A Thesis Completed for Fulfillment of Obtaining the Master Degree in International Politics
National ChungHsin University
Taichung City
Taiwan

Fanie Herman
2008

Acknowledgements

I would like to express my sincere gratitude to the staff and lecturers at the Institute for International Politics at National ChungHsin University, Taiwan for allowing me to obtain a postgraduate (master) degree. During the past two and a half years I have been a student at this institute and am grateful for the opportunity to have been selected as the first foreign student to graduate from this institute. My goal was to obtain a postgraduate (master) degree in International Politics and apply for later doctoral studies, possible at this institute or elsewhere. I consider the academic standard of the institute as of high caliber and professional. The credentials of the lectors speaks volumes and they can certainly be ranked as expertise in their respective fields. The course material is also interesting and relevant to current international relations and political affairs, especially with regards to cross-strait relations and security and strategy in Asia-Pacific.

Before enrolling at this institute my knowledge of politics in Asia was very limited, since I hail from an academic environment where not much emphasis was placed on Asian politics. In this way, the lectures focusing on local politics and the role of China was especially significant. Courses on European politics, International Organizations, Modern Civilization and Terrorism also presented a newly found perspective.

Interaction with local students was especially meaningful, since it enriched and broadened my view on Taiwanese culture and the way students approach academic environments in Taiwan. It also gave me the opportunity to improve my Mandarin listening and speaking ability, something that is very necessary for international students when they tend to study at this institute and integrate with the local students. By allowing term papers and finally the thesis to be submitted in English was a big motivation to commence my studies at this institute.

Finally, thank you to everyone that made studying at the Institute for International Politics at National ChungHsin University, Taichung City, Taiwan such a memorable experience.

Abstract
　　Oil and gas supplies are becoming scarcer and more expensive. The hunt for the world's remaining resources is creating new alliances and the danger of fresh conflicts. The Chinese economy has expanded to the point where it has now achieved a self-sustaining critical mass, with rising domestic demand increasingly driving overall growth. This trend is most notable in the energy field and especially as regards oil, where since the early 1990s China has moved from being a net exporter, to the point where the country will soon rely on imports for over half of its total—and increasingly voluminous— oil consumption.
　　China comes to Africa with pure trade and economical intentions, to offload Chinese products in the markets of host countries in exchange for oil and other resources. African states traditionally relied on western colonial powers for economic aid and political influence, however with the rise of China and its increasing involvement in Africa, the situation is slowly changing. Petroleum states endeavor to establish relations based on the supply of oil, in return for investments and other economical incentives.
　　The United States regards Sub Saharan Africa as of growing importance in the supply of oil. By the end of the decade, for example, sub-Saharan Africa is likely to become as important a source of U.S. energy imports as the Middle East. China, India, Europe, and others are competing with each other and with the United States for access to oil, natural gas, and other natural resources. The US moves into Sub Saharan Africa to promote democracy, good governance and transparency in economies of petroleum states, along with establishing a strong military command to protect its oil interests and monitor the actions of militant groups.
　　Since the start of the twenty first century both the US and China have turned toward Africa and focused on oil diplomacy with petroleum states. The ways in which they approach the Sub Saharan African oil producers are however different. This is the main theme of this research, to look at the diplomatic measures the US and China undertake in negotiations with petroleum states and the results they expect, or in other words, the preferences over outcomes. To present a comparative analysis of US and Chinese import figures from Sub Saharan Africa and relationships with individual petroleum states is outside the scope of the study. The question is asked, what are the United States and China’s strategic motives in Sub Saharan Africa? Why do they choose to engage Sub Saharan African countries and in what way is such diplomacy beneficial? An important analysis is that United States and China indeed compete for Sub Saharan African oil, but that there is also room for cooperation. Along these lines the study investigates the oil diplomacy of the US and China in Sub Saharan Africa using the strategic-choice approach as analytical framework.
Keywords: Oil Diplomacy, US-Sino Oil Security, Sub Saharan Africa, Strategic-Choice, Competition and Cooperation.

Table of Contents
Chapter 1: Introduction to the Study 1
Ⅰ. Introduction 1
Ⅱ. Literature Review 3
Ⅲ. Methodology 7
Chapter 2: The United States and China’s Oil Dependency 13
Ⅰ. The Concept of Energy Security 13
Ⅱ. The United States and Oil Dependency 15
Ⅲ. China and Oil Dependency: Rapid Energy Demand Growth 19
Ⅳ. Energy Security: Importance for this Research 24
Chapter 3: Petroleum States in Sub Saharan Africa 26
Ⅰ. Production and Exports 26
Ⅱ. The Characteristics of Oil Politics in Sub Saharan Africa 28
Ⅲ. The Strategic Benefits of African Oil 31
Chapter 4: The United States and China’s Oil Interests in Sub Saharan Africa 35
Ⅰ. The Strategic Significance of Sub Saharan African Oil to the United States 35
Ⅱ. China’s Oil Interests in Sub Saharan Africa 41
Chapter 5: A Strategic-Choice Approach: The Preferences of the United States and China 49
Ⅰ. The US and China’s Preferences 49
Ⅱ. Determining Preferences 54
Ⅲ. Preference Change 61
Chapter 6: The Implications of Strategic Interaction between the US and China 66
Ⅰ. China and Sub Saharan African Oil: Implications for the United States 67
Ⅱ. The United States and Sub Saharan African Oil: Implications for China 70
Chapter 7: Conclusions 74
Bibliography 78

Chapter 1: Introduction to the Study
Ⅰ. Introduction
　　"Petroleum and coal resources in much of sub-Saharan Africa are under explored and underdeveloped. There is considerable interest in the petroleum potential of coastal areas within the region, yet the overall energy picture is unclear compared to most of the world. Several sub-Saharan countries have mature petroleum industries and are important exporters to the world market, whereas many others have inadequate information on their energy resources. This is especially true for small accumulations of gas and coal in landlocked areas. These local resources are important in-country commodities and, if developed, could help countries formulate new, environmentally sound energy policies."1
　　In the last decade the US and China has moved their hunt for oil security to the African continent. The US and China arrive on the Sub Saharan African (SSA) oil scene with their own motives and interests, the most important to engage in oil diplomacy with petroleum states and secure the safe import of oil from the region. African states traditionally were influenced by colonial powers, however with the rise of China and its increasing involvement in Africa, the situation is changing. The US focuses on humanitarianism, good governance and democratization of petroleum states in their oil diplomatic approach. China, the world’s fastest growing economy, views Sub Saharan Africa as a welcome offloading ground for its products in exchange for oil. An economical approach focusing on enlarging its commercial interests is the driving factor for China’s engagement with petroleum states. China needs more raw materials to supply in its increasing domestic demand.
　　China has relationships with African countries dating back to the fifties, when China was spreading the doctrine of communism and lending military support to African countries in their struggle for independence from western colonialism. After the collapse of communism and the end of the cold war, the new goal in Africa was to formalize trade and economical ties with African states. With China’s switching to a net oil importer in the middle nineties, petroleum states in Sub Saharan Africa were targeted as potential sources of oil supplies. But it was not until the start of the twenty first century that China commenced to earnestly engage petroleum states.
　　Instability in the Middle East, oil dependency and securing its energy interests drives the US to Sub Saharan Africa. To keep a watchful eye on China’s involvement and monitoring its influence with petroleum states is another reason the US is devoting much of its time to this part of Africa. The US interest in the region focus on the procurement of oil and gas, but with the establishment of the new African command center (Africom), US involvement in SSA shifted in a large degree to the fight against terrorism and safeguarding of American oil operations.
　　The US government’s policy is to encourage energy producers to help curb vigilante actions that are directly linked to the production of oil and gas, by offering security assistance.2 In Nigeria illicit trading in natural resources and sabotaging of oil pipelines cost the government millions in foreign revenues and restrain efforts to implement good governance principles.

An outline of the key points and questions in this study
What are the United States and China’s viewpoints on energy security with an emphasis on oil dependency?
What are the strategic benefits of Sub Saharan African oil for the United States and China?
Why is West Africa’s Gulf of Guinea strategically significant for the US?
Why is China looking to Sub Saharan Africa as its new source of crude oil?
What are the US and China’s oil diplomacy with petroleum states?
What are the implications of the strategic interaction between the US and China in Sub Saharan Africa?
Is US-Sino Oil Diplomacy in Sub Saharan Africa determined by competition or cooperation?

Ⅱ. Literature Review
　　First, the views on the United States and China’s energy security in the twenty first century are mentioned. Second, China’s resource diplomacy in Sub Saharan Africa focuses on the procurement of oil and engaging in economic relations with petroleum states. These facts are discussed in terms of visits by the Chinese premier, Hu Jintao to Sub Saharan Africa aiming to strengthen diplomatic ties. The third section looks at the United States involvement in Sub Saharan Africa that focuses mainly on expanding and protecting United States energy interests. The last section in the literature reviews China’s influence in the region and the implications for the United States.
　　The Chinese President Hu Jintao remarked at the 2006, G8 summit in St. Petersburg:” To ensure global energy security in a changing world, we need to develop and implement a new energy security concept that calls for mutually beneficial cooperation, diversified forms of development and common energy security through coordination," Hu stressed dialogue, cooperation between energy exporters and energy consumers as one of the major challenges. Hu also highlighted the importance of advanced energy technologies, renewable energies, hydrogen power, nuclear power and energy-saving technology. Lastly, efforts should be made to maintain a sound political climate favorable to energy security and stability, Hu said.”3
　　Yergin in a much earlier writing is of the opinion that the US must make every effort to invite China to the energy security debate. There is much talk of a clash between the U.S. and China over oil. But there is nothing inevitable about it. Commercial competition need not turn into national rivalry.4
　　Chinese leaders see Africa, in a strategic sense, as up for grabs. From China’s perspective the Western powers and Western companies have had their chance in Africa and really nothing has happened.5 China’s voracious demand for energy to feed its booming economy has led it to seek oil supplies from African countries including Sudan, Nigeria, Angola, Algeria, Gabon, and Equatorial Guinea.6 Much of the trade and investment in Africa is energy-related. China is following a very traditional path established by Europe, Japan, and the United States: offering poor countries comprehensive trade deals combined with aid.7
　　China faces its own challenges in Africa, in that communication and slow processing of documents by African counterparts makes negotiating a time consuming process.8 Alden argues that China, after a long time of multilateral trade and investment projects, has a renewed interest in Africa that is a matter of great concern to western countries and old colonial powers.9
　　Alden says that western powers view China as the new colonizer, which are only after Africa’s energy resources and don’t recognize human rights abuses and corruption in African governments.10 China doesn't have the same human rights concerns as the United States and European countries, so it will sell military hardware and weapons to nearly anyone. China’s active exploration of oil sources in Africa also leads to a need to ensure security around them, experts say, which has led Beijing to send Chinese military trainers to help their African counterparts. In return, China gains important African allies in the United Nations—including Sudan, Zimbabwe, and Nigeria—for its political goals, including preventing Taiwanese independence and diverting attention from its own human rights record.11
　　The motivations for hosting the Forum on China-Africa Cooperation (F.O.C.A.C.) in November 2006 in Beijing, according to Wolfe are clear: China is seeking to diversify its access to natural resources, shore up diplomatic support for Chinese initiatives at the United Nations and other multilateral organizations, and develop markets for its exports.12
　　The Beijing Summit has drawn a lot of criticisms from western countries. China has been criticized for dealing with governments such as Sudan that have poor human rights records. A conflict in Sudan's Darfur region between government-backed Arab militias and the non-Arab population has killed about 200,000 people in the past three years.13 According to Oliviera, American interests in Africa range from development and humanitarian problems to the more recent challenges posed by globalization and the opportunities for terrorists and other violent actors to exploit unstable countries.14
　　Moreover, as articulated in both the 2006 State of the Union address and the National Security Strategy, the importance of expanding and ensuring America’s access to energy resources has transformed Africa from a strategic backwater into a priority region for U.S. economic, political, and military interests. Oil revenues in developing countries tend to foster corruption, contribute to instability, and undermine incentives for reform.15 Goldstein says that the Gulf of Guinea oil basin in West Africa, with greater western and southern Africa and its attendant market of 250 million people located astride key sea-lanes of communication is a vital interest in U.S. national security calculations.16
　　Much of Africa’s petroleum resources remain underdeveloped or unexplored, particularly in sub-Saharan Africa.17 The United States and the western nations altogether, cannot consider Africa any more their chasse gardé as the French once considered Francophone Africa. Chinese bit for oil and market is rapidly out-weighing the West. There is a new strategic framework operating on the continent and it demands new ways of operating. Lyman proposes three challenging ideas; First, the impetus must come from Africans themselves with the US providing more fund for democracy, good governance and civil-society building; the second opening Western markets for African goods and third, the US engaging China on African issues given that China wants to be respected as a world power.18
　　Marlowe, Bain and Shapiro is of the opinion that China’s keen interest in Africa’s energy resources is not at all appealing to US energy advisors. Whatever may be said about energy independence, the truth is that there is only one global oil market, and the U.S. and China are part of it.19
　　For this reason it is of utmost importance that China should not be excluded in energy discussions and be invited to the round table, especially seen in the context of the African energy market.20 The three main spots on the world stage where competition for oil resources is taking place are Iran, Sudan and the Gulf of Guinea. In these regions, US exasperation at Chinese disdain for human rights and the sole desire to secure energy resources in conflict-ridden states by offering aid or arms-for-oil could heighten instability in the region. This situation is worsened by the fact that African states have been drawn to China by its non-interventionist, non-ideological approach in conducting relations. The press also makes the fear that China might leave Africa worst off.21
　　Downs examined the facts about the growing involvement of China’s NOC’s in Africa and concluded that China’s NOCs are not locking up western oil companies from Africa, but are relatively small players. The commercial value of the oil investments in Africa of China’s NOCs is just 8 percent of the combined commercial value of the IOCs investments in African oil and 3 percent of all companies invested in African oil.22
　　The research question, Sino-US energy Competition in Sub Saharan Africa after the Cold War, is a contemporary issue with many credible and less credible writers reporting on it. The literature presents an empirical background of the United States and China’s influence in Sub Saharan Africa since the start of the twenty first century, based on factual information. A benefit of the literature is that it laid a solid foundation for a qualitative research study into US-Sino oil diplomacy in Sub Saharan Africa.
　　The main weakness of the literature is the general reference to US-Sino oil security in a competitive world oil market and how factors such as scarcity of oil, increasing oil demand, instability in the middle east, diversification of import channels and safe delivery of imports are dominating the oil debate. Little reference is made to the application of oil security in the Sub Saharan African context, especially in formulating an analytical framework, whereby US-Sino oil diplomacy in SSA can be investigated.
　　An important question is, how much does the U.S and China rely on imports from SSA petroleum states and if production and export statistics are indicative of an oil dependency relationship. Are the different export figures to the U.S and China based on pure demand and supply forces or are elements of strategic interaction shaping these relationships? The study examines if petroleum states because of ideological preferences, contrasting energy security perspectives and economical considerations, engage the US and China on different terms and conditions. The establishing and enforcing of bilateral and economical ties are also on the agenda and partnerships will obviously be signed, taking diplomacy into consideration.
Ⅲ. Methodology
　　The strategic-choice approach will be used as analytical framework for this research. Lake & Powell (1999) formulated an approach that makes it easier for students of international relations to explain the choices actors make – whether these actors are states, parties, ethnic groups, companies, leaders or individuals. This synthesis offers three new benefits: first, the strategic interaction of actors is the unit of analysis, rather than particular states or policies; second, these interactions are now usefully organized into analytic schemes, on which conceptual experiments may be based; and third, a set of methodological “bets” is then made about analyzing interactions.23 Together, these elements allow the pragmatic application of theories that may apply to a myriad of particular cases.
　　The preferences and prior beliefs of actors in conjunction with the strategic environment are the core attributes on which the strategic-choice approach is based.24 The strategic-choice approach has great methodological value in that it focus on the strategic problems regardless of who the relevant actors are and at which level they might be located. In the SSA oil strategic there can be as many goals as there are people involved in formulating them and the goals can each have their own distinctive agendas.
　　What are the oil security preferences of the US and China in SSA and how is it influenced by the environment? Changes in the behavior of actors are often difficult to perceive in the strategic-choice approach.25 Whenever changes in the behavior of actors do take place, it is primarily done through learning, through changes in the actors’ environment or by decomposing the actors into more basic actors.26 In this study, the methodological bet would disaggregate the actors into more basic actors, for example the individual beliefs of the energy departments, national leaders, multinational oil corporations, bureaucrats and individuals are integrated into the analytical framework.
　　Frieden (1999) mentions the concept of actor’s preferences over choices and how the outcomes affect strategic interaction between actors in the same setting.27 The preference in a particular setting, leads the agent to devise a strategy. In one interaction, preferences (ends) within the given setting determine the choice of strategies( means). It is practically and analytically important to separate the preferences of states, groups and individuals from the strategic environment they face. By the same token, it is practically and analytically important to hold preferences constant for one round of interaction. This allows the international relation analyst to explore how preferences and environments affect outcomes.28
　　Analysts of international relations have long debated how preferences and the strategic environment affect outcomes, jointly and separately. Many debates in the field have to do with whether outcomes are primarily the result of the constraints of the international system or of differences among national preferences.29 A strong variant of realism, for example, implies that state preferences are so swamped by the pressures of interstate competition that all states must pursue essentially identical strategies. A strong domestic - dominance perspective might, on the other hand, argue that different state strategies flow primarily from different national characteristics and preferences.30
　　It is never inherently obvious whether action is the result of preferences or strategies, underlying interests, or the environment in which they play themselves out. In any given setting preferences are fixed and strategies derive from them. However, by the “boxes within boxes” standard, a preference in one box may well be the strategy from a previous box and a strategy from this box may well give rise to a new preference. A progression is implied by the terms and actors preferences can aggregate into a set of multilaterally or unilateral agreed strategies.31
　　Each step in this progression involves a preference, then an evaluation of the setting within which this preference is to be pursued and finally a derived strategy to obtain the preference. An important point is that preferences of states, groups, and individuals be separated from the strategic environment.32
　　Due to the continuous rise of new issues in SSA oil politics, the argument is that preferences are shaped by environmental factors. It will be difficult, therefore, to separate the preferences of the actors from the strategic environment. Another point is that it is difficult to judge if the oil environment and the interplay between the US and China can be held constant for one round of interaction. As argued by the “boxes within boxes “ standard, interaction between actors in a strategic setting give rise to policy outcomes derived from preferences.
　　These policy outcomes may lead to the shaping of new preferences based on the previous strategies. A cycle of strategic interaction is then proposed by the interplay of preferences and strategies. In the SSA oil setting the US and China in deciding what preferences over outcomes they desire, have to take environmental conditions into consideration, because the oil political environment is constantly changing. Instability of oil regimes, corruption, the curse of oil, bad governance and terrorism are contributing factors to this changing environment. In more stable, homogenous oil environments, actor’s preferences are more constant.
　　The environment in North Africa is a region with a more or less stable oil infrastructure, where actors formulate clear, definable goals, separate from environmental influence. The North African oil producing states of Libya, Algeria, Morocco, Tunisia and Egypt have strong unifying Muslim roots and they can shape their preferences around a common goal. In Sub Saharan Africa, the environment and the choices actors make are separated, because of ethnic division, religious differences, corruption, instability, bad governance and the gross mismanagement of oil revenues. These factors then make it difficult for leaders to shape preferences without interference of environmental constraints. In reality leaders of oil states will base individual preferences on self-enrichment and state goals on the dynamics of interplay between actors in the strategic setting.
　　The main energy security debate for the American and Chinese government in the twenty first century focus on the concept of oil dependence. Diversification of import channels, safe delivery of imports and establishing reasonable prices are factors that influence the decision-making of policy makers. The next chapter investigates the importance of these factors to US-Sino oil security perspectives.
First a diagram shows the systematic arrangement of the chapters and its subheadings in this research.











