Crude World (5 page)

There is a political price for having no medicine for the people but lots of booze for the elite (a VIP reception on the eve of the parade, to celebrate a leadership award Obiang bestowed upon himself, had featured enough Jack Daniel’s to inebriate Las Vegas). A few hours before the parade, several hundred soldiers—not the presidential battalion but underfed conscripts whose jungle checkpoints served as opportunities to cajole spare change from civilians—were ordered by the Moroccan bodyguards to break down their weapons to show they had no bullets. The Moroccans supervised this task with glares that made it clear that everyone they regarded was suspect.

The parade was led by the bulletless soldiers, goose-stepping in a manner that evoked East Germany circa 1976, though with less than Teutonic precision. I sat beside the grandstand, under an umbrella for protection from the occasional rain and the painful sun that was like a laser to my head. Delegations from town after town marched by with banners saluting the president, who sat in a cushioned chair in the grandstand, paying occasional attention to the exertions below him.

Just as the festivities settled into mind-numbing redundancy, I noticed a trio of American flags coming up the road, carried by a delegation of local men and women whose banner said they were from ExxonMobil. They also carried white ExxonMobil flags and wore T-shirts imprinted with the company’s logo. They were followed by delegations from Halliburton, ChevronTexaco and Marathon, all of
them hoisting corporate banners, American flags and celebratory placards that hailed the wisdom of the president. They were not the only representatives of Big Oil: American executives, having flown into town on corporate helicopters, sat in the VIP grandstand, mingling with dozens of diplomats and military attachés, including a colonel from the United States Army Special Forces.

It might seem odd that dignitaries from the world’s largest countries and executives from the largest companies would attend a dismal parade in a scorching corner of an oppressive nation so small it had just a few traffic lights and not a single bookstore. This was testimony to the reach of oil, which was turning the powerful into plunderers.

Just as every unhappy family is unhappy in its own way, every dysfunctional oil country is dysfunctional in its own way. A distinguishing feature of Nigeria is that it suffers all-against-all mayhem in which generals, ministers, oilmen, rebels and village chiefs are cogs in a national corruption machine. In Ecuador, oil led to the contamination
of a swath of the Amazon and left the government poorer, because it accumulated billions of dollars of debt it could not pay off. In Saudi Arabia, the financing of Islamic extremism is directly connected to oil. But Equatorial Guinea has been shaped in a different way. Oil consolidated power and wealth into Obiang’s hands and turned American companies and America’s government into his all-too-witting accomplices. If there was a silver lining to the petrodisasters of the twentieth century, it was that the same mistakes would not be made again. Equatorial Guinea became an oil exporter in the 1990s, by which time the world’s politicians, bankers and oilmen had promised to do a better job.

Parade in Ebebiyin, Equatorial Guinea

When I visited in 2004, the results were in. Thanks to oil, Obiang enjoyed a global embrace that had enabled him to become one of Africa’s richest men. The Western dignitaries at the Ebebiyin parade, though not stirring from their shaded seats, were carrying out a demonstration of their own—showing, by their satisfied presence, that they were on the side of dictatorship. Of course, it’s common for Western nations to embrace dictators, but the Mugabes and Marcoses of the world tend to be abandoned if their rule becomes too odious. The calculus is different if a dictator has oil. The substance not only offers itself as a treasure to be stolen; it can become a political amulet that protects the thieves from abandonment or punishment. Obiang, who accumulated friends rather than enemies, was proof. I learned this quickly while in the country, and the steepness of my learning curve was fortunate, because within two weeks Obiang became bothered by my presence. I was accused of being a spy and expelled.

Equatorial Guinea has a population of just over 600,000 people, spread over several islands in the Gulf of Guinea and on a postage stamp of land between Gabon and Cameroon. It was one of the last African nations to become independent, and for decades its island capital, Malabo, remained a throwback to colonial times, with nineteenth-century architecture and a pace of life that recalled a sleepy Spanish town in the early Franco years. Before the oil boom, itinerant dogs could nap in the middle of streets that had more potholes than cars. Even as the oil rush was taking hold, Malabo, which had a population of perhaps 100,000
souls, retained a lost-in-time vibe. My first visit to the Ministry of Information required a jolting drive on a road that had become a flood-plain after a rain shower. There was no runoff system, and there wasn’t much asphalt in Malabo. When I got to the ministry, there was no electricity; it was dark and stifling and felt like the setting of a 1950s Graham Greene novel.

I wandered on foot through Malabo as much as possible, because petty crime was not a concern. Nor did anybody tug at my sleeve to ask for money or try to practice his English on me. I had the sensation of being invisible, though I was the only Caucasian on these African streets. Few people even looked me in the eye. This was unusual, and there was an explanation.

Equatorial Guinea may be the most brutalized country on earth. In 1968 the Spanish handed control of their colony to a civil servant, Francisco Macias, whom they believed to be pliant. Macias, whose self-bestowed titles included “The Sole Miracle of Equatorial Guinea,” turned into a mass killer, murdering or driving into exile a third of the population. Some victims were crucified, and others shot in a soccer stadium, their screams drowned out by a military band playing the song “Those Were the Days.” Macias combined the worst aspects of Idi Amin and Pol Pot but evaded global notoriety because his suffering nation was so small and of no geopolitical interest. Spain, its former colonial ruler and at the time still a dictatorship itself, paid little attention to his bloodbath.

Macias surrounded himself with relatives from his hometown of Mongomo. A trusted nephew, Teodoro Obiang, was responsible for security in the capital, and by most accounts he fulfilled his duties avidly. At Black Beach Prison, Obiang allegedly supervised the torture and murder of inmates. Obiang began fearing for his own life after one of his brothers was killed by Macias, whose insanity now threatened his confidants. Obiang made his move, staging a successful coup in 1979. Macias was sentenced to death in a show trial held at Malabo’s only movie theater; the deposed madman was displayed in a cage suspended from the ceiling. Macias was executed by a firing squad composed of Obiang’s newly hired bodyguards from Morocco.

