The continent of good hope
Transnationals, especially from India and China, have pushed into Africa driven by their desire to secure access to oil and raw materials for their rapidly growing economies back home.Updated: Jul 01, 2008 21:14 IST
Transnationals, especially from India and China, have pushed into Africa driven by their desire to secure access to oil and raw materials for their rapidly growing economies back home. However, there is a problem. Africa is also home to many countries that have experienced humanitarian emergencies. Sudan, for instance, is civil war-ridden. But that hasn’t prevented India’s ONGC Videsh Ltd, the subsidiary of State-owned oil giant Oil and Natural Gas Corporation (ONGC), from being heavily involved in oil exploration. As is China’s CNPC that has invested billions in Sudan’s oil sector and has stationed thousands of irregular military personnel. OVL’s operations have come under criticism from Amnesty International and Genocide Intervention Network for indirectly contributing to the ongoing conflict in Sudan.
The role of transnationals in search of oil and other raw materials in conflict-ridden African countries is bound to attract intense scrutiny. Unfortunately, the truth is also that energy resources and metals are often found in difficult regions — a resource curse that hardly benefits the host country. Indications are that OVL was very much aware of the issues involved when it exited its only hydrocarbon asset in the US a month before it acquired a 25 per cent stake in the Greater Nile Petroleum Operation Company in Sudan. It’s also true that OVL couldn’t aggressively pursue its interests as it was handicapped by a limit of $1 billion that was placed on its investments while its Chinese rival’s committed investments were 15 times higher. OVL, in fact, has lost out to the Chinese in this scramble for oil in Nigeria and Angola.
OVL’s pursuit of energy security is a legitimate objective. The best way to go about it in Sudan is to contribute to its development by building railways and other infrastructure. Unless this is done, there is a clear danger of being tagged as the ‘new imperialists’ with its accompanying taint of rapacity.