a role to play in assuring that our energy supplies represent a diverse set of energy resources from a diverse set of energy suppliers. President Bush's National Energy Plan, issued in May 2001, embodies these fundamental principles and recommends actions that will help achieve these objectives. The Plan also recognizes that the United States cannot address its energy concerns alone, that our energy security is intricately linked to international markets as a result of our increasing dependence on external sources of supply.

In recognizing these challenges, the National Energy Plan calls for strengthening global alliances through such important mechanisms as our existing bilateral relationships with key countries and regions around the world, and through our participation in multilateral international energy organizations. The National Energy Plan specifically noted the importance of Africa to U.S. energy security and to global energy production, and it provided specific recommendations for strengthening our engagement, promoting favorable investment climates, and encouraging transparency, good governance and the responsible use of natural resource revenues to support sustainable social and economic development in Africa.

In my earlier testimony, I noted that our policy of diversifying supplies relies on commercial investment in energy projects. As I stated before this subcommittee last year, we don't tell our companies where to invest or where to buy oil and gas. It is up to them to weigh all the factors involved and to make their own decisions. I also noted that there are a considerable number of obstacles to realizing successful development of commercial trade and investment flows, directly related to economic, political, and security risks. I noted that many new sources of supply are more dispersed geographically, are often located in undeveloped and conflicted regions, and they often carry very high recovery, transportation and infrastructure costs.

I also outlined new risks from non-traditional, and often internal sources of conflict such as corruption, the lack of "rule of law", political instability, ethnic and religious conflicts and other so-called governance issues. I stated that the capability of energy companies and financial institutions to handle these risks, in order to allow energy development projects to become economically viable, is itself a potential source of worry for our energy security.

I noted that I was less concerned about the technical capabilities of the companies, but more concerned about the impact that an unfavorable business climate can have on the resource development process. Continued investment will depend on political and economic stability, on the existence of transparent regulatory regimes, and on a continuation of competitive fiscal terms capable of attracting international capital, and nowhere is this truer than in Africa. An unfavorable business climate may keep needed resources locked away from development for a long time. I concluded my earlier testimony by indicating a need to remain engaged on sustainable development issues with Africa producers in order to minimize many of these new internal threats to stability, and to promote, protect and defend our security of supply, and our own security in commercial energy trade and development relationships.

While these points are still valid, my testimony today will focus more on the role of West Africa in global energy markets, and on the prospects for continued development of oil and gas in the region. My colleague from the Department of State will talk about many of the policies and programs we have under way in West Africa to promote transparency, stability, and good governance.

The Importance of Africa

Africa as a whole is currently producing nearly nine million barrels of oil per day, with approximately 4.7 million barrels per day coming from West Africa. African oil production currently accounts for approximately 11 percent of the world's oil supply. Africa currently supplies approximately 18 percent of U.S. net oil imports, and both Nigeria and Angola are currently among the top 10 suppliers of oil to the United States. U.S. dependence on oil from Africa is expected to rise in the future as new fields are brought on line.

Estimates of Africa's proven oil reserves vary considerably from source to source, but most sources indicate that Africa's proven oil reserves are in the range of approximately 7 to 9 percent of the world's total, or 80 to 100 billion barrels. Estimates of Africa's undiscovered oil resources, and of its undiscovered, producible reserves vary even more widely, but most estimates support the expectation that Africa as a whole, and West Africa in particular, have a reserve base that is capable of supporting increased oil production for years to come.

Several recent studies undertaken by the USDOE and others conclude that sizable but untested resource potential exists in many African and West African countries. With continuation of deep water and ultra deep water discoveries, with optimization of overall resource development and production, and with sufficient levels of investment in exploration and development and in maintaining production from mature fields, African oil production could rise by 4-6 mmbd in the next 10 to 15 years.

In these scenarios, West Africa's 5 key producing countries (Nigeria, Angola, Gabon, Republic of Congo-B, and Equatorial Guinea) could see their combined production rise by 2 to 3 million barrels per day in the next 5 to 10 years, and by 3 to 5 million barrels per day in the next 10 to 15 years. West Africa's frontier oil countries, such as Senegal, Sierra Leone, and Sao Tome and Principe in the Joint Development Zone, and other countries, could also become "hot" exploration areas in the next decade. While their potential is very promising, it is too early to determine with any certainty what the timing and magnitude of future production from these countries is likely to be.