Table1.1: Research Structure


Chapter 2: The United States and China’s Oil Dependency
Ⅰ. The Concept of Energy Security
　　The central imperative of energy security is having a vigorous domestic and international marketplace in which prices and allocation are determined by market forces rather than government decree.33 One of the leading threats to energy security is significant increases in energy prices, either on the world markets – as has occurred in a number of energy crises over the years – or by the imposition of price increases by an oligopoly or monopoly supplier, cartel or country. In some cases, the threat might come from a single energy superpower – those states that are able to significantly influence world markets by their action alone. Threats to energy security can also result from physical damage to the energy infrastructure, either of the supplier, or of the importer as a result of natural disasters, terrorism, or warfare.
　　In recent years, new threats to energy security have emerged in the form of the increased world competition for energy resources due to the increased pace of industrialization in countries such as India and China.34
　　Increased competition over energy resources may also lead to the formation of security compacts to enable an equitable distribution of oil and gas between major powers. However, this may happen at the expense of less developed economies.35 Energy security on a global as well as national level means access to sufficient energy supplies at reasonable prices from a stable source. Securitization is a process through which an object or a value becomes signified as a threat and as such an issue of high importance for which defence is justifiable to use means that otherwise could not be legitimated, had the securitization discourse not taken place.36
　　One of the ultimate methods is the use of force. The security dilemma represents a situation in which the efforts of one actor to increase their security could induce fear and suspicion in another actor. The other actor could perceive such efforts as a threat to his own security, and therefore could take similar action in order to increase his own advantage in the balance of power.37 If we observe energy-sector potential, it can be seen that this model of the initiation of an energy dilemma situation is analogous with the model of the competition for energy resources between the United States and China.38
　　The securitization can be understood as a more extreme version of politicization in which a problem becomes not only an issue of public significance, but also a matter of survival of a state, nation or individual group. In order for securitization to be successful, the securitizating actor who is undertaking it must convince their audience that something (in this case energy resources) is of such value that the use of extraordinary means in its defence is justified.39
　　Henry Kissinger said when he was Secretary of State, that foreign affairs agendas– that is, sets of issues relevant to foreign policy with which governments are concerned – have become larger and more diverse. No longer can all issues be subordinated to military security:” progress in dealing with the traditional agenda is no longer enough. A new and unprecedented kind of issue has emerged. The problems of energy, resources, environment, population, the use of space and the seas now rank with questions of military security, ideology and territorial rivalry, which have traditionally made up the diplomatic agenda.40
Figure 2.1: World Energy Consumption, 1990-2030

Source: Figure retrieved from the Energy Information Administration (EIA) at http://www.eia.doe.gov/oiaf/ieo/figure_8.html (Note on the BTU. The British thermal unit (BTU or Btu) is a unit of energy used in the United States of America, particularly in the power, steam generation and heating and air conditioning industries. In North America, the term "BTU" is used to describe the heat value (energy content) of fuels, and also to describe the power of heating and cooling systems, such as furnaces, stoves, barbecue grills, and air conditioners. When used as a unit of power, BTU per hour (BTU/h) is understood, though this is often confusingly abbreviated to just "BTU".

Ⅱ. The United States and Oil Dependency
　　Dependency on oil is a major concern for the US government in that it renders the US government more vulnerable to oil imports, a situation the US government is trying to avoid rather than encourage.41
　　Dependency can be defined as an explanation of the economic development of a state in terms of the external influences--political, economic, and cultural--on national development policies. Dependency as a state of affairs is characterized by conditions and policies that safeguard the health of a countries economy against threatening circumstances.42

Figure 2.2: U.S. Net Oil Imports (2006)


Source: Figure retrieved from the Energy Information Administration (EIA) at http://tonto.eia.doe.gov/country/country_energy_data.cfm?fips=US
　　A report of the Council on Foreign Relations indicated that the United States is not well prepared to address the question of energy independence for the following reasons.43
　　First, the United States, but other countries as well, are finding that their growing dependence on imported energy increases their strategic vulnerability and constrains their ability to pursue a broad range of foreign policy and national security objectives. Dependence also puts the United States into increasing competition with other importing countries, notably with today’s rapidly growing emerging economies of China and India.44
　　As more hydrocarbon resources in more remote areas are tapped, the world economy will become even more dependent on elaborate and vulnerable infrastructures to bring oil and gas to the markets where they are used.45 The challenge over the next several decades is to manage the consequences of unavoidable dependence on oil and gas that is traded in world markets and to begin the transition to an economy that relies less on petroleum. The longer the delay, the greater will be the subsequent trauma.
　　While there are reasons to be concerned about the adequacy of the near-term supply of natural gas to the North American market, at present natural gas markets work relatively well. To date, there is little dependence on natural gas from outside of North America, thus avoiding the political repercussions accompanying oil imports. There are large amounts of ‘‘stranded’’ gas available around the world that can be transported to markets using technologies that are increasingly economic.46
　　Most attention is focused on the technologies of liquefied natural gas (LNG), through which gas is cooled and compressed to a liquid, shipped on tankers, and then warmed and re-gasified to its original form. Realizing the potential for LNG will require additional facilities to receive and re-gasify imported LNG in the United States.47 Second, the United States should take several initiatives to encourage the efficient, transparent, and fair operation of world oil and gas markets. The United States must not act alone in this endeavor, as all consumer nations have a common interest in well-functioning international markets for oil and gas.48
　　Third, producing and consuming countries have a common interest in reducing infrastructure vulnerability, whether to terrorist attacks or natural disasters. Fourth, there are too many examples of countries that exploit their oil and natural gas resources while failing to manage the revenues in a way that improves the social and economic prospects of their people. While there are limits to what can be accomplished, the Task Force believes the United States must play a stronger role in promoting better management of hydrocarbon revenues. Too often, these revenues accrue to a small minority that is unaccountable to any representative political authority, which not only undermines governance, but also risks the political stability that is essential to reliable production of oil and gas.49
　　Fifth, the U.S. government is not well organized to address the threats to national security created by energy dependence. There is a need to mobilize the resources of the government in a manner that better ensures continuity of attention and integration of the political, economic, technical and security perspectives needed for energy policymaking.50

Strategies and Planning
　　A Report by the Strategic Studies Institute indicates that frequent contact with producing and consuming nations is critical to energy security.51 Likewise the US also maintains open lines of communication with leaders in the private sector who are the principal operators of much of the international energy assets and infrastructure. The US efforts with consuming nations are focusing on diversifying energy portfolio; energy efficiency approaches and ways to work towards new technologies that we believe can change the way we power our homes, our businesses and our automobiles. The United States believes that over the long term the energy strategy is one based on diversity of supply.52 In this regard the US is making every effort to address America’s short-term energy needs while ensuring that the US is able to meet future energy demands.
　　The United States has embarked on two new initiatives that are based on the belief that scientific discovery and technological advancement are the keys to meeting our future energy needs. The first one of these initiatives is the launching of an Advanced Energy Initiative (AEI)that will accelerate investment into clean energy technologies in order to transform the way the US produces household energy, in businesses and transportation sectors.53 The State Energy Department has requested $2.1 billion in financial year (FY) 2007, a 22 percent budget increase to develop new technologies and alternative sources of energy to help diversify and strengthen the nation’s energy mix.54
　　Moves to restrict foreign investment and increase the reach of state-run energy industries limit their ability to access capital for investment, restricting the development and access to energy supplies and infrastructure.55 It is a model that may hold patriotic appeal but delivers less prosperity to citizens and less stability in global energy supply. The challenge over the next several decades is to manage the consequences of unavoidable dependence on oil and gas that is traded in world markets and to begin the transition to an economy that relies less on petroleum.
　　The longer the delay, the greater will be the subsequent trauma. For the United States, with 4.6 percent of the world’s population using 25 percent of the world’s oil, the transition could be especially disruptive.56
　　Diversification of oil supplies has been a goal - even an obsession – in the United States since the Arab oil embargo of the 1970’s. Successive US administrations have understood that if the world is overly reliant on two or three hot spots for its energy security, there is greater risk of supply disruptions and price volatility. And for obvious reasons the effort to distribute America’s energy security portfolio across multiple nodes has taken on a new urgency since September 11, 2001. In his state of the Union address, President Bush said he wanted to reduce America’s dependence on Middle East crude by 75% by 2025.57
　　It’s a time of high and rising anxiety for the US and other oil craving nations of the world to satisfy its oil needs. As China, Brazil and other countries compete ever more aggressively, “friendly” territories like the North Sea or Texas are maturing and the global hunt for energy is shifting to harsher places. “The good Lord, “US vice-president Dick Cheney once said, didn’t see it fit to put oil and gas only where there are democratically elected regimes friendly to the United States”.58
　　As Russia wields its oil and gas as a political crowbar against foreign adversaries, as South American leaders nationalize energy assets and as conflicts rocks the Middle East, the producer countries are growing bolder.59 This boldness means that oil-producing countries of the world realize that oil is now more than a strategic commodity vital to keep economies rolling, but that its power as a bargaining tool is probably becoming more important than pure economical reasons. Oil producing countries can now easily dictate terms to their own advantage and often to the disadvantage of the importing country.
Ⅲ. China and Oil Dependency: Rapid Energy Demand Growth
　　From 2000 to 2005, China’s energy consumption rose by 60 percent, accounting for almost half of the growth in world energy consumption.60 The country is able to meet more than 90 percent of its energy needs with domestic supplies—largely because of abundant coal reserves and a coal-based economy. Self-sufficient in oil as recently as 1993, China became the world’s second largest consumer of oil behind the United States in 2003. A year later it was the number three importer of oil after the United States and Japan.61
　　Between 2000 and 2005, China was responsible for about one quarter of the growth in world oil demand, but only accounted for less than 8 percent of global consumption. However, imports are projected to account for 60–80 percent of China’s oil consumption by 2020.62 China is grappling with its new role as a major importer of oil. The country’s loss of self-sufficiency, substantial increases in the volume and cost of its oil imports after the turn of the century, and its emergence as an important factor in the world oil market and accompanying international scrutiny all caught China’s leaders by surprise. For the past decade, Beijing has been struggling to cope with the domestic and foreign consequences of rapid economic growth. China’s oil interests, like those of other countries, will continue to shape its broader foreign policy.



