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Prepared by the
Institute for the Analysis of Global Security

August 5, 2003
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Under the Radar

Oil, terrorism and drugs intermingle in Colombia
Seventy U.S. Special Forces soldiers are training Colombians to protect an oil pipeline.

Japan's struggle to secure future oil supply
Energy dependent Japan looks to Iran for oil, causing tension with the U.S.

Chad-Cameroon pipeline project put to test
Will the pipeline, partially financed by the World Bank, improve the lot of Chad and Cameroon or exacerbate existing corruption and strife?

Natural resource curse hits São Tomé
A tiny West African country illustrates a well known problem.

On the technology front

Fuel Cell Locomotive for Military and Commercial Railways
An international consortium is developing the world’s largest fuel cell vehicle, a 109 metric-ton, 1 MW locomotive.

Fuel cell power plant installed at NJ Sheraton
A stationary fuel cell will supply 250 kilowatts of electric power as well as heat to the Sheraton Edison Hotel, accounting for about 25 percent of the hotel's electricity and hot water.

Fuel cell scooters for Europe and China
Palcan's fuel cell powered scooter is designed to address the world's need for a low-end mass transport vehicle.

U.S. Air Force to get fuel cell bus
Fuel cell powered thirty-foot hybrid bus to be stationed at the Hickam Air Force Base in Hawaii.

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Back Issues

Natural resource curse hits São Tomé

Before oil was found in São Tomé and Principe, the two-island country of 1,000 square miles on the Equator in the Gulf of Guinea, its 160,000 people relied mainly on fishing, cocoa, bananas and aid. The average annual income was $280. With the first signs of oil, the former Portuguese colony began facing the same problems characterizing most natural resource producers.

Seismic data suggests the offshore blocks in the Gulf of Guinea could hold between four and 11 billion barrels of reserves at depths of between 1-1.5 miles. Neighboring Nigeria has a treaty with São Tomé establishing a joint development zone in waters off the shores of both countries. Under this deal, 60 percent of the revenue from the area would go to Nigeria and the rest to São Tomé. Big oil companies such as ExxonMobile, ChevronTexaco and Royal Dutch/Shell have expressed interest in bidding for exploration licenses that would pour millions of dollars into the islands. The oil will take a long time and substantial investment to extract and is unlikely to reach the market before 2007 or 2008. But arguments over oil revenues have already fuelled political and social disputes in recent months.

Since September 2001, four prime ministers have been fired. The army and the political and business elites sense the promise of the oil windfall and want a part of it. This was the background for a bloodless coup by a military junta under Fernando Pereira that took place on July 16. Pereira told state television his first televised appearance after the coup that his men acted because of the "incompetence and corruption'' of successive governments which had left São Tomé in "extreme poverty.'' São Tomé's ousted leader Fradique de Menezes, in neighboring Nigeria at the time of the coup, had a different story. "It's because of oil that they want to take over power," he said, calling those who unseated him "small groups of oil-smelling people."

de Menezes called the international community to put democratic order back in the country and indeed the coup leaders faced the threat of possible military action by African states intent on reversing the grab for power. The U.S, the UN, Portugal and the 53-member African Union all condemned the coup. Nigeria, the world's eighth largest oil exporter, was the country most involved in efforts to stabilize the situation in São Tomé. International pressure prevailed and the week-long coup crisis finally ended with an agreement negotiated in Gabon between the coup leaders and international envoys, calling for the formation of a new government - with de Menezes remaining president - and political guarantees that de Menezes respect the separation of powers between the presidency, parliament and other state institutions. The coup leaders were granted amnesty.

Though the coup ended, São Tomé problems are only beginning. It is going to get a lot of money and it lacks the political and financial institutions or the infrastructure to manage such amounts. A lot of money could disappear into private pockets, and that will likely fuel unrest.

Also see:
Africa Drowns in a Pool of Oil
West African Oil: Hope or Hype?