While under almost any scenario, Africa will become an increasingly important supplier to the world's energy markets in the next decade, continued success will greatly depend on the continued favorableness of deep water geology and continued investment. Continued investment will depend on political and economic stability, on the existence of transparent regulatory regimes, and on a continuation of competitive fiscal terms capable of attracting international capital.' As natural gas becomes monetized in Africa and in West Africa, it can also play a larger role in economic development. Africa currently holds approximately 8 percent of the world's proven reserves of natural gas, and is responsible for a little over 5 percent of world gas production (note: this figure does not include gas flared or re-injected). Many countries in Africa and in West Africa have significant untapped production and export potential, and with world gas demand rising, many international companies are rapidly expanding their investments in African gas development projects.

The US Department of Energy (USDOE) is working with various African countries and international organizations in Africa to promote the development and utilization of natural gas resources, which, in turn, will directly contribute to the reduction of gas flaring and venting, increase revenues to the state, and help provide efficient, reliable energy for sustainable development.

Development of natural gas is well under way in several countries, but many countries are still struggling with the basic principles of gas commercialization and its economic and regulatory links to the power and other sectors for domestic consumption.

West Africa is also a part of the Atlantic Basin, and relatively close to the main markets in the U.S. West Africa is also the source of light, sweet crude oil critical for U.S. refining needs, and a key replacement for declining North Sea oil production.

The US consumes more than 24 trillion cubic feet of natural gas per year. Our dependence on natural gas and imported LNG is expected to rise, and much of that could come from West Africa.

Given its reserve base, it is unlikely that Africa or West Africa will ever take the place of the Middle East in its importance to the world's oil and gas markets, but it will nevertheless continue to be an important source of additional supplies to the U.S. and world market. We have learned from experience that the additional or marginal barrels can have a significant impact on developments in the marketplace, and West Africa has the potential to be an important source of the marginal barrels for years to come.

West Africa is one of the world's fastest-growing sources of oil and gas and is now the location of significant new investments by many of the U.S. and international major oil companies. The following brief synopsis of recent developments by country is indicative of the activity under way.

Chad began producing oil for the first time in July 2003, and is currently producing 110,000 barrels per day (bpd). The U.S. is now receiving approximately 34,000 bpd of oil from Chad that did not exist a little over a year ago. The realization of oil production in Chad was made possible by the construction of the $3.7 billion, 650-mile Chad-Cameroon oil pipeline project, led by ExxonMobil.

Nigeria, an OPEC member, has proven oil reserves of nearly 40 billion barrels, and currently produces approximately 2.5 million barrels per day. Nigeria's goal is to raise its production capacity to 4 million barrels of oil per day by 2010. Nigeria has also emerged as a major exporter of liquefied natural gas (LNG) in recent years (it is now the second largest LNG exporter on the African continent and the fifth largest in the world), and it has the world's 9th largest reserves of natural gas and the largest reserves in sub-Sahara Africa.

Angola, a non-OPEC member, is the second largest Sub-Saharan oil exporter to the U.S., currently producing 1.07 million barrels per day. Angola's total proven oil resources are estimated to be between 5 and 9 billion barrels, and rising with new discoveries. Angola's stated goal is to increase oil production to 2 million barrels per day by 2008. Angola is also planning the development of an LNG project for export.

On May 13, at the Angolan Embassy in Washington, Sonangol (Angolan national oil company), ChevronTexaco (lead), Total and ENI signed an extension agreement to further the development of one of Angola's most prolific offshore oil production areas, Block 0. This agreement has been negotiated in an open and transparent manner and includes disclosure terms for the signing bonus. The disclosure terms for the signing bonus represent significant progress for transparency and meaningful reform in revenue oversight and will engender greater goodwill in the international community.

Equatorial Guinea's oil production is currently about 360,000 barrels per day. It is a non-OPEC producer and has total proven oil reserves conservatively estimated at 1.2 billion barrels. Major oil companies operating in Equatorial Guinea are Marathon Oil, ExxonMobil, AmeradaHess, and ChevronTexaco. The U.S. reopened its Embassy in Equatorial Guinea in October 2003. President Obiang recently visited the U.S. and met with Secretary Abraham at the Department to discuss bilateral energy issues. Equatorial Guinea also has considerable natural gas potential and is planning the development of an LNG project for export.

