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Heritage Oil's Flight With the Winds of Change in Africa [analysis]

1710 words
20 August 2007
The allure of oil around the world has attracted the most colourful of characters
and spawned some of the most interesting stories. Sadly, in most oil producing
countries death, instability and poverty have stalked the people, governments have
shaken and fortune seekers have played their hand, writes Angelo Izama

War drums in the last two weeks between DR Congo and Uganda have filled the
newspapers with headlines - and observers with the same dread that hangs around
the mining of oil and other minerals in areas prone to what is known as resource
wars. A high-money venture, the allure of oil around the world has attracted the
most colourful of characters and spawned some of the most interesting stories.

Sadly, in most oil producing countries death, instability and poverty have stalked
the people, governments have shaken and fortune seekers both local and foreign
have played their hand. Enter Uganda.

While not yet an oil producer, promising prospects have drawn in the usual
suspects. At a dinner table to thank higher powers for the good fortune of oil in
May this year, President Yoweri Museveni sat next to Heritage Oil's Tony
Buckingham. Anyone with an Internet connection will learn interesting things about
Mr Buckingham. Today one of Buckingham's former business partners - a man with
whom he set up a mercenary army comprising ex-South African army commandos called
Executive Outcomes - is being held at a maximum security jail in Zimbabwe.

Simon Mann, as Buckingham's comrade is known, is facing charges of attempting to

overthrow the government of President Teodoro Obiang Nguema Mbasogo of oil rich
Equatorial Guinea.

Mann, Buckingham and others set up Executive Outcomes in the 1990s and have
operated the private military outfit in other oil or mineral rich countries
including Angola and Sierra Leone.

The company re-constructed itself when its business was declared illegal in South
Africa where it was based. However, its "mercenary" activities were unheard of
until March 2004 when the Harare government stopped a plane with 70 mercenaries on
board. The plane had been met by Mann and had apparently stopped to pick up arms
enroute for the alleged coup in Equatorial Guinea. The mercenaries claimed they
needed the guns to protect a mine in DR Congo.

As the handcuffs were being snapped onto Mann's wrists at Harare airport, another
band of mercenaries in Malabo, the capital of Equatorial Guinea including friends
of Buckingham like Nick Du Toit, another former member of Executive Outcomes were
being put under law and order. Some reports claimed that the British, Spanish and
American governments knew of the privately funded attempt to overthrow Nguema's
regime and replace it with an opposition leader residing in the Spanish capital,

At the time of the scandal (March 2004), then acting Foreign Affairs Minister Col.
Tom Butime told this newspaper that he was not aware of the relationship between
Buckingham whose Heritage Oil had a license for oil exploration in Uganda and the
alleged coup plotters who had been nabbed in a failed attempt at regime change in
Equatorial Guinea.

Mann is currently serving part of a four-year sentence but is facing extradition

to Guinea for his alleged role in the coup. In October 2004, President Museveni
was in Harare for a three-day official visit. Some sources claimed he had been
tasked by Buckingham to broker the release of his friend Mann by appealing to his
colleague, Robert Mugabe.

Despite these events little of the connections of Buckingham has been an issue
with Kampala it seems. Indeed such are the high stakes games that are played in
the international oil industry. The Guinea affair implicated not only foreign
governments but personalities like Sir Mark Thatcher, the son of former British
Prime Minister, Margaret Thatcher, who is a friend of Mann.

Thatcher was named as one of the financiers of the failed coup plot. Other
interesting names continue to pop up about Uganda and her oil. One is that of
Libyan leader, Col. Muammar el Gaddafi. A study done on oil and its potential
impact in Eastern DR Congo by the Pole Institute in 2003, concluded that Col.
Gaddafi was not picnicking when he visited Toro Kingdom in early 2001 but
investing in a potentially lucrative relationship with the royal family.

Col. Gaddafi is the "Defender of the Crown" - a title given to him by Toro's young
King Oyo Nyimba. The Libyan leader has been associated with the Queen Mother Best
Kemigisa since. The researchers said the relationship between Col. Gaddafi and the
Kingdom was calculated.

"It is difficult to believe that the Libyan leader is acting out of altruistic
motives; on the contrary, it is not hard to imagine that Gaddafi's interest in
Toro could be connected to the prospect of oil," the report noted.

At the time the report was done, said its author; Dominic Johnson, much of the
prospects for oil were in the Semiliki Valley in the territory of the Kingdom.