Figure 2.3: China’s Net Oil Imports (2006)



Source: Figure retrieved from Energy Information Administration (EIA) at http://tonto.eia.doe.gov/country/country_energy_data.cfm?fips=CH　　
　　Chinese and international energy experts alike agree that China’s reliance on imported oil will increase. China’s demand for oil doubled over the past decade, increasing from 3.3 million barrels per day (bpd) in 1995 to 6.6 million bpd in 2005, almost one third of U.S. demand.63 Between 2000 and 2005, China accounted for about one quarter of the increase in world oil demand growth. In 2004 alone China’s oil demand grew by 850,000 bpd, a year-on-year gain of about 15 percent, primarily because of a surge in demand for diesel for power generation.64
　　The surge in Chinese demand in 2004—which most oil market analysts did not anticipate and which moderated in 2005—underscored China’s emergence as a decisive factor in the world oil market. Energy experts agree that China’ oil demand will continue to grow through 2020, although their projections vary: recent estimates range from 10 million to 13.6 million bpd.65 Different assumptions about the growth rate of China’s gross domestic product (GDP) and the income elasticity of demand probably explain a large portion of the discrepancies.
Figure 2.4: Top Sources of China’s Crude Oil Imports, 2005 and 2006
Source: Figure retrieved from Energy Information Administration at http://www.eia.doe.gov/emeu/cabs/China/Oil.html
　　Based on the demand and supply projections above, China’s oil imports are expected to increase from about 3 million bpd in 2005 to between 6 million and 11 million bpd in 2020, some 60-80 percent of the country’s total oil consumption.66 This wide projected range reflects the uncertainty about China’s future oil demand and domestic supply. Oil is necessary for economic growth because there are no efficient and cost-effective substitutes for gasoline, diesel, and jet fuel for transportation. Second, oil is required to power the military; inadequate supplies could hamper China’s efforts to prevent Taiwan’s permanent separation from the mainland.67
　　Third, because oil is a source of both economic and military power, it underpins China’s rise to great power status. Fourth, China is looking for oil sources other than the Middle East, to reduce its dependency from this unstable region.68 Li Junru, vice president of the CCP’s Central Party School, has argued that the most important factor affecting China’s “peaceful rise” to international preeminence is not Taiwan, but rather the global competition for energy resources.69 Fourth, all of the elements above help bolster the legitimacy of the CCP.

Reasonable Prices
　　From the Chinese government’s perspective, energy security is enhanced by prices that are neither too low nor too high to jeopardize its core objectives. On the one hand, the leadership wants oil prices that are low enough to maintain social stability among key constituents, including farmers, fisherman, and taxi drivers. Oil demand by these groups is relatively inelastic because their livelihood depends on driving tractors, boats, and cars.70 On the other hand, the leadership does not want prices so low that they prompt the country’s refiners to cut back their runs—creating a shortage of oil products on the domestic market and harming the very consumers that low oil prices are intended to help—and to reduce investment in additional refining capacity.
Safe Delivery of Imports
　　China does not possess the naval power projection capabilities to protect its seaborne energy imports. During the November 29, 2003 Central Economic Work Conference, Hu Jintao reportedly voiced concern about the security of the delivery of energy imports to China with his discussion of the “Malacca Dilemma,” referring to the passage of about 80 percent of China’s oil imports through the Strait of Malacca.71 There is some concern in Beijing that in the event of a Sino-U.S. conflict over Taiwan, the United States might attempt to interdict the flow of oil to China.
　　According to Yang Yi, director of the Institute of Strategic Studies at China’s National Defense University, “when I was the naval attaché at the Chinese Embassy in the United States, an American asked me how we would defend our strategic sea passages if it became necessary to do so. I said, speaking diplomatically, that the U.S., the world’s traffic cop, is very good at maintaining order and that we can go along for the ride. But, truthfully speaking, this is not reliable. If we do not have any conflicts of interest with the U.S., we can go along for the ride. As soon as a conflict occurs, however, it will be disastrous. For example, if the U.S. implements a large scale blockade or embargo in the Taiwan Strait, would we be able to withstand it?”72
　　Despite Beijing’s discomfort with its reliance on the United States Navy for safe passage of oil imports through the sea-lanes of communication, many analysts recognize that it is a longterm reality for China. In the words of one Chinese foreign policy analyst, “How long will it take China to build a navy to match the U.S.? There will be no oil (left) in the world then!”73

The Changing Energy Security Debate
　　Chinese officials and analysts recognize that the country will remain dependent on imported oil. Discussions have shifted from whether or not China should import large quantities of oil to how China can manage the risks associated with import dependence.74 Many Chinese analysts are skeptical of Western analysts’ assumption that oil will always be available on the world market—albeit at a fluctuating price—and the ensuing implication that “the best energy security money can buy is: money.” In contrast, An Fengquan of the China Petrochemical Consulting Corporation, which provides the Chinese government with advice on oil security matters, has argued the opposite: “experience proves that having money does not necessarily mean you can buy oil. “Money” does not necessarily buy China’s oil security.”75
　　The defeat of bids by Chinese oil companies for the Russian oil producer Slavneft in 2002 and the U.S. oil company Unocal in 2005 by economic nationalism, and the perception that the United States increasingly regards military power as a legitimate instrument for gaining access to oil have heightened awareness in China of the fact that both oil producing and consuming states repeatedly intervene in the world market to further national interests.76
Diversification of Import Channels
　　According to Gu Shuzhong, director of the Economic Development Research Center of the Chinese Academy of Social Sciences, “Diversity is the foundation of stability in resource supply.”77 The primary objective of the supply diversification strategy is to reduce Chinas’ dependence on the Middle East and the sea-lanes stretching from the Persian Gulf to the South China Sea. The Chinese government recognizes that the bulk of China’s imports will continue to come from the Middle East and is concerned about supply disruptions in this politically volatile region.78 The establishment of viable alternative sources of supply, such as the Central Asia and Russia, could reduce China’s vulnerability to embargoes or blockades of Middle Eastern oil supplies.

Ⅳ. Energy Security: Importance for this Research
　　Energy Security is indeed a hotly debated issue in international politics since the start of the twenty first century. Nowhere is the quest for energy security more evident than in the fierce competition for oil reserves by the United States and China. This competition has as its roots both countries pursuit to become less dependent on the import of oil and the diversification of oil import channels. The ways in which the US and China obtain their oil independency goals vary by the approaches they follow. For strategies to be successful they must be based on the preferences the actors hold and the outcomes they pursue. In reviewing the energy security challenges of the US and China in the international environment, it becomes clear that their choices are different and they expect different outcomes.
　　In Sub Saharan Africa the US and China base their preferences on national security, leadership style differences, the influences of multinational oil companies on the policy-decisions of the lawmakers, the role of oil bureaucrats and individuals. Environmental characteristics and the strategic benefits of the region, also pave the way for certain preferences over outcomes. The next chapter presents a background of the production and export capacities of petroleum states in SSA, the specific characteristics of the region and the strategic benefits of African oil for the U.S and China.














Chapter 3: Petroleum States in Sub Saharan Africa
Ⅰ. Production and Exports
　　In the following section an illustration is given in table format, showing the production and export capabilities of Nigeria, Angola, Sudan, Equatorial-Guinea, Congo-Brazzaville, Chad-Cameroon, and Gabon. The export figures to the US and China is presented in the last columns. The information presented here is important for the study under investigation for two reasons. First Sub Saharan Africa petroleum states have a direct influence on the US and China’s energy security policies, because of their dependency on oil from these regions and secondly the information presents a picture of how the U.S. and China can shape their oil diplomacy to suit their strategic interests in the region.
　　In determining the preferences and strategies of the US and China, it is necessary to consider the production and export potential of petroleum states. Because the US and China are both in a hunt for Sub Saharan African oil, and are concerned about energy security and competing for this resource, it is difficult to assess what the preferred outcomes should be and the way it should be achieved. (Preferences and Strategies) Interaction with petroleum states can give clear indications on the preferences the US and China can assume, observe or deduct.79





Figure 3.1 Map of Africa (Sub Saharan Africa Shaded)

Source: The map is retrieved from siteatlas at http://www.siteatlas.com/Maps/Maps/Africa.html.
Note: The Sub Saharan African petroleum states are Sudan, Chad, Nigeria, Cameroon, Equatorial-Guinea (an island located west of Cameroon), Sao Tome and Principe, (directly south of Equatorial-Guinea), Congo-Brazzaville, Gabon and Angola. The Gulf of Guinea states are Nigeria, Cameroon, Equatorial-Guinea and Sao Tome and Principe.
Country’s Name
Production
(thousand barrels per day)
Daily Exports
Exports to the United States Thousands barrels per day (2006)
As a Percentage of
Total Chinese
Crude Oil Imports (2006)
Nigeria
2443
2141
1114
1,3%
Angola
1435
1379
534
13,9%
Sudan
386
385
60
5,3%
Equatorial-Guinea
380
301
-
2,9%
Congo-Brazzaville
247
240
35
-
Chad-Cameroon
245
219
110
-
Gabon
237
224
60
-
Total
5373
4889
1913
23.4%
Table 3.1 Sub Saharan African Petroleum States: Production and Exports 2006
Sources: The statistics on the countries production, daily exports and exports (thousand barrels per day) to the United States were retrieved from the Energy Information Administration (EIA) at http://tonto.eia.doe.gov/country/index.cfm (August 29, 2007)
The statistics on exports to China were retrieved from China Oil, Gas and Chemicals http://www.oilandgas.cegelec.com/ (February 1, 2007)



Ⅱ. The Characteristics of Oil Politics in Sub Saharan Africa
　　The African oil industry has some distinguishable features from other oil regions of the world that are viewed with optimism or pessimism by proponents of the African oil boom. Optimists are of the opinion that the African oil boom will lead to the continent’s development as well as a crucial source of Western energy security, where pessimists view the new scramble for Africa’s oil as an effort by strong powers to promote their own interests ,compete for drilling rights and ultimately stand in the way of Africa’s development.80 The US and China as the two biggest powers competing for Africa’s oil can lead the way in finding answers for Africa’s oil problems, by introducing good governance principles, socio-economical development programmes and effective diplomacy measures.
　　The United States and other Western governments compromises with despotic rulers across the Middle East, from the Shah of Iran to the house of Saud, caused these rulers or countries to become wealthy oil monarchs, often to the neglect of the local tribes and nomadic dwellers, which are still living in poor conditions and where human rights and democratic values are misjudged.81 The clean- break exemplifies Africa’s chance to start fresh and “get it right”. It is however, not going to be an easy task for the following reasons.
　　First, Africa is filled with so-called “failed” states, or states that teeter perpetually on the edge of disaster, one disputed election away from outright conflagration. Illicit arms are traded across fluid, largely fictional borders, national sovereignty is little more than a collection of flags and anthems, ethnic tribalism is alive and well and angry militias have already turned to stealing crude oil as a way to keep themselves in business. According to the National Maritime Institute, the Gulf of Guinea is the world’s most dangerous waterway.82 Second, Human-rights campaigners warn that many of the fatal compromises that were made with undemocratic and unpopular rulers in the Middle East are being repeated all over Africa, with potentially catastrophic consequences. All of this because of the greed of Washington strategists and western oil lobbyists to form alliances with new petro states in order to keep the oil flowing to their countries.83 This has led to petrostates exercising authoritarian control over their oil revenues that has sparked violent conflicts, with already bitter divisions exacerbated by the promise of untold riches for the victor.
　　Third, a growing body of evidence suggests that oil, far from being a blessing to African countries, is a curse. Scholars have dubbed this phenomenon, which depends on a curious matrix of economic and sociological responses to a sudden influx of petroleum money, the “paradox of plenty” or the “resource curse”. One of the greatest scandals of the African oil boom, for example, is that it has produced far more jobs in the US and Europe than it ever will in Africa.
　　Oil exploration is by nature capital-intensive rather than labor-intensive, meaning that most investment goes to developing and operating expensive and sophisticated hardware, such as the multimillion-dollar floating production, storage and offloading vessels (FPSO’s) that have popped up along the African coastline.84 Oil and gas are Africa’s largest export category, three and a half times greater than all others put together. The American charity Catholic Relief Services85 “conservatively” estimates that $200 billion in oil revenue will flow into the coffers of African governments over the next decade. All this, it is argued, makes it more important than ever for African governments to “get it right” and ensure that oil is allowed to be a blessing rather than a curse for their long-suffering people.
　　Fourth, Others, of course, sees Africa’s oil boom as simply a century old story of foreign exploration and the subjection of Africa’s people at the mercy of voracious commercial interests-a second great “Scramble for Africa”, after the original carve-up of the African continent by European powers in the late nineteenth century? China, especially has shown that it is prepared to plunk down large cash incentives in the form of loan guarantees in exchange for lucrative oil concessions from African countries.86
　　Production from sub-Saharan Africa has the potential to reach 7 million barrels per day by 2010. However, oil production in Africa has been shut-in at times due to ongoing instability.87 Often this instability occurs when inhabitants of a resource-rich region believe that the riches generated by the country’s oil industry have eluded them due to the corruption and incompetence of government officials. Petroleum states should work to ensure that the benefits of oil and gas development are managed in a transparent manner by supporting and participating in the Extractive Industries Transparency Initiative (EITI).88
　　Energy security principles will be difficult to implement and uphold if directives that serve as a basis for meaningful, significant cooperation are lacking. The initiatives strengthen poor countries governance of global issues and present them with mechanisms to enforce control, for example in allocating foreign investments and the managing thereof. It is necessary to clear up any confusion that may arise in oil producing countries management of funds, allocation of investments and bad governance. Since 1990 alone, the petroleum industry has invested more than $20 billion in exploration and production activity in Africa. A further $50 billion will be spent between now and the end of the decade, the largest investment in the continent’s history – and around one-third of it will come from the United States.89
　　Three of the world’s largest oil companies- the British-Dutch Petroleum consortium Shell, France’s Total and America’s Chevron are spending 15 percent, 30 percent and 35 percent respectively of their global exploration and production budgets in Africa. Chevron alone is in the process of rolling out $20 billion in African projects over a five-year period.90 The overwhelming majority of this new drilling activity has taken place in the so-called “deep water” and the “ultradeep” of the Gulf of Guinea, the roughly 90-degree bend along the west coast of Africa that can best be visualized as the continent’s armpit. Its littoral zone passes through the territorial waters of a dozen countries, from Ivory Coast in the Northwest down to Angola in the south and a good deal of its geology shares the characteristics that have made Nigeria a prolific producer for decades.91