Gabon is West Africa's fourth largest oil producer, currently producing about 250,000 barrels per day. While Gabon's oil production has decreased somewhat in recent years, it has recently taken steps to improve the investment climate and attract more interest. It also recently settled a territorial dispute with Equatorial Guinea that will allow exploration and development to proceed in previously disputed offshore area.

Republic of Congo (Brazzaville) is currently producing about 243,000 barrels per day. The majority of its crude oil production is located offshore, and is considered to have significant potential.

Sao Tome and Principe - Since the attempted coup of one year ago in Sao Tome and Principe, there has been a reconciliation process under way which thus far has remained peaceful. As part of this process, there has been a series of public town hall style meetings to allow a wide range of Sao Tomean society to debate national direction and the priorities for future oil revenues. Commitments have been made by the Governments of Sao Tome and Principe and Nigeria to ensure openness and transparency in the bidding process on oil blocks in the offshore Joint Development Zone (JDZ) shared by the two countries. On June 26, 2004, President de Menezes of Sao Tome and President Obasanjo of Nigeria signed the Abuja Declaration which states that oil payments made by companies to the Joint Development Authority (JDA) will be made public quarterly and annually by the JDA and that use of JDZ funds received by the two governments will be monitored and audited, with the audits made public.

Closing

Mr. Chairman, that completes my overview of West African oil and gas developments, and I believe that my statement covers all the topics you have proposed for today's hearing. Thank you for the opportunity to testify before you today. I welcome any questions that the committee might have.

Statement before the Subcommittee on International Economic Policy, Export and Trade by John Brodman, Deputy Assistant Secretary for International Energy Policy, Office of Policy and International Affairs, U.S. Department of Energy

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AMNESTY INTERNATIONAL
PRESS RELEASE

AI Index: AMR 35/004/2004 (Public)
News Service No: 162
25 June 2004

The murder of George Bacchus, a self-confessed death squad "informant", two days before he was due to testify in related criminal proceedings
demonstrates once again the urgent need for a comprehensive protection scheme in Guyana, Amnesty International said today.

"Since allegations of the existence of a death squad in Guyana surfaced six months' ago, Amnesty International has repeatedly urged the Guyanese authorities to take action to protect individuals involved in investigations regarding murder, "disappearance" or other crimes."

George Bacchus had been due to testify this week at the preliminary inquiry of two police officers charged with the murder of his brother, Shafeek, on 5 January. Bacchus claimed that he had been the intended victim and that members of the death squad were responsible. Gunmen reportedly burst into Bacchus' home early Thursday morning and shot him dead.

On Wednesday, the Chief Magistrate heading the preliminary inquiry quit, citing reports that she was on a death squad "hit list".

"The Guyanese authorities are under a legal obligation to take proactive measures to investigate these latest incidents thoroughly and impartially, along with other credible allegations that a death squad has murdered, "disappeared" and tortured numerous individuals since 2002. Anyone found responsible must be brought to justice."

"In light of reports alleging the involvement of members of the security forces, neither the Guyana Police Force nor the Ministry of National Security should be linked to related investigations or witness protection efforts. The authorities must protect victims' relatives, witnesses, members of the judiciary, lawyers, journalists, police officers and human rights defenders against all forms of intimidation," Amnesty International concluded.

Background Information
In January 2004, George Bacchus made public allegations about the existence of a death squad or squads with members including existing and former police officers. On 7 May, the Minister of Home Affairs announced that he would vacate his office to allow an inquiry to proceed after Bacchus alleged the Minister's involvement in the squad. On 15 May the President of Guyana announced an inquiry, pursuant to the Commissions of Inquiry Act 1933. The inquiry has not yet commenced. Another man charged with the murder of Shafeek Bacchus died in custody on 1 February.

Public Document
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For more information please call Amnesty International's press office in London, UK, on +44 20 7413 5566
Amnesty International, 1 Easton St., London WC1X 0DW. web: http://www.amnesty.org

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A Crisis of Low Self-Esteem in Brazil

Brazilians have the lowest self-esteem in Latin America. Only 22
percent of Brazilians say that they trust their countrymen.
Compare this to Uruguay in which the trust is 64 percent,
Colombia (55 percent) and Chile (52 percent). In Brazil, most
people also tend to overvalue everything that's made overseas.

Carolina Pimentel

President Luiz In�cio Lula da Silva, on July 19, inaugurated a campaign with the theme, "The best thing Brazil has is Brazilians." The campaign is being sponsored by the ABA (Associa��o Brasileira de Anunciantes�Brazilian Advertisers Council) with the idea of improving the population's self-esteem, which has been somewhat sluggish.