Gaddafi is still interested in Ugandan oil and has, according to sources close to
the Libyan government, offered to help build a small refinery in western Uganda.
Note that the Libyans have won a pipeline construction deal to extend the Kenya
oil pipeline from Eldoret to Kampala. Company officials at Tamoil, Libya's state-
owned company which is locally registered, say that Libya is prepared to finance
the infrastructure to the western oil fields.

Recently, sources say, the Libyan government is extending its interests to the
Albertine Graben by bolstering its diplomatic relations with the Kigali regime of
Paul Kagame. Rwanda is also seeking oil and has an agreement with a company called
Vangold Resources based in Canada just like Heritage Oil.

Rwanda in many respects is going about the oil issue more expertly when compared
to countries within the Eastern Rift Valley basin where oil has been the main news
these last two years. An oil find at the base of the Albertine by Rwanda could
potentially see accelerated activity by Kigali.

Oil as a potential spark for conflict has now been established with the events
that occurred in the Lake Albert over the past two weeks. There is little doubt
that it is now clearly a fully-fledged issue of economic and political stability
for the countries of the Great Lakes.

Not only is the vast eastern DRC teeming with mercenaries, militias, tribal
authorities and foreign armed groups like the Lord's Resistance Army (LRA) but the
involvement of multi-national companies and foreign governments in weak states in
the region and you have a powder keg situation on your hands.

Some of the latest names are Malaysia's Oil and Gas giant, Petronas, which is in
talks with Uganda's Ministry of Energy about a possible petroleum development. A
recent trip by President Yoweri Museveni to Malaysia announced cooperation is in
the works with Kuala Lampur. Officials of Petronas are expected in Uganda next

After the Uganda-DRC standoff, Heritage appears to have emerged stronger. Sources
say it is now getting better cooperation from Joseph Kabila's government (in the
face of threats by Uganda to re-enter). Before this, Heritage had made it publicly
known that Kinshasa was at best dilly dallying about activating the exploration
concession agreement it signed with Kinshasa. Think about this.

Also, an agreement on better relations between Kampala and Kinshasa could lead to
the company and its partner, Tullow, increasing exploration in their concessions
on the Congolese side of the border. There were whispers in some circles that the
border tensions could have been deliberately played up by Kampala with that
consequence in mind.

Intelligence sources told Sunday Monitor the Ugandans succeeded in forcing a

settlement in part because President Kabila has in the past months been isolated.

Countries in the European Union are disappointed by his belligerence towards his
defeated rival Jean Pierre Bemba -- after the Union had spent hundreds of millions
of euros financing a "democratic" election there. A rebellion by Bemba in the East
with any slight support, especially from Uganda, would wrest control of the East
from Kabila possibly leading to a civil war.

Kabila has reportedly grown icy towards Belgium, a key player in Congo and
alienated his close personal friend, EU Development Commissioner Louis Michel.

Countries like Belgium and France do not support further chaos in the eastern DRC
if only because it could bring the region under more Ugandan (read English
speaking) influence. A weakened Kabila would mean these countries could lose
whatever influence they have left in the eastern DRC altogether, and this in a
region where their former colonial properties like Rwanda and Burundi have come
under apparent American and British hegemony by proxy.

The United States, which leads in official development assistance to DRC, is not
averse to regime change in Kinshasa either, having generated the coups that
brought Marshall Mobutu Sese Seko to power there in the '60s.

This may explain why President Francois Bozize, of French-speaking Central Africa
Republic (CAR) whose country borders oil rich Chad, Sudan and the DRC is expected
in Kampala this weekend for talks with Museveni.

In a continent where foreign policy is as complex as can be (most western

governments prefer change by proxies), and where powerful companies like Heritage
Oil operate in complicated environments, it would not be shocking that the
Buckingham's of this world hold not just private enterprise but are part of the
bigger battle for resources on the continent.

Europe's 'loss' DR Congo (DRC) exports to Belgium in 2005 were worth $576,332
million of which $521,041 million was accounted for by pearls, precious stones and
metals. In 2006 Belgium's imports from the DRC were worth $509 million suggesting
a slight decline. Precious stones' exports fell from $521 million in 2005 to $441
million. Instability and less influence are some of the reasons for a bad forecast
for Belguim-Congo trade. DRC exports to France in 2005 were worth $124 million of
which $94 million was in mineral fuels, oils, distillation products and $25
million was in timber.