Ⅲ. The Strategic Benefits of African Oil
　　What makes the SSA oil boom interesting to energy security strategists in both Washington and Beijing, is a series of serendipitous and unrelated factors that, together, tell a story of unfolding opportunity. First, West African oil and gas tend to be light and sweet – ideal for refining into motor fuels – and it lies right on the shore, a straight sail across, or up the Atlantic to American and European refineries.92
　　Second, the geographic accident of Africa being almost entirely surrounded by water, which significantly cuts transport costs and risks to the European, American and Asian markets makes imports from Africa more appealing. In West Africa, there is no imminent danger of attacking at the high seas by pirates, although in recent years Nigerian rebels have tried to block tankers from leaving ports and small-scale attacks have occurred in the Gulf of Guinea. The geographic accident of West African sea-lanes provides quick, cheap delivery, so there is no need to worry about the Suez Canal, for instance, or to build expensive pipelines through unpredictable countries.93 Oil is simply loaded onto a tanker at the point of production and begins its smooth, unmolested journey on the high seas, arriving just days later in American ports or a few days later at Chinese ports.
　　A third advantage, from the perspective of the oil companies, is that SSA offers a tremendously favorable contractual environment. Unlike, in say, Saudi Arabia, where the state-owned oil company Saudi Aramco has a monopoly on the exploration, production, and distribution of the country’s crude oil, most SSA countries operate on the basis of so-called production-sharing agreements, or PSA’s. In these arrangements, a foreign oil company is awarded a license to look for petroleum on the condition that it assumes the up-front costs of exploration and production.94
　　Yet another strategic benefit, particularly from the perspective of American politicians, Is that, until recently, with the exception of Nigeria, none of the oil-producing countries of Sub Saharan Africa had belonged to the Organization of Petroleum Exporting Countries (OPEC). But probably the most attractive of all attributes of Africa’s oil boom, for Western governments and oil companies alike, is that virtually all the big discoveries of recent years have been made offshore, in deepwater reserves that is often many miles from populated land.95
　　This means that even if a civil war or violent insurrection breaks out onshore (always a concern in Africa), the oil companies can continue to pump out oil with little likelihood of sabotage, banditry or nationalist fervor getting in the way. Finally, there is the sheer speed of growth in African oil production and the fact that Africa is one of the world’s last underexplored regions.96 One third of the world’s new oil discoveries since the year 2000 have taken place in Africa. Of the 8 billion barrels of new oil reserves discovered in 2001, 7 billion were found there. In the years between 2005 and 2010, 20 percent of the world’s new production capacity is expected to come from Africa.97
　　Sub Saharan Africa is indeed a promising area for future oil supplies to the United States and China, characterized by its own production capacities and export potential. A result of the increasing demand by the U.S. and China for SSA oil is that petroleum states can up their production output in order to generate more foreign income from oil sales. In this regard, economical injections and corporate strategies are helpful measures to increase productivity and export trade ability. The next chapter looks at the U.S. and Chinese oil interests in SSA and their respective oil diplomacy measures. Important policy measures are the U.S. focus on good governance, transparency and maritime security strategies and China’s emphasis on state sovereignty and “non-interference” in domestic affairs. Special attention is paid to China’s benefits from Sudan and Angola.














Chapter 4: The United States and China’s Oil Interests in Sub Saharan Africa
Ⅰ. The Strategic Significance of Sub Saharan African Oil to the United States
　　High levels of exploration and production investment in Nigeria and Angola, along with significant growth in other countries along West Africa’s Gulf of Guinea, have transformed the region into a strategic supplier of crude oil, and prospectively also of natural gas, to the U.S. and global energy markets. The region’s current sixty billion barrels of proven reserves may appear small compared to some of the Middle East oil giants, but the global energy market is such that rising midrange producers like Nigeria and Angola today are increasingly critical to the reliability of supply and stability in global oil prices.98
　　Investment by foreign companies in the Gulf of Guinea energy sector is already substantial, $50 billion in this decade. This figure is likely to grow considerably over the next decade as new offshore discoveries of oil are brought into production, generating two to three million barrels per day in new crude oil production, and as West Africa becomes a new major global exporter of natural gas.99
　　The Gulf of Guinea’s acute vulnerability to instability and disruption stems from corruption, weak governmental structures, limited regional integration (especially in the maritime sphere), the presence of large criminal syndicates based in Nigeria, organized mercenary groups able to project themselves from South Africa and into the Gulf of Guinea, the threat of armed insurgency in Nigeria’s Niger Delta, the possibility of radical Islamist action rooted in northern Nigeria or the Sahel, and the potential instability of several autocratic governments.100 In the past, petroleum operations in West Africa have weathered instability and turmoil. Oil imports continued to flow even during the worst excesses of the military regime of Nigeria’s Sani Abacha and through Angola’s three decades of bloody civil war.101
　　But the nature and context of U.S. engagement in Africa have changed fundamentally, and commercial investment in the oil sector operates in an environment where powerful nongovernmental groups, focused on human rights, transparency, and environmental management, command the attention of shareholders, the media, policymakers, and members of Congress. The Center for Strategic and International Studies (CSIS) concluded a report in 2004 that heightens the increasing need for US diplomatic efforts in the Gulf of Guinea region.102
　　The key elements of the report promoted greater transparency in the use of Africa’s oil wealth, especially governance in Nigeria and Angola, but also in three small states experiencing substantial growth of oil production, Chad, Equatorial-Guinea and Sao Tome and Principe. As these states add 2-3 million barrels per day to world markets in the next five years, their oil earnings will skyrocket. Nigeria is estimated to earn over $110 billion between now and 2010, Angola over $43 billion.103 These are staggering figures by any measure. When set against the legacy of corruption and mismanagement of these and other African producing states, these figures are potentially destabilizing.
　　The report found that the Gulf of Guinea, as a small pool of African oil producing states are of rising vital importance to U.S. energy security.104 Two important core assertions were drafted from the report elements. The first, core assertion, is that there is indeed an urgent need for a coherent U.S. strategic energy policy to fill the gap that exists today. Such a strategy needs several key elements. It must be long-term, it must be built upon sustained partnerships with African counterparts, and must feature a two-pronged, regionally coordinated approach. It needs simultaneously to address both serious deficiencies in the internal governance of key African oil-producing states at the same time that it systematically addresses the shared, external security threats these states face.105
　　Improved internal governance fundamentally calls for enhanced diplomatic engagement to promote transparency and accountability in the use of a producing country’s wealth, including respect for human rights and democratic process, and ensuring that oil revenues are tied to sustained and equitable economic growth. Regional security fundamentally calls for heightened engagement by U.S. intelligence and military institutions, under the guidance of overall U.S. foreign policy, to strengthen maritime security and meet other threats, especially in northern Nigeria.106 In this regard the U.S. should introduce a set of reinforcing bilateral policies with special application to the Gulf of Guinea.

A Gulf of Guinea maritime security strategy
　　A glaring vulnerability in the Gulf of Guinea is the lack of effective control over its maritime and coastal environment. This has encouraged levels of piracy unrivalled in Africa (and in global terms, second only to the Malacca Straits in Southeast Asia.) It invites illicit trafficking in weapons and drugs, illegal immigration, and terror attacks against an energy infrastructure that was constructed with no serious sabotage threat in mind. Short-term benefits can be quickly realized, in curbing piracy and the bunkering of oil, improving the oil production environment, deterring terror and sabotage, and protecting American citizens and property.107 The cost of such programs is not prohibitive, particularly if the effort is effectively multilateralized and costs shared with host governments, European allies, and oil corporations.
　　Major gains can be achieved with an annual U.S. government investment of $10-20 million. A number of Gulf coastal countries have signaled their strong interest in building their maritime security capacities in collaboration with the United States, most notably Sao Tomé and Principe, Nigeria, and Equatorial Guinea. The Second core assumption, a special bilateral priority needs to be assigned, in any U.S. strategy, is to address the central importance of Nigeria and Angola in the Gulf of Guinea. What transpires there in the near and medium term, with respect to both governance and security, will be decisive to the future of the Gulf. Developments in Nigeria and Angola and specific measures that need to be taken to make the U.S. approach to these two countries more comprehensive, dynamic, and effective is a vital concern to secure energy stability in the Gulf of Guinea region and to protect U.S. energy security.108
　　Despite major U.S. oil investments in Nigeria and enduring U.S. interests in counterterrorism, democracy, transparency in the use of oil wealth, and regional stability, the United States at present is ill equipped to shape events in Nigeria. Quick action is needed to correct that reality. It remains dangerously on the edge of disorder, emerging from years of misrule. At the same time, Nigeria’s leadership is advancing experimental, bold reforms in the management of Nigeria’s oil wealth.109 Given Nigeria’s sway in the region, and the stark risks and alluring opportunities it presents, Nigeria should be the top country focus of any U.S. strategy that aims to advance U.S. national interests in the Gulf of Guinea.
　　Since the end of the Angolan civil war, building cooperation and consensus between the victorious government and a debilitated National Union for the Total Liberation of Angola (UNITA) has proven slow and difficult. Talks over constitutional reform, electoral laws, and oversight arrangements are proceeding slowly. At present, elections are slated for 2006, though a precise date has not yet been set. Failure to hold elections in 2006, after repeated earlier delays, would cast a shadow over the government’s stated commitment to the democratic process. When national elections do occur, it is likely a full fifteen years will have passed since the first (and only other) democratic election in Angola’s tortured history.110 Internally, the climate within Angola has improved somewhat.
　　Independent Angolan monitoring groups are able to function, the judiciary has been used less frequently to repress and intimidate dissent and Protestant and Catholic clergy have become far more active in lobbying for reconstruction, accountability, respect of human rights, and attention to easing the abject poverty of most Angolans. Reform in the management of Angola’s oil wealth is centered, as it has been for years, on Angola’s dialogue with the International Monetary Fund (IMF). The entry of the Chinese, who agreed in 2004 to a $2 billion low-interest, long-term facility for reconstruction, coupled with high oil prices, has made reaching an agreement with the IMF more difficult. The United States currently receives 4 percent of its oil imports from Angola.111

Major Threats to the Gulf of Guinea’s Viability
　　Perhaps the most immediate threat to U.S. interests in Africa’s oil producing states emanates from The Niger Delta region, where organized crime syndicates operate a major crude oil theft operation with alleged partners in regional refineries.112 Well-armed and increasingly well-financed militias back these criminal networks. And the militias have begun to operate with greater autonomy and skillfully exploit ethnic and economic grievances to muster popular support. Estimates of the level of this theft range from 70,000 to 300,000 barrels per day. With current prices in the $60 per barrel range, even the low estimate of 70,000 would generate over $1.5 billion per year, ample resources to fund arms trafficking, buy political influence, or both.113
　　In a May 2005 visit with President Bush, Nigerian President Olusegun Obasanjo explicitly asked the United States for assistance in curbing money laundering, arms trafficking, and illegal oil sales The United States and Nigeria announced an agreement along these lines in December 2005.114 But the progress to date also reveals troubling aspects of the problem. The prosecutions confirm suspicions that oil theft activity infiltrates the highest echelons of the Nigerian navy and possibly similarly ranked officials in other parts of the Nigerian government. Enforcement has been mixed.
　　There is also awareness that while oil theft has armed and politicized the Niger Delta, it has also generated significant cash wealth that has been used by authorities at the federal and state levels to keep the Delta under political control. While Nigeria seems to be taking oil theft more seriously, it is hampered by a lack of technical capacity and the absence of an effective political strategy. U.S. naval experts estimate that Nigeria could put in place the necessary surveillance equipment and training to detect oil theft, intercept offenders, track vessels, and maintain security in their ports for a cost of $100 million. Nigeria and other countries, which are likely recipients of stolen crude oil for their refineries, do not share intelligence in a way that would facilitate interception. There is clearly room for security assistance to combat oil theft and to facilitate training for a regional interdiction capability.115
　　In addition, the United States has deep experience with international coordination and assistance to combat money laundering and other financial crimes. The threat of terrorist attacks in West Africa against U.S. or Western interests is real, although assessments vary widely on the precise level and nature of the threat. In 2004, threats against foreign oil workers by self-styled Nigerian Delta warlord Alhaji Dokubo-Asari drove world oil prices skyward.116 Though Asari is currently under arrest, his supporters are threatening further violence if he is sentenced harshly.
　　Concern over Islamist-inspired terrorist threats focuses principally on Nigeria’s northern region. Some analysts fear that indigenous groups, supported by radical Islamist groups following Osama Bin Laden’s exhortation in early 2003 to focus on Nigeria, might seek to exploit rising discontent with the government in Abuja and its close ties with the West, and possibly make largely Western-owned oil infrastructure a soft target for attack.117

Political Instability
　　U.S. engagement to address the threat of instability will require an expanded and more robust diplomatic presence in each of the target countries. Political stability will however not be easily reached, since oil producing countries have a culture of bad governance which cannot be rectified overnight.118 Time and patience is necessary if the U.S wants to impose better governance structures that will improve oil relations and produce an efficient oil functioning system. Since petroleum states are plagued by corruption and mismanagement of oil revenues, it may take years for programmes to have successful rewards. One of the aims of the U.S should be to better understand the needs of leaders and civilians and then arrange their policy directives around these needs.119 To implement unilateral, self-interested policy programs won’t lead to the eradication of political instability, but will instead widen the gap that exists between leaders of oil states and the U.S government.

