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Small African Country To "Seize" Chinese Oil Exploration Assets
It's one thing for broke Argentina to nationalize assets of just as broke Spain. However when tiny west-African country Gabon decides to "seize" assets from three international oil companies including China's petrochemical giant Sinopec, things not only get interesting, but puts a brand new pawn on the global geopolitical chessboard. But why is Gabon seeking to antagonize some of the primary participants in its crude extraction supply chain? Simple: leverage, or its own perception thereof. As the FT reports, this surprising move comes as Gabon prepares to "launch a licensing round for the deep waters off its coast. Experts say reserves in the Gabon Basin could rival deep offshore discoveries in Brazil."
So what happens next? The same as when every banana republic reverts to its banana republic stats - corporate partners are alienated, a rogue oligarchic regime proceeds to spend whatever money it has managed to steal in recent years, the government is destabilized, a military coup follows, currency devaluation, hyperinflation, economic collapse, until one oligarch is replaced with another (future) who attempts to restore relations with the same corporations that are being nationalized today.
Tensions between the industry and Gabon’s oil ministry come as a number of African countries attempt to wrest better terms from foreign multinationals and clamp down on transfer pricing and tax evasion.
Etienne Ngoubou, oil minister, told the Financial Times the government plans to reclaim the main onshore site of China’s Addax Petroleum, the Tsiengui field, when the contract comes up for renewal in 2015, due to alleged breaches of contract.
Mr Ngoubou said the state had informed two other oil companies they faced similar action. “There will be a partial reclamation of assets,” he said. “The companies have realised we have proof of irregularities. [They] have recognised their fault.” The minister refused to identify the oil companies. It is understood that neither Total Gabon nor Shell Gabon are being targeted.
The expropriated companies are understandably unhappy:
Relations between the oil industry and ministry have deteriorated sharply. Companies complain they have been forced to negotiate on licences without a new hydrocarbon code which will set investment terms. They also complain that new conditions are imposed as contracts are renewed.
There are also suspicions that the ministry’s tougher approach is motivated by a desire to reallocate producing assets to GOC, which wants to take stakes in existing and new fields. Mr Ngoubou denies this.
Many investors have also been angered by government demands for repayment of historical shortfalls in customs or tax payments, some of which date back several years. “The demands are unreasonable and unfounded,” said one executive.
In the meantime the local (transitory) government is adamant:
Gabonese ministers reject suggestions that they are putting foreign investment in the country at risk. Luc Oyoubi, Gabon’s economy minister said there was a fine line to tread between ensuring revenues to the state were maximized and encouraging fresh investment.
“The fact is there is a dilemma between the necessity of doing objective and thorough controls and the need to provide incentives for new investors. We try to have both things in mind. So the tax authorities are doing their work, we are watching what they do.”
All of this is to be expected: the offshore megacorps were well aware of the risks they took on when investing in the resources of a country such as Gabon (just ask the gold and silver miners). What is unknown, however, is how China which currently views Africa as its territorial fiefdom will respond. Since the US considers west Africa its own military protectorate (see recent drone base plans in Niger) any escalation of energy-related tensions from Beijing will hardly be smiled upon by John Kerry.
Which may be long-overdue. By now everyone is sick and tired with the great proxy wars taking place the middle east - it is about time the tape started carrying some more exciting developments out of Africa. Preferably weaponized: after all, with convential credit-creation channels clogged up beyond repair, global GDP desperately needs a source of Keynesian "growth"...
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Smart move. Now lets talk licensing fees, contract terms and moneeeey!
Energy Laws and Accounting Practices are just as important- if you think the US taxman gets screwed out of corporate income taxes you haven't seen what these guys will do to keep that money all for themselves (and the guys they buy off).
Seize the day!
So what happens next? The same as when every banana republic reverts to its banana republic stats - corporate partners are alienated, a rogue oligarchic regime proceeds to spend whatever money it has managed to steal in recent years, the government is destabilized, a military coup follows, currency devaluation, hyperinflation, economic collapse, until one oligarch is replaced with another (future) who attempts to restore relations with the same corporations that are being nationalized today.
And the difference is...