Obiang inherited a moribund nation. The economy consisted of anemic exports of cocoa and coffee. Obiang didn’t do much to improve matters. The kindest thing that could be said about his regime was that it was charmingly inept. One of his aides was caught smuggling marijuana into America when he left a trail of pot as he walked through John F. Kennedy Airport; his suitcase had a hole in its side. Obiang, who enjoyed playing tennis in a nation where ownership of a soccer ball was a sign of wealth, was mentioned in the foreign media when lists were published of the world’s worst dictators; he usually made the top ten.

His status was deserved. An opposition leader announced one day that Obiang “has just devoured a police commissioner. I say devoured, as this commissioner was buried without his testicles and brain.” Cannibalism has been denied by the government, but what’s undeniable is that Obiang did not treat his rivals with kindness. John Bennett, a former U.S. ambassador to Equatorial Guinea, told me of an opposition politician who returned from exile, unaware that Obiang remained displeased. Police thugs went to the politician’s hotel room, threw him to the ground and dragged him away by his feet, his head bouncing off a set of marble stairs. Later, he was beaten to death with staves; his demise was officially listed as a suicide. Bennett didn’t last long, either. He was evacuated in 1994 after receiving a death threat from an Obiang aide who soon became foreign minister. The American embassy was closed the following year. When we spoke before my trip to Equatorial Guinea, Bennett described it as “the world’s finest example of a country privatized by a kleptomaniac without a scintilla of social consciousness.”

At almost the same time Bennett had to leave, several hundred million barrels of oil were discovered in the country’s waters in the Gulf of Guinea. That’s a minor amount in the grand scheme of things—Nigeria has more than 35 billion barrels of oil, Saudi Arabia more than 260 billion—but it’s a destiny-altering amount for a nation whose population is smaller than that of Memphis. The way was led in the early 1990s by a small American company, Walter International, which then sold its valuable concession to a bigger firm that had the know-how and
financing to build an extraction infrastructure of wells and pipelines. Once the first fields were opened, larger companies, such as Marathon, bought rights to them and found yet more fields. This is often the way things work in the oil industry—there is a food chain of extraction rights and discoveries.

Although there are variations, usually a company pays a government a nonrefundable fee for the right to search for oil or gas. Depending on the likelihood and difficulty of success, the fee can range from a few million dollars to tens of millions or more. The poorer and less sophisticated a country is, the less it tends to receive, because its bargaining position and financial prowess are not terribly strong. Corruption plays a role, too. Quite famously, Standard Oil of California paid 55,000 pounds in gold for the right to search for oil in eastern Saudi Arabia in the early 1930s. At the time, the Saudi king was in desperate need of cash because his new country was deeply in debt and on the verge of falling apart. At the outset, the American companies that now extract oil from Equatorial Guinea reaped unusually large profits—the result, according to the International Monetary Fund, of Obiang and his financial advisers not understanding or not caring to understand how much they were giving away. This is one of the ways a country’s wealth is stolen. Corrupt dictators and officials, after taking bribes or negotiating lucrative side deals for themselves, award exploration and production contracts that are unduly generous to the companies on the other side of the bargaining table. The consequence is that crooked officials become rich but their country receives less for its resources than it should.

With oil-prospecting rights in hand, a company spends what can be considerable amounts on geological surveys and exploratory wells. The risks are high—if oil or gas is not found, the exploration costs are lost, usually tens of millions if not hundreds of millions of dollars, on top of whatever was paid for the mere right to explore. The gamble is offset by potential profits, because a company that finds oil or gas often has the contractual right to a share of revenues gained from extracting the treasure; at the least, it has an inside track on the next round of bidding. Walter International got lucky—it found oil under Equatorial
Guinea’s waters. The small company was soon bought out by a larger firm. Big Oil had found, as they say in the industry, a new “play.”

The “majors,” as the largest companies are known, poured money into the country—more than $7 billion by 2008—to build offshore platforms and onshore facilities to extract nearly 400,000 barrels of oil a day and considerable volumes of natural gas. Just a few miles from Malabo, Marathon built a $1.5 billion plant to turn natural gas into a frozen liquid that could be shipped to America and Europe. Malabo’s landscape was altered. At night, if you stood on the patio of the Hotel Bahia, where in the 1970s Frederick Forsyth wrote
The Dogs of War
, and where the political elite continued to gather for drinks when I was there, you could see the flares of Marathon’s plant, which was about ten miles away. In fact, you could not miss the flares—their light was strong enough to cast shadows at the Bahia.

In a geological blink of an eye, Equatorial Guinea became the third-largest energy exporter in sub-Saharan Africa, after Nigeria and Angola. Malabo boasted nonstop flights to Texas; they were known as the “Houston Express” and were filled with oilmen. By the time of my visit, gross domestic product had soared an almost unimaginable forty-fold from the pre-oil days. The country was exporting more oil and gas per capita than Saudi Arabia. If the revenues were spread evenly around the country, the people in Equatorial Guinea would be among the richest in the world.

The reality is fantastic only in the worst of ways.

Even if Mother Teresa were president of Equatorial Guinea, the odds would be stacked against her subjects getting rich from the country’s mineral wealth. That’s because it is not just the thieving activities of government officials that make it hard for average citizens to benefit from oil booms. The globalization of labor, combined with the small number of workers needed for capital-intensive oil projects, ensured that most Equatorial Guineans would watch others profit from the boom.