Smaller States
　　Promoting enduring democratic reform and stability in Equatorial Guinea, Gabon, São Tome´ and Principe, Cameroon, and Chad is no less difficult. The Nguema family has ruled Equatorial Guinea, a country of 535,000 people, since independence in 1968.120 There have been reports of continued coup plotting in 2005 involving mercenaries recruited out of the Niger Delta. Equatorial Guinea has risen in a short time to be West Africa’s third largest crude oil exporter. With nearly $5 billion invested to date, ExxonMobil, Amerada Hess Corporation, and Marathon Oil are major U.S. investors.121 This amount may double over the next five years. The country remains vulnerable to external coups due to its lack of defense capability, such as police, coast guard, or military.
　　The United States has criticized the Equatorial Guinea government for human rights violations, failure to invest in social spending, and person trafficking. Sustained U.S. efforts will be needed to encourage an open political space, now largely absent, for nongovernmental groups to operate. In São Tome´ and Principe, there is a fledgling democratic system with a record of tolerance, but it remains highly fragile and prone to periodic breakdown. Government capacity, for all its intentions, is remarkably thin.122 Its oil sector and overall national governing system operates very much in the shadow of Nigerian influence.
　　Beginning in 2003, popular anticipation of future oil wealth, fueled by the first bidding round and signing bonuses for the offshore blocks managed jointly with Nigeria, intensified interparty rivalry and tensions, triggering a mercenary-led mutiny and coup attempt that was reversed following intervention by President Obasanjo and others. Since that time, the country has passed through successive internal upheavals. It is unknown how much offshore oil wealth São Tome´ possesses: estimates vary between four and ten billion barrels. The country will remain a choice target for adventurers, and the management of wealth streams will remain a formidable internal challenge.123
　　In Chad, the newly completed Chad-Cameroon pipeline scheme provides the basis for an important Revenue Management Program. This program is a partnership that joins the Chadian government, NGOs, the World Bank, and major oil company investors to provide oversight for the disbursal of oil revenues, and earmarks monies for education and health. Crude oil began flowing in 2004, and thus far this scheme has functioned reasonably well.124 Nonetheless, Chad remains fundamentally unstable; its autocratic government resists pressures for democratic reform and is vulnerable to recurrent coup plotting within the security services. Continued strife along its border area with the Darfur region of Sudanhas also aggravated instability within the Chadian government. A sign of trouble is the Chadian President Idris Deby’s recent proposal to divert more of the oil proceeds to security and less to social investments.125

Ⅱ. China’s Oil Interests in Sub Saharan Africa
　　David Zweig and Bi Jianhai noted in the September/October 2005 issue of Foreign Affairs, ‘‘an unprecedented need for resources is now driving China’s foreign policy.’’126 China, now the world’s second largest importer of oil, accounts for 31 percent of global growth in oil demands. China imports 28 percent of its oil from Africa, mostly from Angola, Sudan, and Congo.127　According to Taylor it is argued that Chinese oil diplomacy in Africa has two main goals: in the short-term to secure oil supplies to help feed growing domestic demand back in China; and in the long-term, to position China as a global player in the international oil market.128 Yet at the same time, this oil safari is being accompanied by an explicit stance that emphasizes state sovereignty and ‘non-interference’ in domestic affairs.
　　A Chinese commentary asserted that “as more African countries improve political stability and make headway in economic growth, the continent’s nations will have more say in international affairs”. Beijing seems to see this as to their advantage as it is repeatedly asserted that China and Africa share “identical or similar opinions on many major international affairs as well as common interests”129
　　Indeed, it has become common amongst Chinese policy speeches to emphasize the commonality of experiences that link China and Africa together, including perceptions of historical oppression by the West and the similar levels of economic development. The no-questions-asked policy is indeed coming under greater pressure from observers both external and internal to Africa. And Chinese responses have been getting both more defensive and also, contradictory. Thus for instance on the one hand Wang Yingping of the China Institute of International studies will assert that “Chinese businesses pay greater attention to protecting the environment when building factories and exploring for Africa’s rich reserves in oil, ore and non-ferrous metals”130
　　Yet on the other, an official Chinese publication will quote, without comment, the assertion by Sierra Leone’s Ambassador to China that “The Chinese just come and do it. They don’t hold meetings about environmental impact assessments, human rights, bad governance and good governance. I’m not saying it’s right, just that Chinese investment is succeeding because they don’t set high benchmarks”131The failure of China to set high benchmarks is now a common cause for complaint among African states.

Perspective from Beijing
　　According to ZhongXiang Zhang, a senior researcher at the East West Center in Hawaii, China’s oil diplomacy in Africa has been roundly criticized in Western governments for the wrong reasons.132 Beijing has been building goodwill by strengthening bilateral trade agreements, awarding aid and forgiving national debt. Chinese investments in oil fields in African countries help to pump more oil out of the fields and enlarge the overall availability of oil on the world market.133
　　Partly because the Western powers have gained control over best oil fields available, as a late entrant to the international oil game, China has little choice but to strike deals with the so-called rogue states, which are identified by the U.S., to secure oil supplies. Washington increasingly perceives that Beijing’s ties to these countries undermine the U.S. goals of isolating or punishing rogue states that fail to prompt democracy, limit nuclear proliferation or respect human rights. Although it is unlikely to bring the two countries in direct confrontation, China’s practice of oil diplomacy is widely perceived in Washington as attempts to threaten U.S. security interests because Beijing strikes deals either with rogue states that Washington has tried to marginalize or in America’s backyard which h Washington perceives as its turf and within its traditional sphere of influence.134
　　Washington perceives that recent forays by Beijing into the Western Hemisphere, which are part of Beijing’s global search for large supplies of oil-based energy, as challenging its influence. Beijing aggressively pursuing this type of oil diplomacy without proper consideration of the international community’s concern may benefit China in the short-term, but may hurt it in the longer term, reducing its future benefits. China has achieved its own rise and close to being integrated into the global economy and norms. Given that China will not possess large-scale oceangoing naval capabilities in the near future, it must depend on the global economy and norms. Thus, it is in China’s own long-term interest to support the stability of the international regimes. For the time being, Beijing should think deeply.135

China’s Benefits from Sudan and Angola
　　Sudan is a special case because it illustrates how China can benefit from Western concerns over terrorism and human rights.136 Since the late 1980s, U.S. concerns over Khartoum’s tactics in the war against the south and its ties to terrorist groups persuaded many Western oil companies to withdraw from Sudan. Although Chevron had invested $1 billion in exploration that confirmed more than one billion barrels of proven reserves, in 1989 the company sold its shares back to the government of Sudan.137
　　In 1998, the CNPC’s construction arm participated in building a 930-mile long pipeline from those oil fields to the Red Sea. It also built a refinery near Khartoum. At one point, China had 10,000 laborers in Sudan to complete CNPC projects. China also controls most of an oil field in southern Darfur, and 41 percent of a field in the Melut Basin. Another Chinese firm is building a pipeline from that field to Port Sudan, where China’s Petroleum Engineering Construction Group is constructing a $215 million export tanker terminal. China now gets 7 percent of its oil imports from Sudan.138
　　Military cooperation has also grown. Chinese weapons deliveries to Sudan have included ammunition, small arms, towed howitzers, anti-aircraft guns, anti-personnel and anti-tank mines, tanks, helicopters, and fighter aircraft. China also helped establish three weapons factories in Sudan, including one for assembling T-55 tanks.139 There are also an undetermined number of Chinese military personnel stationed in Sudan to secure its investments. China has sold the Islamic government in Khartoum weapons and $100 million worth of Shenyang fighter planes, including twelve supersonic F-7 jets, according to the aerospace industry journal. Experts say any military air presence exercised by the government—including the helicopter gunships reportedly used to terrorize civilians in Darfur—comes from China.140
　　These activities have taken place while Sudan was under sanctions from the United States and several European countries, and in the midst of civil war and genocide in Darfur. As the Darfur crisis worsened in 2004, China used its position on the UN Security Council to dilute repeated resolutions on the crisis, preventing almost any mention or threat of sanctions against the Sudanese government. Only in March 2005, when world opinion focused on Darfur, did China abstain from voting on a Security Council resolution that referred the possible war crimes and charges of genocide there to the International Criminal Court (ICC) and set in motion a UN study of possible sanctions.141 The Security Council has not placed sanctions on Sudan.

Angola
　　China's relations with Angola have traditionally been friendly due to the fact that both countries were and still are ruled by Marxist Leninist regimes, but until recently China's presence in the country was rather insignificant. From a marginal position in Beijing's foreign policy priorities, Angola has moved to the forefront of China's foreign relations.142 Today, Angola is China's most important partner on the African continent. Angola's importance lies in the fact that it is the second-largest oil producer in Africa and is home to one of the world’s largest diamond fields and other precious stones such as rubies and emeralds.143
　　In 2004, Angola became China's largest supplier of crude oil on the African continent. At the global level, Angola is China's third-largest source of oil imports just behind Saudi Arabia and Iran. Taking into account that there are many unexplored oil fields in the country, Angola's importance in meeting China's insatiable demand for raw materials is likely to increase. For instance, between January and March 2006, Angola became China's number one oil supplier temporarily, exporting 456,000 barrels a day to China, accounting for 15 percent of its total oil imports and surpassing Saudi Arabia.144
　　On May 10, 2006, Angola's state-owned oil company Sonangol and China's Sinopec launched a US$2.2 billion joint bid for blocks 17 and 18; these new blocks have estimated reserves of 3 billion barrels and 1.5 billion barrels respectively. These new blocks are likely to move Angola from the position of third-largest oil supplier to China to that of number two on a long term basis. Since energy security has become a pressing concern for the Chinese leadership, Beijing has embarked on a strategy to enhance its influence and presence in Angola and position itself as its number one partner. In 2005, Chinese Vice- Premier Zeng Peiyan visited Angola bearing gifts. These gifts included a $6.3 million interest free loan and a pledge to invest $400 million in Angola's telecommunications sector, and $100 million to upgrade the Angolan military's communication network.145
　　China's energy security strategy, with its preference for securing oil at the source by aggressively acquiring oil and gas concessions through the third world, may tempt Beijing to use its increasing influence to monopolize oil supplies and shut off potential rivals, particularly in times of high oil prices. A sign in that direction came in March 2004 when the Chinese government granted Angola $2 billion in soft loans in exchange for a commitment from Luanda to ensure continuous supplies of crude oil to China.146 Beijing's relaxed loan policies are further increasing China's grip over Angola, while at the same time reducing the ability of the US to influence local developments.
　　China’s neglect to abide by the principles of transparency in financial affairs can be seen in the following example. The elites in Luanda (an oppressive, dictatorial regime by any standards) are deeply appreciative of China’s “non-interference” stance. Over the last couple of years, Angola’s government, in need of reconstruction funds after the civil war, has been in the midst of negotiating a new loan with the International Monetary Fund (IMF). Because of Luanda’s malgovernance, the IMF was determined to include transparency measures to curb corruption and improve economic management. However, as the IMF pressed for agreement, the Angolan government suddenly stopped negotiations. The reason for this was that Luanda had received a counter-offer of a $2 billion loan from China’s export-credit agency, Exim Bank.147
　　The deal came with an interest rate repayment of 1.5% over 17 years and was tied to an agreement to at first supply 10,000 barrels per day of crude oil, to increase later to 40,000 barrels per day, as well as the award of substantial construction contracts.148 This provoked consternation within Angola’s nascent indigenous business sector as, as Angolan economist José Cerqueira put it, ‘There is a condition in the loan that 30% will be subcontracted to Angolan firms, but that still leaves 70% which will not. Angolan businessmen are very worried about this, because they don’t get the business, and the construction sector is one in which Angolans hope they can find work’.149 Thus the real cost of the loan is higher than that suggested by the published rates as non-Chinese suppliers are excluded, which will negatively affect the prices of goods and services imports.
　　But perhaps more critically, none of the IMF’s conditionalities regarding corruption or graft were included in the loan’s details, enabling Luanda to overcome the refusal by Western donors to bankroll a Donor’s Conference until Angola had reached agreement with the IMF and concluded a Poverty Reduction Strategy Paper.150 The big danger is that China’s rapidly developing relationship with Angola allows the elites in Luanda to continue to be corrupt and ignore governance norms—all in the name of “non-interference” in domestic affairs—a discourse that China assiduously promotes.
Relations with Other Oil Producers
　　In July 2005, China and Nigeria signed an $800 million crude oil sale agreement, setting in motion China’s purchase of 30,000 barrels a day for five years. Much more significant is that China is expected to win a license to operate four oil blocs in Nigeria, following an agreement to build a hydropower station and take over a privatized Nigerian oil refinery, a money-losing proposition that no Western company was likely to have touched.151
　　The oil blocs on whom it is bidding on are in contested areas of the Niger Delta region, where insurgency, banditry, and the stealing of oil are endemic. China may lose considerable amounts of money on the refinery, but it will retain a significant foothold in the Nigerian energy sector.152 China’s willingness to invest where the United States and private Western companies are unwilling to go adds to its attraction to African governments. China is also seeking exploration and development rights in Ethiopia, along the Nigerian-Chad border, and in a number of other countries. In each case, China accompanies its search with investments, infrastructure projects, arms sales, or at least some aid. While favoring Ethiopia, China managed to send arms to both Ethiopia and Eritrea during their 1998 war.153
　　US-Sino oil diplomacy in SSA follows different paths, as is evident from the above discussion. Because both countries arrived relatively late on the oil scene in this part of Africa, were not previous colonial masters and had limited strategic ties with petroleum states, SSA presents new challenges to the U.S and Chinese governments in their quest for oil. Engaging in diplomatic talks broaden oil horizons and establish measures along which oil security is negotiated. From the perspective of increasing oil imports and acquiring new exploration and drilling licenses, oil diplomacy is vital for sustaining negotiations on a continuous basis. But for diplomacy to be an effective tool, the U.S and China need to formulate preferences or policy beliefs. And this is what the next chapter set out to achieve, investigating the policy beliefs of the U.S and China and the way it contributes to effective oil diplomatic measures.
Chapter 5: A Strategic-Choice Approach: The Preferences of the United States and China
Ⅰ. The US and China’s Preferences
　　Before the turn of the century the US and China’s preference thinking regarding Africa was greatly influenced by ideological thinking. The contest between establishing democracy or communism in Africa was evident of US-Chinese intervention on the African continent. The US followed liberalization policies to free oppressing regimes from authoritarian, communist rule, while China viewed Africa as an open domain to introduce its socialist-marxist ideology. A result of these opposing preferences by the US and China was that African countries were introduced to different ideological doctrines, which laid the foundation for African countries to establish their own state goals. Hostility of certain petroleum states toward cooperation with either the US or China, favoring the one state above the other because of ideological and economical preferences, domestic conflict in Nigeria, violations of human rights in Sudan, the war on terror in conjunction with Muslim extremism and the general poor living and health conditions in SSA, are factors that limit the American and Chinese governments to implement successful strategies.
　　On the other hand, the US and China can certainly benefit from the individual preferences of state leaders and actors in the oil industry, for example the goals of multinational oil corporations and the individual beliefs of business leaders contribute to the formulation of a national grand strategy for SSA.
　　In analyzing the strategic interest of the US in the SSA oil setting, the ideological preference of the US to promote democracy and good governance in African countries, is a condition when strategies based on democratic principles are to be devised. Oil is where you find it. Oil companies cannot always invest in democratically governed countries. It would be ideal if it could be guaranteed that the head of an African country where a U.S. oil company invested was, in fact, an advocate of democracy and always respected human rights. Unfortunately, that is not a realistic expectation in today's Africa or in most other oil producing regions of the world. It is important to urge and cajole and to nudge the leaders of the oil producing countries towards establishing inclusive democracies and good governance.154 This is the task of U.S. diplomacy. In Sudan the US government is supporting the initiatives of the Extractive Industries Transparency Initiative (EITI).155
　　The Extractive Industries Transparency Initiative (EITI) supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining. Benefits for implementing countries include an improved investment climate by providing a clear signal to investors and the international financial institutions that the government is committed to greater transparency. EITI also assists in strengthening accountability and good governance, as well as promoting greater economic and political stability.
　　This, in turn, can contribute to the prevention of conflict based around the oil, mining and gas sectors. Benefits to companies and investors centre on mitigating political and reputational risks. Political instability caused by opaque governance is a clear threat to investments. In extractive industries, where investments are capital intensive and dependent on long-term stability to generate returns, reducing such instability is beneficial. Transparency of payments made to a government can also help to demonstrate the contribution that their investment makes to a country. Benefits to civil society come from increasing the amount of information in the public domain about those revenues that governments manage on behalf of citizens, thereby making governments more accountable.156
　　Countries that underwrite the initiatives and programmes of the EITI have preferences towards establishing good governance principles in countries that depend on the extraction of natural resources and to eradicate the exploitation of these resources. Initiatives that seek to promote good governance principles can only be successful if the supporting countries maintain these same good government principles at home. The SSA oil strategic setting allows for many actors, whether they are governmental institutions, non-governmental institutions, non-state actors or individuals, for example the residents of the Niger delta and Southern Sudan and the multitude of multinational oil corporations (MNC’s), to formulate their own goals and pursue unique strategies.
　　Environmental constrains, however, for example transportation difficulties and inaccessibility of areas in the Niger Delta, further accentuates the problem actors experience to reach solutions on common grounds. And then there are religious divisions between Muslims and Christians, ethnic conflict between the different tribes living in the Niger Delta, the self-interested or ambitious goals of multinational oil corporations and instability in the central government. These factors are all having an immoralising effect on the negotiation process. Rebel groups operating from the Niger Delta, some which pursue their own agendas and others, which are in unison with the goals of religious and ethnic groups, are at the moment taking the main stage in setting preferences for Niger Delta peace talks. The movement for the emancipation of the Niger Delta (MEND) can be cited as a group that has extremely hostile feelings toward the presence of foreign and in particular western oil companies.157 In a January 2006 MEND warned the oil industry, "It must be clear that the Nigerian government cannot protect your workers or assets. Leave our land while you can or die in it. Our aim is to totally destroy the capacity of the Nigerian government to export oil.”158 One can assume from this statement, that MEND has a preference for the protection of their land from foreign invasion. They voice strong, emotional concern over foreign oil workers occupying their land and will take extreme measures expelling these oil workers from their land. If they really are interested in finding solutions to the ongoing delta conflict is an open question.
　　Their findings are that anti-government groups, supporting the goals of Muslim extremists and anti-western lobbysists are greatly responsible for the chaos and anarchy characterising the situation in the delta. Accusations that western oil companies are destroying the natural habitat of certain fish populations and responsible for the ethnic conflict are treated with contempt by oil companies such as Shell and ExconMobil,159 both which invested heavily in the Nigerian oil industry. Oil operations of these companies are conducted in harmony with the natural environment and that one of their missions is to protect the Niger delta from over-exploitation and unnecessary polution. It is all a question of respecting the rights of citizens living in the area and caring about the natural environment, an aspect that is neglected by foreign oil companies operating in the Delta. In making a final analysis regarding the preferences of the actors in the Nigerian conflict, it is of utmost importance that common ground has to be found between the actors.
　　An environment where actors pusue harmonious interests will be beneficial to all.As long as the local residents view foreign oil workers as intruders on their land, pursuing ambitious, self-interested goals and not ploughing back some of their revenue into local community development programmes, the chances are small that a final solution the conflict will be reached. If one or both of these powers can accept the role of mediator, laying down guidelines for further negotiations, the negotiation process will enjoy a substantial boost.
　　This mediating role will not only help the conflicting parties, but will in effect put the concept of energy security on the negotiating table. On the other hand, for parties to commence a mediating role, they should have an unbiased attitude toward the conflicting parties. Both these countries have strong and clear intentions to use oil diplomacy to their own benefit and manipulate the results in the SSA oil strategic setting. In SSA, the US with its newly proposed African command center (Africom) is set out to achieve military dominance on the African continent and establish military strategic partnerships with petroleum countries.
　　Nigeria, Sao Tome and Principe and Angola along the west coast of Africa are the main hotspots for US and Chinese oil interests. Nigeria is the biggest exporter of oil in the region and in the last 5 years had allocated valuable oil drilling licenses to US and Chinese oil companies. Nigeria already supply in the oil needs of these two giants, especially to the US. Oil deals have been allocated by the Nigerian government to the US in the last 5 years and are expected to grow. Sao Tome and Principe and Nigeria160 signed a milestone contract to give a consortium led by the US based oil company, ChevronTexaco rights to drill in the two countries' shared Gulf of Guinea oil exploration zone. China has secured four oil-drilling licenses from Nigeria in the last three years. In exchange China will invest $4bn (£2.25bn) in oil and infrastructure projects in Nigeria.161
　　Nigeria, Africa's top oil exporter, has long been viewed by China as a partner. From the recent contracts allocated by the governments of Nigeria and Sao Tome and Principe to US and Chinese based oil companies, it becomes clear that US-Sino oil diplomacy in SSA focus on establishing long-lasting relationships.162 The giant Chinese state-owned China National Offshore Oil Corporation, CNOOC, has reached a deal to buy a 45 percent stake in a Nigerian oil field for more than $2 billion. The purchase, if approved by both governments, would be China's first major venture into oil-rich Nigeria. Analysts say the Nigerian bid will not be easy for CNOOC, which has no experience in dealing with Nigeria - a country rated as a difficult place to do business.
　　The international anti-corruption group Transparency International ranks the country as the sixth most corrupt nation in the world. The American oil company Chevron did not bid on this block and that would imply they didn't believe the values were there," he said. "So this is certainly a hurdle which CNOOC will have to overcome. Chinese and Nigerian governments will sign two important agreements: one on economic and technology cooperation and a memorandum of understanding on developing a strategic partnership. China is offering assistance in the form of building new tanker terminals, refineries and possible pipelines to export the oil from remote regions to the coast for easy loading.163
　　China is streamlining the oil infrastructure in SSA according to their specific needs, an infrastructure that on the one hand satisfies their oil demands, but on the other hand leaves the host country no choice but to become dependent on the Chinese oil expertise. The result is that petroleum countries in the long run will be more dependent on Chinese investments to sustain their economies, than China is dependent on their oil imports. This interaction clearly indicates that China’s preferences are shaped on establishing some sort of economic superiority over their oil strategic partners and forcing petroleum states to be dependent on Chinese intervention. If China has more control over the oil affairs of host countries, it will give them a stronger bargaining base and increase their strategic advantage.
　　The long-term goal of countries that seeks to control the economies of its trading partners is to transform economic gains into security gains, so that in the long run, economics and security are inseparable.164 When China can control the economies of petroleum states, it will have strong incentives to move one step further and create military strategic partnerships. The supply of military equipment, providing of nuclear technology and perhaps positioning of Chinese troops in petroleum states, as overseers of its oil operations, cannot be excluded from its African engagement strategy.
　　By successfully negotiating with petroleum states and scoring diplomatic points, the other state will immediately be in a less favorable situation. In doing so, the preferences will have a stronger strategic value and gives stronger bargaining power. Strategic values or interests are valued not for themselves but for their contribution to the protection or promotion of other interests in the future. They are “interests defined in terms of power”, to recall Morgenthau’s memorable phrase.165 The motivation for the US and China is to try and establish alignments with petroleum states. In this way they their strategic values will be more clearly defined and they can implement strategies to control certain oil fields, offshore oil riggs, pipelines and sea passages. The indication is that the sea around the west coast of Africa, stretching from Nigeria in the north to Angola in the south, is expected to raise problems concerning the transportation of future oil supplies. Because the US and China both have to use these sea-lanes to transport crude oil and gas, it might become a point of conflict.