American boots on the ground to help save poor little Gabon
Well that throws a monkey wrench in it.
Time to queue up the "they're killing their own people" propaganda loop.
See, its just like when you eradicate coca fields. You don't eradicate ALL the fields, just the competition.
Sounds like the big money from Shell or BP etc whispered in a Gabonese minister's ear...
I predict proxy wars rather than direct hot war between US and the upstart world power(s). So I guess we are in the phase of the game where you try to get as many countries in your sphere of influence, and you try to arm them to the teeth? Too bad the US is broke.
Do you think that Boeing, Lockheed, Northrup Grumman, Halliburton, Blackwater will extend credit to Gabon and other newfound US allies?
Exactly
as if the west didnt have the means to eradicate almost completely coca and oher drugs fields. We have drones, sattelite, intel...but we only pretend to eradicate some while knowingly leaving others safe. Because our own elites are snorting the shit back home. Humans are despicable. And soldiers, all soldeirs, are soldiers of fortune paid by megacorporations who truly lead politicians. This is "real life".
I believe CNQ has a platform off the coast of Gabon.
Posts like this prove that ZH is number 1.
Storm in a tea cup?
It's a dance. The parties have until 2015. I've had Ministers try to take a friend's concession while at the very same time seeking that exact same friend's help in finding expansion financing for a completely unrelated project (that he wasn't even involved in). Welcome to Africa.
And since the Chinese are indirectly involved (Addax is a recent acquisition of an older company long specializing in Africa, and Addax's Operations are only a SMALL percentage of China's overall investment in Gabon), this isn't even necessarily primarily an oil issue.
#1 aggregator of FT?
gabon - possibly the biggest country on earth that i've never heard of
I thought it was some French dish..., like pidgeon or something...
It's an "ex" French dish... hence their penchant for behaving badly.
China eventually will learn that it's hard to be a superpower.
http://dareconomics.wordpress.com/2013/06/04/around-the-globe-06-04-2013/
China will learn that not every country's people will fall in line for morning physical fitness sessons, live in company dorms, and work until suicide is preferable.
-30-
Couldn't happen to a nicer bunch of Communists,
except perhaps the thugs of North Korea.
It's easier to be a Communist Superpower than a Democratic Superpower.
You can send malcontents and protesters off to (slave) labour camps or murder them outright.
Something is happening on the Hill. Washington DC. Capitol area.
http://instagram.com/p/aMc0kNEbih/#
http://twitpic.com/cvhbnk
http://instagram.com/p/aMdEh3Ezhd/
Ya, a house caught on fire. It happens in Des Moines, too.
Relax, it´s just choomgang commander in chief enjoying a nice big spliff.
Either the false-flag we've all been waiting for, or a garden variety structure fire.
There's a democratic superpower out there right now somewheres in the wild? Inquiring minds would like to know the name of this mysterious place.
There is.
It's all of us.
+1 for your new avatar CPL!
It's a Totalitarian Democracy, and you, I, and avery other American is subject to its whims.
Full Spectrum Dominance, byatchz
Who is a democratic superpower?
I bet that Gabon is now the new home and HQ for al Qaeda, the reincarnation of Bin Laden and Emo music.
The drones are probably already on the way to take out Gabonese wedding parties, schools and other gatherings of the poor mundanes.
NBC News
The CIA did not always know who it was targeting and killing in drone strikes in Pakistan over a 14-month period, an NBC News review of classified intelligence reports shows.
About one of every four of those killed by drones in Pakistan between Sept. 3, 2010, and Oct. 30, 2011, were classified as "other militants,” the documents detail. The “other militants” label was used when the CIA could not determine the affiliation of those killed, prompting questions about how the agency could conclude they were a threat to U.S. national security.
http://openchannel.nbcnews.com/_news/2013/06/05/18781930-exclusive-cia-didnt-always-know-who-it-was-killing-in-drone-strikes-classified-documents-show
Exclusive? Signature strikes have been known for over a year, one of Obama's 'signature' achievements. It's amazing if the major news sources are just getting around to it now, especially convenient after Obama has claimed his admin is going to scale them back.