The ABA reports that a 2002 survey by the Sebrae (Servi�o de Apoio �s Micro e Pequenas Empresas�Small Business Administration) found that the main problems Brazilians have are low self-esteem, coupled with a tendency to overvalue foreign-made goods.

The ABA also used data from a survey by Latino Bar�metro, a Chilean public opinion institute, that found that Brazilians have the lowest self-esteem in Latin America, with only 22 percent of those interviewed saying they trusted their countrymen (in Uruguay, Colombia and Chile, the numbers were 64 percent, 55 percent and 52 percent, respectively).

In order to give Brazilian self-esteem a boost, the ABA is counting on an emotional publicity campaign showing people who overcame obstacles. They will be famous people and unknowns and their stories will appear on radio, TV, and in newspapers and magazines.

The campaign is to be entirely a public service operation based on voluntary efforts. Brazil's main media groups have already promised to cooperate. The ABA expects the private sector and government agencies to also join in extolling Brazilian talent, capabilities and accomplishments.

Fear of unemployment remains high among Brazilians. Three months ago a CNI/Ibope poll found that 54 percent of those interviewed thought unemployment would rise. The latest survey at the end of June has found that 55 percent now think there will be fewer jobs.

However, a breakdown of the survey shows that among those with higher levels of education and income there is more optimism than three months ago. The opposite is true among those with lower education levels and income: they are more pessimistic.

"The view from the bottom of the social pyramid is worse, at least regarding jobs," explains Amauri Teixeira, a marketing specialist who analyzed the

With optimism, but also caution, was the way President Luiz In�cio Lula da Silva described how he felt about the news of record industrial output in May. Production was up 2.2 percent, the highest since September 2003.

Speaking to the nation during his fortnightly radio talk, "Breakfast with the President," Lula explained that the reason for caution was because his government wanted "long-term, sustainable growth," not just a good month.

"That is why we have to be cautious. That is why we are working patiently. That is why we ask the people to pay attention to what is happening in Brazil," said Lula, adding that the measures his administration was implementing to ensure sustainable growth could have been put in place a long time ago.

The President pointed to more financing for agriculture, especially family farming, and easier credit access for workers. "Banks are making these loans at low interest rates, microfinancing is expanding, the BNDES (Banco Nacional de Desenvolvimento Econ�mico e Social�Brazilian Development Bank) has a lot of money for corporations that want to invest in projects that create growth, jobs and income distribution," the President declared.

Carolina Pimentel works for Ag�ncia Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.

Translated from the Portuguese by Allen Bennett.

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Japan suffers first blow at opening of whaling meet

SORRENTO, Italy (AP) Japan lost a bid to have votes held at this week's International Whaling Commission by secret ballot the first blow to a country that is trying to have a 1986 ban on commercial whaling overturned.

Japan's proposal was rejected 29-24 Monday in the first decision taken by the IWC gathering in this sea resort in southern Italy. Environmentalists applauded the decision, saying it ensured transparency within the organization.

The meeting opened amid long-standing accusations that Japan, the leading prowhaling country, is using development aid to buy the votes of smaller nations in its campaign against the commercial whaling ban.

"Some of the poorest developing countries in the world are being used to vote in favor of whaling," said John Frizell of Greenpeace International. "This is a clear case of 'money talks' and it's happening in front of us.

The prowhaling bloc has grown steadily over the past years. The WWF said the bloc has gone from nine in 2000 to 21 in 2003, and forecast this year it would total 27.

Greenpeace lists Suriname, Tuvalu, Mauritania and Ivory Coast as recent additions to the prowhaling bloc, while the WWF singles out Mongolia a country that does not even have a coastline.

Japan denied the accusation, claiming in a statement that it has "fisheries relationships" with many nations.

"When we have a chance to discuss the IWC situation with those nations, they are often more prepared to understand our position," a delegation statement said.

Attention at the gathering was focused once again on the 1986 ban on commercial whaling. However, with a 75 percent majority required to overturn the moratorium, Japan and other prowhaling countries are not optimistic.

"The antiwhaling nations simply don't want to lift the moratorium, and as they have enough votes to block any lifting, the ban will stay in place," said the High North Alliance, which gathers hunters from Canada, Iceland, Norway and other countries.