Ⅱ. Determining Preferences
　　Preference determination is typically specified in one of three ways: by assumption, by observation and by deduction.166 The objective with this section is to explore these ways and determine their analytical value in the context of actor’s preferences in the SSA oil strategic setting, with the main emphasis on the US and China.
　　Because the US and China both have energy security interests, they have formulated energy security policies at the national level and these policies are based on assumptions of realism or liberalism. Determining the preferences of the US and China by deducing preferences from these assumptions, will offer one of the most analytically satisfying routes to see what specific preferences they hold in the SSA oil strategic setting. It is easiest to assume preferences. In the principal application in international relations to the preferences of nation-states, the simplest assumption might be that states attempt to maximize national welfare, or assume that states maximize national resources.167
　　A comparison between the preferences of economics and the preferences of international politics shows that there are distinctions with regards to the actors involved and the goals they pursue. In economics there is limited variation in the cast of characters, namely firms and individuals. Firms prefer profit maximization and individuals prefer wealth maximization.168
　　But international politics involves individuals, firms, groups, nation-states, international organizations and transnational actors. The preferences of ChevronTexaco and China’s Petroleum and Chemical Corporation (Sinopec), may in general terms be homogenous, namely to be engaged in every aspect of the oil and natural gas industry in the SSA oil industry, including exploration and production, refining, marketing and transportation, chemicals manufacturing and sales.169
　　The reality is however, that American and Chinese oil companies operating in SSA are in effect not only serving the interests of the oil industry and acting as channels for the procurement of oil imports for their local economies, but they also serve as useful instruments in the hands of politicians to control and manipulate the oil industries of the agent states. Expansion of US and Chinese oil operations in SSA since the start of the twenty first century are providing them with more power on the continent. The direct result of gaining more power in the oil industry is that the petroleum states are getting entangled in a web of either American or Chinese influence. This influence is leading to a state of dependency of petroleum states on US and Chinese involvement in their oil industries. In terms of economical considerations, the US and China prefer different outcomes in their oil diplomacy with petroleum states.
　　The US regards the pursuing of economical interests as secondary to its objective of achieving a strong military presence on the African continent. Economically, the US seeks to establish principles of free trade and openness with petroleum states that points to the maximization of wealth for the state and profit maximization for oil companies. Chinese economical interests focus on establishing stronger trading and economical ties with petroleum states by following a policy of mercantilism, while oil companies, which are under strict government control, seek to sign equity deals with oil companies and obtain a stake in the local oil industry.
　　Determining the preferences of nation-states or actors in the international arena can also be fixed by observing their behavior.170 The goals and statements of American and Chinese leaders, energy advisors and oil businessmen are observed and preferences are then induced from analyzing these data. These include national identities and widely shared beliefs about appropriate national goals. A step removed from identifying national preferences in and of themselves is asserting that these preferences are determined by enduring subnational interests that dominate the formation of national preferences. This typically involves inducing not the nation’s preferences, but those of powerful actors, who then, it is argued, determine national goals.171
　　The individual goals of subnational oil corporations in SSA, for example ChevronTexaco and Sinopec directly influence the preference formulation of energy security lawmakers in the US congress and the outcomes they expect in the SSA oil strategic setting. Without the advice and recommendations of experts in the oil industry to the national energy security policy, it will be a difficult task for both the US and China to achieve their energy security goals. The conflict in Sudan’s Darfur region is one area where preferences of the US and China can be induced by observing the behavior of national leaders. The promotion of human rights, the institutionalizing of good governance principles, providing healthcare and hospitalization to victims affected by the civil war are some goals the US government pursue in this region.
　　This indicates that the US places individual rights as one of its priorities and is concerned when violations of such rights occur. China is less inclined to assist in humanitarian crisis, because its national security policy does not make provision for strong moral and humanitarian principles. Its preference toward the Darfur crisis is not to get involved in humanitarian terms, but rather to focus on engaging the government on strict economical terms. Due to the fact that China follows a “go out” policy since the start of the new millennium, it has clear preferences toward establishing alliances with petroleum states and built a strong power base in the region. The Sudan case is a prime example of China’s intention to use soft power politics in the form of economic persuasion to lure the Sudanese government into a strategic partnership.
　　Insofar that China has provided military equipment to Sudan in its fight against the rebels in the Darfur region, China received licenses to drill for oil in parts of Sudan. This has strengthened China’s foothold in the region, sometimes at the cost of western companies that left the area because of the civil war. China’s hesitance to voice concerns over the atrocities happening in Darfur and condemning the alleged genocide, is also another example where moral and humanitarian values are lacking in the belief systems of Chinese national leaders and bureaucrats.172 Looking at the position taken by a majority of states towards China’s human rights practices, most states, including the US, condemn China for its unconditional support of the atrocities in Darfur.
　　This statement proves that China is reluctant to abide by international human rights principles and that its “silent diplomacy” of non-interference in the Darfur crisis is justification of its trade and economic preferences above human rights concerns. Sudan is a special case because it illustrates how China can benefit from Western concerns over terrorism and human rights. It also illustrates what has been referred to as China’s willingness to offer a ‘‘total package: cash, technology, and political protection from international pressures.’’ 173 As the Darfur crisis worsened in 2004, China used its position on the UN Security Council to dilute repeated resolutions on the crisis, preventing almost any mention or threat of sanctions against the Sudanese government.
　　Only in March 2005, when world opinion focused on Darfur, did China abstain from voting on a Security Council resolution that referred the possible war crimes and charges of genocide there to the International Criminal Court (ICC) and set in motion a UN study of possible sanctions.174 In summary, China’s fear that the Khartoum government might choose another strategic oil partner, is one of the reasons why China abstain from taking sides over the Darfur crisis. The US, India, Malaysia and European countries are facing energy security problems and oil-rich Sudan is a source of valuable future oil supplies. The Sudan oil fields are to a great extent still unexplored and the Khartoum government might grant exploration rights and oil contracts to the highest possible bidder. Because of the uncertainty over this issue, China will prefer to be on good oil diplomatic terms with the Khartoum government, even if the world condemns its indecisive stance to the Darfur crisis.
　　Because the US and China is aware that the Darfur region is rich in oil, the pursuing of mutual beneficial interests in the region can only strengthen their energy security policies. US-Chinese investments in new oil facilities and providing of peacekeepers to the region are some of the joint operations proposed for US –Chinese cooperation. By looking at the national grand strategy of the US, the goals and preferences of its leadership and administration can be observed. It is helpful to first determine the basis of the US grand strategy and then how it applies to Africa. A short introduction is given on the preferences of the US and China in the period prior to the start of the twenty first century.
　　China during the cold war spread the communist doctrine on the African continent. But this time around, the People's Republic of China (PRC) is not interested in spreading the communist doctrine. It is international trade, economics, and political influence that have got Beijing's rapt attention. The jury is still out about whether China's strong engagement in Africa is a good or a bad thing. Some have praised Chinese involvement in Africa, while others have called it "neo-colonialism." There is no doubt that it is a subject of intense discussion in Washington, D.C.175 National grand strategy typically refers to goals defined by elites over a relatively long period and that can be observed by studying statements and speeches of national and security advisors. Presumably cold war era American and Soviet commitments to capitalism and socialism, respectively, fall into this category.176
　　These different ideologies proclaimed opposing doctrines and divided African countries into pro-western and anti-western or socialist governments. And certainly in petroleum states, these opposing ideologies were cemented in the political thinking of state leaders and shaped their oil industries according to socialist-marxist principles.
　　With the demise of the cold war in the early nineties, a vacuum was filled on the African continent, in that the US and China realized that their different ideologies did not pose any real threats to each other. One indication of how things have changed is that the U.S. military is now truly global in its operations with permanent bases on every continent, including Africa, where a new scramble for control is taking place focused on oil. This growing threat to U.S. power is fueling Washington's obsession with laying the groundwork for a “New American Century.” Its current interventionism is aimed at taking advantage of its present short-term economic and military primacy to secure strategic assets that will provide long-term guarantees of global supremacy.177
　　The goal is to extend U.S. power directly while depriving potential competitors of those vital strategic assets that might allow them eventually to challenge it globally or even within particular regions.178 Grand strategies extend beyond mere military power. Economic advantages vis-à-vis potential rivals are the real coin of intercapitalist competition. US Grand strategists are clear that the real motivation for its interests in SSA is not to forward its military operations to this part of the world and prescribe to SSA petroleum states how to rule their countries, but oil and China's growing presence in Africa. What is certain is that the U.S Empire is being enlarged to encompass parts of Africa in the rapacious search for oil. The results could be devastating for Africa's peoples.
　　The attempt to “induce” preferences by observation risks confounding preferences with their effects. The behavior observed –policies and statements are used “inductively” as indicative of preferences. Yet, in all these instances it may well be that this behavior results only partially, perhaps misleadingly, from underlying preferences.179 This pose the question as to which the US and China have underlying preferences in their oil diplomacy with SSA petroleum states. Bellamy implies that the real objective of US involvement in the African terrain is the procurement and control of Africa's oil and its global delivery systems and that the most significant and growing challenge to US dominance in Africa is China.180 An increase in Chinese trade and investment in Africa threatens to substantially reduce US political and economic leverage in that resource-rich continent. The political implication of an economically emerging Africa in close alliance with China is resulting in a new cold war in which AFRICOM will be tasked with achieving full-spectrum military dominance over Africa. The Department of Defense (DOD) states that a primary component of AFRICOM's mission will be to professionalize indigenous militaries to ensure stability, security, and accountable governance throughout Africa's various states and regions.181
　　Kurt Shillinger, an analyst at the South African Institute for International Affairs, believes “neo-imperialistic conspiratorial” objections to Africom may eventually fade. “I think over time host nations stand to gain far more than they risk in terms of more professional militaries, stronger civilian-military relations, and better disaster response.”182
　　In addressing the many misconceptions that exist over the role of Africom in Africa, Theresa Whelan, deputy assistant secretary of defense for African affairs, told members of the House Foreign Affairs subcommittee: “Some people believe that we are establishing Africom solely to fight terrorism or to secure oil resources or to discourage China. This is not true,” she said. Though violent extremism is “a cause for concern and needs to be addressed,” countering this threat is not Africom singular mission, she said.183 The fast pace of change in Chinese-African relations has provoked much discussion in policy-making, as well as scholarly circles in Africa, Europe and the United States of late.184 Underlying much of the existing analysis of Beijing’s new role in continental affairs are three contrary strands of thought which can be summarized as China’s development partner, China’s economic competitor and China as “colonizer”.
　　The first interpretation (development partner) holds that China’s involvement in Africa is part of a long term strategic commitment to the continent, one that is driven by its own economic needs, a commitment to transmit its development experience to the continent and a desire to build effective cooperative partnerships across the developing world. The second interpretation (economic competitor) holds that China is engaged in a short-term “resource grab which, like some Western counterparts, takes little account of local needs and concerns, whether developmental, environmental or with respect to issues like human rights. Coupled with Chinese manufacturing and trade wherewithal, this approach suggests that African development gains are being challenged, if not undermined, by Chinese competitiveness. The third interpretation (colonizer) emphasizes that China’s new engagement in Africa is part of a long-term strategy aimed at displacing the traditional Western orientation of the continent by forging partnerships with African elites under the rubric of South solidarity. These three contrary strands of thought confirm the suspicion about China’s true intentions for “invading” Africa and what they really want from their engagement with petroleum states.185