Good info, but still nothing compared to the CIA drone strike in 2006 on a Pakistani school during school hours so as to get the headmaster.
They killed over 80 including 69 kids.
They hate us for our freedoms and way of life?! Right!!!
http://tribune.com.pk/story/229844/the-day-69-children-died/
Couldn't they have just targeted the teachers lounge? What do you mean they don't have teachers unions in Pakistan? Well, no wonder we are droning them.
Go for it! China doesn't tolerate being embarrassed by a nothing country like Gabon.
China has to make this an example.
This should get rather interesting. It could trigger more.
China is purely and simply a regional power.
USA and Russia are world powers since they have the military capability to be at any corner of the world, but China doesn't.
So, China can do nothing to Gabon, absolutely nothing.
Power is relative and I doubt the government of Gabon is that powerful either. I believe it was a Canadian oil outfit that when confronted with this kind of behavior hired an army of mercenaries and got a new government installed. I don't know that China ( or any other oil company ) would either have the balls or be willing to spend a few tens of millions of dollars for that kind of operation today but I also don't know they they wouldn't.
Gabon would not dare do such a thing without US backing.
US/France are behind. By now all those ministers and the president have guaranteed secret accounts in switzerland.
That's the way it has always worked.
You forgot to put the broad meaningless generalization in bold font.
It was Equatorial Guinea with British Simon Mann 2004ish? Working for Mark Thatcher (Maggie'sboy)... Airplane, mercenaries, tarmac, surrounded by army type of thing. google it
Yup
a couple of peking honeys drop a little something something into the oil ministers drink and gabon will get the message loud and clear. aircraft carriers not required
its called smart power
First you get a Navy.....
"reserves in the Gabon Basin could rival deep offshore discoveries in Brazil."
And here I thought we were running out of oil.
lol.
Nope. We're only running out of "easy oil".
What's left costs a lot more to extract and refine.
The reserves statement is remarkably content free and given how much oil has been developed in the deep off shore of Brazil it may not be what it is cracked up to be....
Well, taken together, Cameroon & Guinea put out as much as Brazil...throw in Nigeria from the same neighborhood and it dwarfs Kuwait...importing to the US anyways.
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm
But it all gets down to Flow Rate doesn't it Flak?
Yep...
but a big mea culpa for letting them even be called Reserves, they are currently only resources, i.e. unexploited....
There are new fields of oil discoveries almost every month. Peak Oil my ass.
This argument was one of the main concerns of the people of Bulgaria when they went full riot. They are currently getting shafted by a gold mine operation leaving them just 1% of recovered gold and whole load of toxic waste. Yes, exploration/mining companies are sinking discovery costs, and of course, there had to be govenrment deals in the first place, but when did the people that live there get a say before this explotation commenced and how do they benefit?
http://investmentwatchblog.com/breaking-massive-riots-in-bulgaria-agains...
I doubt Bulgaria gets 1% of the gold. I bet they get a 1% smelter royalty. I don't know the finer details of the deal, but the gold mine is not nearly as rich as the website you linked to claims. Its a $700m revenue mine, not billion.
Disinfo fail - good catch, thanks.
Lol..the mouse that roared..part 2
Sounds like the people of Gabon need to be liberated. Their oil and gold is clearly keeping them from feeling the freedom that democracy brings to its people. Send in the drones.
PBoC is all over improved living standards in Africa Doc.
allAfrica.com: Zimbabwe: Myths Surrounding Chinese Investment Exposed (Page 1 of 2)
"The Chinese are exploiting Africa just like Europe has been doing for over 300 years."
Levelse enginelling
LUV ya Knuks.
Is exploiting the new word for bringing civilisation?
But I agree, let them eat dirt
...And the FACs, Doc...
China better walk softly,
Gabon got bones in their noses and poison darts and shit.
They have seen other African nations pump oceans of oil and none of the proceeds used for the nation. What money goes to Africans, only goes to the corrupt politicians who sign away all the wealth to corporate profits while the local politicians cash in huge kickbacks. They are learning, clever fellows!
Nah, jist "native cunning"
I'd bet a gold eagle that 99% of the Gabon population won't see 1% of that oil wealth. Africa is poor because it's corrupt not because it's exploited.