The High North Alliance claims there is enough scientific evidence that several whale stocks can be hunted in a sustainable way, including minke whales, the smallest of the baleen whales, at about 9 meters.

Japan and other countries reckon whales are overeating fish and that controlled killing of marine mammals would help the fishing industry.

"Many of the whale stocks around Japan are increasing and consuming huge quantities of at least 10 species of fish that are caught by our fishermen," Japan's opening remarks state.

But a report presented at the opening of the talks Monday counters that argument.

The report says most food consumed by marine mammals isn't what fisheries target. Further, according to the report, whales consume most of their food in areas where commercial vessels do not fish.

"What whales consume is largely stuff that we do not catch in areas where we do not fish," said Daniel Pauly, a professor at the Fisheries Center, University of British Columbia in Vancouver and one of the experts who wrote the report.

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20 July 2004 � Worldwide support for Africa's economic development will be strengthened by a recently-appointed United Nations panel of economists, development experts, former government ministers and academics, the Secretary-General's Special Adviser on Africa said today.

Briefing journalists in New York, Ibrahim Gambari said the 13-member panel, which will report to Secretary-General Kofi Annan, will assess existing forms of international support, encourage that support to be increased and recommend new models for pursuing development goals for the world's most impoverished continent.

Mr. Annan announced the formation of the panel, which has been created to help achieve the New Partnership for Africa's Development (NEPAD), during a speech two weeks ago to the African Union (AU) summit in Addis Ababa.

First adopted by African leaders in 2001 and endorsed by the General Assembly the following year, NEPAD is a comprehensive programme for Africa's economic, social and political advancement based on the determination of Africans to extricate the continent from the malaise of underdevelopment and exclusion in a globalizing world.

Mr. Gambari said the panel's first task will be to assess the quantity and quality of the development partnerships so far. Referring to the many promises of support in the past, he said the panel should ask: "How far has this translated into reality?"

The panel has been set up as Mr. Gambari has handed down reports charting progress made in three key areas of NEPAD - improving capital flows to Africa, integrating NEPAD priorities into national development strategies and building so-called South-South cooperation on African development.

Capital links will only improve if African governments do more to attract investment, through measures such as tax incentives, and if industrialized countries reduce their farm subsidies, according to the reports.

The reports also recommended African nations increase their links to Latin American and Caribbean countries in agriculture, health and education, telecommunications, peace, security and other areas.

The panel will be headed by Chief Emeka Anyaoku, the former Nigerian Foreign Minister and Commonwealth Secretary-General. Other panellists include Michel Camdessus, the former Managing Director of the International Monetary Fund (IMF); Richard Jolly, the former Deputy Director of the UN Children's Fund (UNICEF); Anne Kristin-Syndes, former Norwegian Cooperation and Development Minister; and the noted economist Jagdish Bhagwati.

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Authorities in Shanghai are updating rules on religious worship, reportedly focusing on controlling Internet use by the faithful and coping with a growing number of foreign churchgoers.

The new rules are to be issued in October, said an official of the city's Minority and Religious Affairs Administration.

"They will both delete outdated items and add new items to suit the changing social environment," said the official, who would give only his surname, Jiang.

Authorities are looking for ways to monitor Internet use by religious groups -- an issue not covered by current rules, the Hong Kong newspaper South China Morning Post said, citing unidentified sources.

The amended rules also call for creating a ``watchdog'' to monitor foreign worshippers and for groups of foreign followers and clergy members to ``coordinate'' with the government and state-monitored churches, the Post said.

China's officially atheist government allows worship only in state-sanctioned churches.

Chinese citizens are not usually allowed to attend services for foreign residents.

The regulations give no reason for this, though authoritarian China often segregates different groups in order to help control them.

Foreigners in Shanghai can take part in officially allowed religious activities but are prohibited from setting up their own religious groups or proselytizing.

City officials are issuing the rules because they felt an urgent need to "keep up with change," according to the Post.

The revised rules recommend setting up additional locations for foreign-language services and increasing the number of languages used, the report said.

Foreign-language services now are conducted in English and Korean. Shanghai has as many as 60,000 foreign residents.

Many of them come from Germany, France and other countries where languages other than English are spoken.

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A Crisis of Low Self-Esteem in Brazil

Carolina Pimentel

Carolina Pimentel works for Ag�ncia Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.

Translated from the Portuguese by Allen Bennett.

Black farmers were denied payouts, group says