Ⅲ. Preference Change
　　The last part of the analysis, discuss preference change in relation to the realist assumptions of maximizing of relative gains, anarchy and survival. Using these assumptions show the way in which the US and China are engaged in their own little power struggle on the African continent and how it affects their preference shaping.
　　To reflect on the utility of rational-choice in preference change, rational-choice has traditionally assumed that the actors and interests are fixed in any analysis and has explained change in terms of changing constraints. The reason is that preferences are impossible to observe whereas constraints are usually more observable. Under these conditions fixed preferences allow for a tight analysis of many issues in an analytically falsifiable way, whereas assumptions of changing preferences lead to slippery and unstable arguments. However the fixed preference assumption is not always valid and cannot handle all problems.186 The central argument is that fixed preferences sometimes provide a powerful analytic premise whereas assumptions of unstable tastes really have only been ad hoc arguments that disguise analytical features.187 In the SSA oil sector, the US and China have to constantly evaluate the constraints of the environment on policy formulation. Nigeria is such a changing environment, continuously placing new demands on the preferences of policy makers.
　　Flexibility will allow for preferences to be adjusted to specific circumstances and not adjust circumstances to suit specific preferences, for example in Nigeria, the multinational corporations, oil bureaucrats, the residents of the Niger Delta and the state controlled oil corporation pursue their own goals, which are under the present unstable situation, very difficult to reconcile. Actors involved are of the opinion that their strategies will provide the best possible solution to the conflict, whereas all the different strategies actually lead to a further escalation of the conflict.
　　The major goal of states in any relationship is not to attain the highest individual possible gain or payoff. Instead the fundamental goal of states in any relationship is to prevent others from achieving advances in their relative capabilities.188 The international system stimulates and may compel a state to increase its power; at the least, it necessitates that the prudent state prevent relative increases in the power of competitor states.189 The SSA oil setting is an example where the international system is stimulating the endeavors of China and presenting China with ample opportunities to increase its power. For the US as China’s competitor, preventing an increase in China’s power is an almost impossible task because of the anarchical structure of the international system.
　　One of the options available to the US is to forego increases in its absolute capabilities, for example to concentrate less on its position as the world’s only superpower and how to maintain this position, but to allow states with lesser capabilities, such as China, to increase position in the system and increase its gains. State positionality in the system, however may constrain the willingness of states to cooperate.190
　　If China signs deals with these “undemocratic states”, it will be a misjudgment of the principles of good governance and improved efficiency standards that the US wants to promote in these countries. A concern for the US is that China and its new partners will surge ahead in terms of relative capabilities and in the future may become formidable foes. This is a scenario that cannot be ruled out and is likely to happen. The sales of arms and military equipment by China to states such as Sudan, Nigeria and Angola poses the question of the uncertain intentions of these states and what payoff they want to receive. Is it to align with China in a military strategic pact against the US and counter future US strategic moves in the region or is the alignment purely for economical reasons and to receive economical payoffs? With regards to the situation in SSA, the conflict in the Nigeria is a key example where international actors, according to the neorealist view of self-interest, depict the concept of maximizing their relative gains and where common ground is unlikely to be obtained.
　　Relative gains considerations are more important in security matters than in economic affairs. In a world where new sources of oil are harder to find, the US and China might regard the SSA oil setting as their sole property, mutually exclusive to interference from either country and non-negotiable on energy security matters.191 Cooperation on the ground of becoming partners in the SSA oil strategic setting and finding common ground on oil issues is an intimidating thought. For exactly the same reasons that the US and China are competing in other influence spheres, for example the arms and space race, socio-economical superiority, world dominance or hegemony, are they trying to stamp down their authority on the African continent.
　　Realism recognizes that there is no overarching authority to monitor their actions in the SSA oil strategic setting and that violence or the threat of violence might be used to destroy or enslave them. Kenneth Waltz suggests, in anarchy wars can occur, because there is nothing to prevent them and therefore in international politics force serves, not only as the ultima ration, but indeed as the first and constant one.192 Thus some states may sometimes be driven by greed and ambition, but anarchy and the danger of war cause all states always to be motivated in some measure by fear and distrust.
　　Due to the fact that both countries are pursuing greedy ambitions, an element of fear and mistrust is imprinted in the minds and hearts of their lawmakers. Preferences will thus be strongly influenced by the concept of survival. Because statesmen, according to Morgenthau, think and act in terms of interest defined as power, they will try to maximize power and are skeptical about each other’s true intentions.193 This intolerance attitudes and the wariness of the other party’s actions and intentions is an important factor for both countries, if they aspire to sway oil diplomacy in their favor.
　　The multitude of endogenous actors in the SSA oil strategic setting allow for preference change. Actors with new goals enter the oil debate and in most cases their preferences over outcomes may differ from their counterparts. The fluctuation in oil prices, political instability in oil regimes, conflict in the Niger delta and Sudan-Darfur region are all issues that are constantly change the debate of African oil politics. The heterogeneity of these actors dramatically increases the complexities of the issues and makes conclusions on rational decisions difficult to achieve. The ideal is that all these different issues be handled in a softer approach that will produce formal results. It is true that oil politics in Nigeria have a delimiting effect on cooperation between the ethnic groups in the Niger delta. The question is what measures or programmes can be implemented to unite the different opinions and preferences of the roleplayers?
　　The fact that the US is not certain about China’s intentions in SSA raises the concept of fear. Given this fear – which can never be wholly eliminated – states recognize that the more powerful they are relative to their rivals the better their chances of survival. Indeed the best guarantee of survival is to be a hegemon, because no other state can seriously threaten such a mighty power. The US and China that have no reason to fight each other, that are merely concerned with their own survival - nevertheless have little choice but to use power politics in the SSA oil setting to influence the actors and step out as victors in the long run.194 Realism argues that there is no central authority in the international political system that sits above states to protect them from each other. China sees this absence of a regulating authority as a free will to conduct its business without interference by another power. In a way, it knows that its African policy will be unaffected by decisions and rules of the international political system and therefore it can influence the SSA oil actors to its own accord without fear of foreign reprimand.
　　In other words, China can penetrate the African oil market, lay down the rules of the game and negotiate with partners in an unconditional manner and gain the maximum benefits from such interaction. The ultimate means by which states achieve security in the international political system is through the concept of self-help, because states are not equal in capabilities and have to rely on their own means to ensure survival.
　　The US and China competing for oil and natural gas in the world market are locked in a security dilemma. At what point does the effort of the US to ensure its security come to be perceived by China as a threat to its security and vice versa? Offensive realism argues that states in a competitive world care only about survival and how it can maximize its power. Morgenthau defines power in terms of interests and that power is the main driving force keeping states “alive” in the international political system.195
Oil dynamics and power politics between local actors and the U.S and China are reasons for policy belief change and implementation of new strategies. The action for leaders of petroleum states, since the arrival of the U.S and China, is then to sign strategic partnerships where preferences are shaped on ideological similarities, socio-economical benefits and south-south assimilations. This strategic belief system means that the policies of the U.S and China are directly influenced by individual relationships with petroleum states and with each other.
Chapter 6: The Implications of Strategic Interaction between the US and China

　　The US and China’s oil diplomacy in Sub Saharan Africa has an influencing effect on each other’s policy-making and those with the states discussed in this research. The first part presents a short examination of the implications of US-Sino involvement in Sub Saharan Africa and how petroleum states are influenced by the diplomacy of the US and China. The remainder of the chapter focuses on the mutual implications of the US and China’s interaction in SSA. The US and China’s influence on the preferences of petroleum states are leading to changes in the political systems of petrostates and the way leaders are thinking about oil issues. One of the key changes that are taking place is reform of the oil industry. All of these new developments are necessary if petrostates want to keep up with international standards, especially the principles laid down by the Extractive Industries Transparency Initiative (EITI).
　　If the US and China adopt unilateral diplomatic efforts to engage their client states and views the change of petroleum state’s behavior as unnecessary to achieve their desired goals, the means would not have fulfilled the ends. For example, the US places considerable emphasis on the reconstruction of economies and investing in the lives of ordinary citizens, through development and socio-economical upliftment programmes. To change the lives of ordinary citizens means that the economy of the country be changed, depending on the pace with which programmes are implemented and if citizens contribute to the execution of such programmes.
　　According to US policy objectives for Africa, more emphasis is placed on humanitarian needs, improving the lives of ordinary citizens and incorporating them into the international political system, instead of influencing petroleum states from a power maximizing perspective, gaining control of certain oil sectors and balancing against threats from China.
　　US oil strategies will incorporate strong elements of humanitarian assistance for petroleum states and preferences will be shaped according to a humanitarian element. According to the strategic-choice approach, actors’ behavior in the strategic environment will change if there are structural modifications taking place in the environment.196 Under normal circumstances the preferences of actors will be static, unless a state moves the goal line. Original preferences will now be altered to suit the strategic environment where interaction will take place. In the case of Sino-US oil diplomacy in Sub Saharan Africa, the two powers since the start of the twenty first century had embarked on a journey to search for new oil and gas resources and in SSA an alternative source to existing markets have been found. The original goal was to secure oil resources without fear of competition, but the international demand for oil by these super economies puts them on a path of conflict.



Ⅰ. China and Sub Saharan African Oil: Implications for the United States
　　The United States, the other members of the G8, and advocacy groups have been especially active in promoting transparency in the oil and mineral sectors of developing countries. China’s aid and investments, however, are attractive to Africans precisely because they come with no conditionality related to governance, fiscal probity, or the other concerns of Western donors.197 China’s deputy foreign minister, Zhou Wenzhong, told an interviewer, ‘‘Business is business. We try to separate politics from business. You [the West] have tried to impose a market economy and multiparty democracy on these countries, which are not ready for it. We are also against embargoes, which you have tried to use against us.”198 Angola is a prominent example. The IMF and Western countries have been pressing Angola to improve the transparency of its oil sector and to make other reforms as prelude to a planned aid donor’s conference. However, in the wake of China’s $2 billion loan, along with rising oil prices, Angola seems less concerned with a formal agreement with the IMF or interested in substantial aid if conditioned. Angola’s ambassador to South Africa remarked that making transparency a condition for the donors’ conference was ‘‘uncalled for.”199



Business Competition
　　Most of China’s investments are through state-owned companies, whose individual investments do not have to be profitable if they serve national Chinese objectives. The United States does not combine offers of aid with private investment ventures; indeed, most major donors under principles enunciated by the Organization for Economic Cooperation and Development (OECD) discourage such practices. As aid programs expand in Africa, especially for large infrastructure, telecommunication projects, and industrial development, U.S. companies may begin to complain more loudly about what appears to be unfair competition for contracts, adding to the issues the United States will have to raise with Africa and with China.200 Again, it is not China alone but others, like South Korea, that will challenge the position in these markets and the traditional competitive advantages the United States and European countries have enjoyed.