I work in Nigeria where a local told me that you could give all of Europe to Africans and send all Europeans to Africa and within 20 years the Africans would be complaining that they got screwed.
And they would have been - I'll take Africa anyday if the continent was uninhabited (and thereby free of tribalism, warfare and corruption). It has vast mineral resources, huge areas of land, the kind of sun that generates enormous amounts of Solar electricity, oil, sea access nearly all round.
It only amazes me how the Africans have never got their political house in order and turned their continent into the biggest success story on the planet.
The only 'amazing' part is how you don't realize that anyone with brains and balls in Africa was either bought off or killed outright if they wouldn't take the money--Leadership cadre in Afica is a death sentence if you don't agree with the colonialists' terms.
"reserves in the Gabon Basin could rival deep offshore discoveries in Brazil."
Yeah well... the thing about oil fields in Brazil offshore... they are the deepest oil fields ever exploited... way deeper than the Deepwater Horizon fields (deepwater 1.2km water deep... Brazil libra field 2km water deep... that you all know... they had lots and lots of problems closing it when the shit hit the fan... what happens if the oil fields in Brazil have a problem like the Deepwater Horizon?? The South American coast is fucked, that's what.
In Gabon, to drill those oil fields, they need BIG TECHNOLOGY and expertize!! Do you really think that those hacks in banana republic Gabon have the skills to do that?? Impossible... So fact is, they might nationalize the industry... but they'll have to hire people from BP, or whoever to do the work...
There's a reason Petrobras was brought in with a 50% stake for the deep-water pre-salt exploration. They're poor and they don't have a deep bench, but they aren't stupid, and this isn't by any means over...
So the spam mail offering me 30% of a $28,000,000 fortune because I was referred by a friend will now come from Gabon and not Nigeria.
My friend from Nigeria said its only a matter of a few weeks before I receive my 30%. Best $1500 I ever invested!
Chinese boots on the ground, bitchez.
Some of you might recall my linking here to this series of thought experiments last year from Michael Greer:
http://thearchdruidreport.blogspot.com/2012/10/how-it-could-happen-part-...
http://thearchdruidreport.blogspot.com/2012/10/how-it-could-happen-part-...
http://thearchdruidreport.blogspot.com/2012/10/how-it-could-happen-part-...
http://thearchdruidreport.blogspot.com/2012/10/how-it-could-happen-part-...
http://thearchdruidreport.blogspot.com/2012/10/how-it-could-happen-part-...
The series starts with the following fake news item:
"The news of the latest Tanzanian deepwater oil discovery broke on an otherwise sleepy Saturday in March."
And it ended, five chapters later, with this:
"By 118 to 32, the 28th amendment was ratified and the United States of America ceased to exist."
Getting from "we need to get that oil", to fighting the Chinese for it, to losing a war for oil, to the dissolution of the United States is a wild ride. But given the headline today I suggest everyone trot over to the ADR and give it a read. Damned fine writing and just about the most thought-provoking thing I've run across in a long time.
Yep... entertaining and a very possible end-game...
Read him Every Thursday at http://www.resilience.org/
Yes, It was a good series. Very good as a what if. I think he is one of the best 'writers' out today. We have to remember that REAL things can happen. Things can get out of hand quickly.
But Greer is great every week nearly. Very thought provoking usually.
When one of these little pissant countries pulls a Gulf of Mexico type BP disaster and doesn't have the resources to stop the spill or clean it up then it's all over. Get your beach fron property. Get it while its hot.
Look into Gabon hiring Academi via GS.
Then you've got a real story.
Well if China invades Gabon and occupies it, maybe it'll crash the Chinese economy. So... yes, go ahead. Time for radicals to hate the Chicoms and make war on them instead of us... share the load if you will.
Perfect excuse to expand the "One China" policy into Africa.
Gabon pulled the trigger too soon (or should I say, threw the spear).
Russia did it right. Gorbachev took down the old regime and dismantled the iron curtain. Yeltzin invited foreign capital with open arms and relaxed capital and resource extraction rules. Investors and looters rushed in en masse. Then Putin got in with the Western support, assuring everyone that he was just like the last guy, only half as drunk - that he wasn't going to rock the boat! A year later: slam! As soon as the west was done assembling their state of the art oil rigs and laying pipelines and wiring the backup generators, everything was nationalized! Firms were raided. Capitalists booted off the land empty-handed. Thanks for all the time and effort! A heist like that takes a good decade to execute.
Now Gabon gets a partial reassurance there might be profit and bam! They want it all right away! Let the silly foreigners build you your shacks and move in with briefcase full of money before you go booga-wooga!
Want the oil? Let me ask you a question then. How long can you hold breath under water?
Amateurs!
That's why if I was an international oil developer I'd pull a Francisco d'Anconia and hide explosives in all the rigs. Oh your going nationalize me BOOM.
Maybe but remember who Mikhail Khodorkorvsky was trying to turn over his energy businesses to. Jacob Rothchilds. Putin who was ex kgb didn't care for what 'those' people were doing to his motherland. I think he took it personally.
But the usual suspects were the group that were gaining more and more control over assets. But putin arrested him. ....
REALLY? 'Threw the Spear?" No one's 'thrown a spear' there since the first containers of deniable AK'S were airdropped in '58.
Get caught up.
Not too big a step to gold confiscation...
It would be great news if the people of Gabon would get any proceeds.
But sadly the elite will loot it all.
chinese will take over whole eurasia africa and australia in century from now anyway. They dont care about animals like muslims or black africans. They just pretend to care right now because the "benevolent" white man is still strong , but they always considered them as untermenschen. Chinese know the white man is killing himself not reproducing and getting replaced by muslims in eurasia. They know atheists dont reproduce, they know it s just a matter of time, and they re very, very patient. They re not dumb, they know the trends and where they lead; the white man is disapering getting replaced by sub races, its imigrants, and once the white man has completely disaperared they ll simply take over the whole planet with no remorse eradicating everything that is not chinese ie blacks and arabs. Chinese are replacing russians at their borders as russians dont reproduce much anymore either. They know the world of tomorow is theirs. Once muslims have taken over europe, chinese will then wipe them out and take over the whole fucking planet but north america. The world of tomorow is theirs.
they ll probably take over the planet in a last nuclear war for the ressources and forced to live underground to survives the fallouts they ll evolve to become like the roswell alien http://thebiggestsecretpict.online.fr/ufo/Roswell_alien_prop.jpg becoming smaller, losing their hair, living in obscurity and watching screens all life long. Then one day they ll leave the planet to find another one. This is the future of mankind.
In the next twenty years there won't be enough Net Energy, Water, Food, to attain that status. Like the little Japanese teenage kid in Movie Emperor of the Sun, trying to learn how to fly the one fighter plane there. Finally learned how and was ready to fly, he took off during the last raid of the war, and he was shot down.
They will arrive at the party but all the 'Food' had been eaten by the rest of the world for 100+ years.
And to top it off China is at an enormous food deficit disadvantage for all the talk of its 1 billion people. It just so happens the US is an enormous net surplus food advantage. The US also still has all the real guns. Who wins?
How is the Ogallala aquifer doing?
Gabon > Bag-On, Bag-Off
I heard Kim Jong Un has been retained as a consultant for Gabon.
True?
Every. One want's (A) quix fix<
In a world where governments seize the bank accounts of members of their own gene pool, is it any wonder that other lands will "re-acquire" assets previously sold or licensed out to complete outsiders? I'd rather stand for physical delivery of the entire open interest of COMEX contracts than try to cash in on China's international resource grab. Get your popcorn ready for when China starts trying to exploit the minerals and rare Earths in Taliban-controlled Afghanistan. Talk about home court advantage!
You wonder whether the US has had a quiet word to Gabon? Perhaps the start of testing its adversary global committments and reactions.
PetroChina larger than Exxon.. Military largest user oil... Supply Demand how does that fit carbon Tax mafia?
http://politicalvelcraft.org/2013/04/13/nuremberg-trials-are-back-on-the...
What do you think AFRICOM was designed to do?
"lasers in the jungle..."