Policy Response
　　The United States and Europe cannot consider Africa their “chasse garde”, as the French once saw francophone Africa. The rules are changing as China seeks not only to gain access to resources, but also to control resource production and distribution, perhaps positioning itself for priority access as these resources become scarcer. In adapting to the changing circumstances, China has become a savvy competitor.201
　　There is a large reservoir of good will toward the United States in Africa as well as recognition of the importance of the United States to Africa’s hopes for a larger role in the global economy. Despite new investment from Asia, the United States, the United Kingdom, and France still account for 70 percent of foreign direct investment in Africa. U.S. oil companies still lead in the offshore extraction technology critical to West Africa’s growing energy production.202 The United States continues to import substantially from African oil and gas producers, and the market is still controlled more by international supply and demand than by any individual country’s manipulations.
　　Aid programs should not be distorted into vehicles for supporting U.S. companies abroad. The Organization for Economic Cooperation and Development (OECD) principles in this regard are sound.203 But the United States has instruments, such as the Export-Import Bank, OPIC, and the United States Trade and Development Agency (USTDA), which can be used more in a proactive and coordinated manner to assist U.S. companies to compete in this changing environment.204
　　In that sector, the potential for public-private partnerships, consistent with sound development principles, may well be possible. Finally, China is not impervious to world opinion or to its image as a world power. It has pulled back from unqualified support for Sudan and Zimbabwe in the face of world opinion and bowed to UN sanctions against Liberia. It rarely uses its veto in the UN, and then mostly when the issue relates to Taiwan. The door may well be open to a frank dialogue on the situation in Africa, including those differences and common interests that concern the United States. There are many ways in which the United States can compete more vigorously and effectively with China and other new players in Africa, both to preserve its influence and thwart deterrents to progress on economic and political reform.205
　　There is an urgent need to do so; to baton China’s influence simply waning over time would be a mistake. China's surging oil demand and dependence on oil imports have forced the Chinese government to adopt domestic administrative measures and to try to secure foreign oil supplies. It is essential to understand China's domestic energy structure in order to understand China's oil strategy and its hunting behavior in its quest for oil. On the whole, China has relied on a mercantilist approach to guarantee its oil security rather than on a market approach, because of the constraints imposed by institutional fragmentation, strategic thinking, and vested interest concerns.206
　　Meanwhile, the U.S. response to China's oil strategy is to play either a conductive or an impellent role in satisfying or hampering China's desire for oil security. In U.S. opinion, China's oil diplomacy has more or less challenged U.S. geopolitical interests and ignored international norms. To prevent oil tension and an uncertain China, the current U.S. government has adopted a hedging strategy toward China consisting of energy cooperation and military preparedness. Through a variety of bilateral dialogues and cooperation, oil and energy issues between the two hegemonies have so far been manageable and will remain so as long as both sides continue to adjust to each other.207 For the sake of oil security, China needs to show its determination to apply domestic demand-side measures and a market approach, as well as a willingness to cooperate with the United States and multilateral mechanisms without neglecting international norms.

Ⅱ. The United States and Sub Saharan African Oil: Implications for China
　　In terms of general security, it is clear that by viewing the United States as a competitor rather than a partner, China considers the United States the key obstacle to entering the free oil market. This understanding seems to be deeply engrained in the Chinese worldview and will most probably remain for some years to come. As such, China's understanding of global energy import options and alternatives might be best defined in terms of security considerations rather than economic feasibility.208 For Beijing, the importance of interaction with the United States over the Sub Saharan Africa will certainly grow, considering that China's reliance on imported oil will also grow.
　　To a certain extent, the two countries share common interests in the region. Both seek stability in Nigeria and Angola that would allow permanent, uninterrupted oil flows from the region. However, since both countries have different "close" partners in the area as well as different capabilities, they also have different understandings of the power instruments to be used to obtain such stability. The term "hegemon," according to Chinese thinking, has a negative connotation, and depicts a power that desires imperialistic control over other powers, and is overbearing and controlling.209
　　China has traditionally characterized as hegemon only foreign powers with which it has highly antagonistic relationships. Since the collapse of the Soviet Union, China has viewed the U.S. global position with deep suspicion, if not hostility. Chinese leaders believe that the fundamental drive of the United States is to maintain global hegemony by engaging in the shameless pursuit of "power politics," often disguised as a quest for democratization.210 The Chinese accept, then, that they are functioning in a world dominated by a United States that in a globalized era is especially privileged. Moreover, they believe that US dominance is likely to prevail for many decades to come. Yet, although Chinese recognize that their country is far behind the United States across all dimensions of power, they also see their own country on the rise—and, unlike the former Soviet Union, being steadily integrated into the world economy and able to benefit from economic globalization.211
　　Chinese officials strongly disapprove of the presence of foreign military forces in the Gulf of Guinea, especially with regards to the US strategic partnership with Sao Tome and Principe and establishing of the new African Command Center (Africom). They characterize U.S. military involvement there as interference and an attempt by the US to gain control of the Gulf of Guinea oil region.
　　Having only limited options in terms of power projection to the area, Beijing views the increased military presence of the US as a destabilizing factor in the Gulf of Guinea. It will be a difficult task for the US to control the Gulf of Guinea, because of strong Anti-American sentiments amongst the mostly Muslim population of the region. Recent developments show that Chinese presence in the region is welcomed with open arms and they are encouraged to invest in the oil infrastructure of Nigeria and Sudan. Countries like Chad and Cameroon are also lobbying their support in favor of Chinese intervention.
　　The US “trademark” of democratization and persuading petrostates to follow good governance principles is an empty concept and is only a pretext to intervene in the oil affairs of petrostates. China, along with its partners accuses the US of following the wrong approach in their SSA oil diplomacy. African states are not interested in ways how to effectively run their governments, but need investments and economical incentives. And that is the difference between the policies of the US and China, one is concerned about humanitarian rights and the other is concerned about doing business. The leading oil companies of the world—those capable of strategically sound overseas investment and possessing the up-to-date oil extracting technology, while extracting the largest share of world oil—are either U.S. companies or multinational companies dominated by U.S. capital.212
　　In the Gulf of Guinea withs its rich oil resources, American oil companies are making more inroads with petrostates than their Chinese counterparts and especially in Nigeria, Sao Tome and Principe and Angola. In recent years ChevronTexaco and ExxonMobil, two of America’s giant oil companies have invested heavily in the Gulf region and were allowed drilling rights in newly allocated oil blocks and fields.213 US oil companies establish themselves as dominant players and get valuable acreage in the region. In Angola and Nigeria, American oil companies already are playing a substantial role in the oil politics of host countries and contributing to sustainability and development of the oil sector. Mainly because they bring with them expertise and launch credible training programmes, something that is lacking by the Chinese intervention. The Chinese are however, improving their training methods to Africans in oil production and in a few years time might be on par with American standards.
　　A different viewpoint is held by Yang Guang, director of the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences, he says “China and the United States do not have strategic conflicts in Africa.”214 He notes that Chinese companies are attracted to the improved investment environment in Africa, but they make up only a fraction of total investment on the continent.215
　　And even for resource development, we cannot consider it to be a kind of strategic competition, it is just competition at business level. China, the United States, and African countries have shared strategic interests, because China and the United States are both oil importing countries, so nowadays we face the same challenge in the international oil market, with a very high price and with the possibility of supply disruption.216 Because both countries are major consumers and importers of oil, we have to contribute together to increase the producing capacity of oil. If the world has larger producing capacity, then both the United States and China will be much safer. And if you look at the interests of Africa, for many of them oil and gas represent the means for capital accumulation for their development. And they don’t have the technology, they don’t have the financial capacity, so they need foreign companies to transfer technology and to invest in their countries to develop this development potential.217
　　China’s presence in SSA and the successful influence it exercises with petroleum states is a matter of grave concern for the U.S administration. Apart form the facts discussed in the above section, China has a more intimate and special relationship with petroleum states in SSA, because its diplomatic approach is simple and accommodating to leaders of oil states. China and African counterparts oftentimes view the U.S policies with its complicated terms of engagement and implementing good governance principles under the guise of democracy with skepticism. The U.S and China in the twenty first century will continue to compete for the main oil hotspots in SSA and won’t be sidetracked by mutual accusations of misconduct or unacceptable behavior. After all, it is oil that is the name of the game.







Chapter 7: Conclusions
　　The timing of US and China’s involvement to develop and utilize SSA energy resources is moderate, because the twenty first century is seen by many political observers as the era of Africa’s modernization and the influence of the US and China can only improve the socio-political conditions of the region. The ideal is that competition between the US and China will stimulate innovation, encourage efficiency and cause greater interplay between the oil actors. Oil companies will also develop newer technologies to provide better services.
　　The US and China desperately need oil, but the countries which supply oil are engaged in internal disputes and are in a way hostile toward foreign powers which they view as non-friendly or criticizing their domestic political systems. It is not a case of oil supplies drying up or that oil is difficult to obtain, but rather which one of the two powers can bring money, investments and aid. One can argue that the state with the strongest economic incentives, which can bring change in African societies, will win the hearts of the people.
　　Africans, to heel over to the behavioral science, are strongly influenced by emotional factors, for example they would prefer to do business with a person on a face-to-face basis to discuss terms of agreement, rather than doing business when the contacting partner is not visibly present. Far more value is given to this kind of negotiation than long distance talks.
　　Oil producing countries in Sub Saharan Africa are especially prone to mismanagement of oil funds and that this money end up in the pockets of bureaucrats, employees of multinational oil companies and the state controlled oil consortiums. The people on the ground hardly see any of the oil money and they are entitled to at least a fair distribution of revenues. A way has to be found how oil revenue can be fairly distributed between all actors involved. But in Africa, a fair distribution of oil money will hardly ever materialize. Internal rife, political instability, civil conflict and the egoistic ambitions of the oil lords dominate the oil industry. A solution to this situation is not in sight, at least not in the foreseeable future, unless the US and China as the biggest customers in the twenty first century can change the oil environment and politics to the benefit of all the parties.
　　Competition for natural resources has tempted policy makers in the US government to review its policy toward Africa. Africa is no longer the forgotten continent, which during the Cold War was regarded by the superpowers (the United States and Russia) as an ideological battleground. With the dawn of the new century the battleground in Africa has changed to one of competition for oil and the US and China are the main contenders for this territory. American energy security advisors are aware that a non-interference approach regarding African energy affairs will put them behind in the race to secure their share of African oil. For this reason formulating effective strategies based on sound preferences are necessary to make an impression on petroleum states.
　　American and Chinese oil companies influence the decision-making process. Oil companies in the US traditionally have close links with government departments and this interwoven relationship give them representation in the formulating of national security issues. The idea is that oil company’s preferences should be part of the national energy security policy and shouldn’t be viewed as separate from national interests. Leading politicians in the US government, for example president Bush and former vice president Dick Cheney, who was chairman of Halliburton, had interests in oil companies and they made it to the White House.
　　An important fact is that both the US and China have to become acquainted with the dynamics of the oil industry in the Sub Saharan African context. If they know what to expect, oil diplomacy will be much easier executed, than to simply rush in, take what they can and earn the disfavor of oil producing countries. The argument is that energy security is becoming a game of high politics, meaning that energy security is not only attained when the domestic market is satisfied, but also that energy security issues are negotiated between diplomats, bureaucrats and on subnational level.
　　The country with a positive approach that not only concentrates on obtaining oil and supplying its market will have an advantage over the country that has an ambitious, selfish approach more based on self-attainment than mutual consideration. The question of the right approach is also important when confidence-building measures are launched.
　　Communication, technology transfers, bilateral agreements and investment in the oil infrastructure all contribute to a mutual understanding of energy issues and these measures will strengthen the ties between states and clients. Sub Saharan African oil producers will take these factors into account when deciding on the allocating of oil exploration rights. In light of this point, a haphazardous approach by the US or China in their quest for African oil can have devastating effects on their relations with Sub Saharan oil producers and cause these producing states to form defensive alliances aimed against the US or China.
　　In very few instances states make irrational, unpurposeful choices that are without results and direction. The United States and China are strong independent, autonomous power units, self-regulatory in every instance and “mature” enough to make decisions that affect their decision in SSA. Another point is that an actor’s disobedience to follow the rules of the international society leads to the actor viewed as discreditable and incapable of performing its duties and functions. If either the US or China cannot fulfill its energy security obligations and impede its own strategic objectives, it will affect the energy strategic setting where these objectives are to realize.
　　In the Gulf of Guinea the oil environment present a challenge to American and Chinese policymakers that won’t easily be met in any other oil environment of the world. The opportunities in this region are to such an extent, that new challenges arise on a continuous basis. Jobs are created and petroleum states are occupied to help develop their own oil infrastructures.
　　Oil security can here be placed at the top of diplomatic agendas and strategies based on mutual understanding are formulated and implemented. The waters around the west coast of Africa, stretching from the oil-rich Nigeria basin, down south to the coastal waters of Angola holds great promise for future exploration and production.
　　For the moment, it is in the area of political stability where the United States and China have overlapping interests and the best opportunity for cooperation. The deputy assistant secretary of state for African affairs told the House International Relations Committee in 2005 that China’s pursuit of African oil “should not be read as a threat.”218 He added that efforts by others to seek African energy can work to advance U.S. goals in Africa by increasing prosperity and stability. A 2006 U.S. Department of Energy report concluded that Chinese energy demands do not per se threaten U.S. national security interests but rather serve to increase world oil supplies. The then majority leader of the Senate Foreign Relations Committee, Richard Lugar, said early in 2006 that it was crucial for Washington to broaden its energy cooperation with China.219
　　In presenting some final remarks, it is true to some extent that the US and China are competitors for oil in SSA, but that oil diplomacy with petroleum states on a national level are rather characterized by the different approaches they follow and not on a competitive relationship. U.S. and Chinese energy advisors on a national level agree that cooperation and not competition is the key to finding solutions to oil security. Although this might be seen as diplomatic rhetoric, oil security in SSA will be better achieved by cooperation and not competition. If the US and China follows unilateral policies in their quest for oil resources in SSA, it might have a multitude of negative effects. The unstable situations in the economies of petroleum states might continue due to the politicization of their oil industries, oil prices might fluctuate due to the inability of the US and China to stabilize the oil markets of petroleum states and because of the US and China’s reluctance to cooperate they will continue accusing each other of some kind of misconduct.
　　The US accusations of China not adhering to international norms and standards regarding transparency, good governance and human rights and China’s accusation of the US hiding behind democracy and humanitarianism to further its oil interests in SSA, are examples of such unacceptable behavior. On the other hand, American and Chinese oil companies in the SSA terrain are indeed locked in a competition to acquire oil licenses from petroleum countries. The natural tendency in such a competitive business milieu is to offer more profitable and rewarding benefits to host countries. In the African oil environment this is exactly the case, petroleum countries are “bribed” to accept diplomatic terms that benefit themselves and not those of the country’s citizens.












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Taylor, Ian. “China’s Oil Diplomacy in Africa.” International Affairs 82, Issue 5 (2006): 937-959.
Walt, Vivian. “China’s Appetite for African Oil Grows.” Alexander Gas and Oil 11, Issue 5 (2006).
Yao, Yuanming A. “China's Oil Strategy and Its Implications for U.S.-China Relations.” Issues & Studies 42, no.3 (September 2006): 165-201.
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Newspapers
Buchan, David and Hoyos, Carola. “Energy Security May Spark a Last Scramble for Oil.” Financial Times, 27 June 2005.
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