US and China Negotiations with Oil Producing Countries
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The start of the twenty first century signaled a new beginning for the United States and China in their quest for oil diplomacy with African oil producing countries. One of the characteristics of this venture is the difference in approach both countries follow to attain this natural resource. This research work, therefore, examines the diplomatic measures of the US and China in their negotiations with oil producing countries in Sub-Saharan Africa, hereafter referred to as (SSA). In particular, the results they expect or the preferences over outcomes are analyzed. It is not the intention of the study to present a comparative analysis of US and Chinese import figures or to look at their reciprocal relationship. The question is what strategic choices do the US and China make in their interaction with oil producing countries and in what way does such interaction shape oil diplomacy? An important finding is that the US and China develop different strategic paths and policy frameworks which strengthen the assumption that the two countries compete for SSA oil. Along these lines, the study investigates the oil diplomacy of the US and China in SSA using the strategic-choice approach as an analytical framework.
In the last decade, the US and China has moved their search for oil security to the African continent. The US and China arrive on the SSA oil scene with their own motives and interests. Their single most important interest is to engage in oil diplomacy with petroleum producing 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 producing states in their oil diplomacy approach. China, the world's fastest growing economy, views SSA as a welcome offloading ground for its products in exchange for oil. An economic approach focusing on enlarging its commercial interests is the driving factor for China's engagement with petroleum producing states. China needs more raw materials to supply in its increasing domestic demand. Instability in the Middle East, oil dependency and securing its energy interests drives the US to SSA. Keeping a watchful eye on China's involvement and monitoring its influence with petroleum producing states is another reason the US is devoting much of its time to this part of Africa. The US interest in the region focuses on the procurement of oil and gas, but with the establishment of the US African Command (AFRICOM), US involvement in SSA shifted in a large degree to the fight against terrorism and safeguarding of American oil operations.
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 approach is used in the paper to explain the strategic interaction of the US and China with oil producing countries and not the strategic interaction between the US and China. The argument is that both countries have independent influencing power and exercise an asymmetric relationship with oil producing countries. In SSA the preferences and beliefs of the US and China in conjunction with the strategic environment are the core attributes on which the strategic-choice approach is based. In the SSA oil environment, there are many beliefs and preferences which have an effect on interaction and the formulation of policy frameworks.
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 (Lake & Powell, 1999). Whenever changes in the behavior of actors do take place, it is primarily done through learning, through changes in the actors' environment or by analyzing the actors as more basic actors Lake & Powell, 1999). In this study, the methodological bet would disaggregate the actors into more basic actors, such as the individual beliefs of the energy departments, national leaders, multinational oil corporations, bureaucrats and individuals.
Frieden (1999: 50) mentions the concept of actor's preferences over choices, and how the outcomes affect strategic interaction between actors in the same setting. The preference in a particular setting leads the agent to devise a strategy. 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 (Frieden, 1999:50). A strong variant of realism, for example, implies that state preferences are so overwhelmed 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.
Due to the continuous rise of new issues in SSA oil politics, the argument is that preferences are shaped by environmental factors and thus not static. It will be difficult, therefore, to separate the preferences of the actors from the strategic environment. The assumption is that a cycle of interaction is proposed deriving from 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 political environmental constraints into consideration, because the oil-induced political environment is constantly changing. Instability of oil producing countries, corruption, the negative consequences of having oil reserves, bad governance and terrorism are contributing factors to this changing environment. In more stable, homogenous oil environments, the 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 such environmental influence. The North African oil producing states of Libya, Algeria, Morocco, Tunisia and Egypt have a strong unifying Muslim culture, and they can shape their preferences around a common goal. In SSA, 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 political 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 focuses 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 policymakers.
US-Sino oil diplomacy in SSA thus follows different paths. 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 producing states, SSA now presents new challenges to the US 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. However, for diplomacy to be an effective tool, the US and China need to formulate preferences or policy beliefs. The next section presents a brief overview of US and Chinese expansion into the SSA oil fields in the last couple of years. The aim is to identify the major oil producing countries with whom the US and China have signed deals and not to present import and export figures. Looking at the allocation of exploration contracts to the US and China by SSA oil producers, it becomes clear that these countries are siding with either the US or China. The point is that diplomacy and strategic interaction are deciding factors influencing the relationship. For example, Nigeria and Angola as two of SSA's major oil producing countries have strong relationships with both powers, but their interaction differ.
US and Chinese Expansion into Sub-Saharan Africa Oil Fields
The growing expansion of Chinese national oil companies into Africa's oil markets is perhaps the aspect of Sino-African relations that most concerns the international community (Taylor, 2009: 37). Chinese firms are actively seeking resources of every kind: copper, bauxite, uranium, aluminum, manganese, iron ore, and more. However, the issues surrounding oil are of particular interest to Western policymakers studying China's rise (Lyman, 2006). Indeed, although China and the US do not rely on one another for energy supplies, the possibility that oil will be the subject of future disagreements between them is arguably high and thus has a bearing on much of the commentary on Sino-African energy policies (Zha, 1999: 69). Certainly, there is concern that Beijing's procurement of energy supplies will pose a challenge to the global dominance of Washington at a time when levels of cooperation between the two governments on matters of energy are at best weak (Dreyer, 2007: 461). In contrast to the days of Maoist solidarity, contemporary China's economic dealings with Africa are, in the main, based on an unfriendly evaluation of commercial potential. Indeed, to reiterate, China's rapidly developing oil requirements have helped propel Sin-African trade at the turn of the millennium (Taylor, 2009: 44). A select listing of recent contracts signed by China's national oil companies gives a flavor of the geographical extent of Chinese interest in SSA oil. In 2004, Total Gabon signed a contract with Sinopec for exporting Gabonese crude oil into China. Angola received a US$ billion loan in 2005 in exchange for oil deals with China, which added another US$1 billion to the loan in March 2006. Also in 2005, the Nigerian National Petroleum Corporation signed a US$800 million deal with PetroChina to supply 30,000 barrels of crude per day to China. In 2006, CNOOC agreed to pay US$2.3 billion for a stake in a Nigerian oil and gas field (Taylor, 2009: 45). Chinese oil companies also reportedly signed contracts to begin offshore oil exploration and production in Congo-Brazzaville and began oil exploration in northern Namibia with the intent to establish an oil refinery. In addition, Nigeria announced that that it would give the first right of refusal on four oil exploration blocks to CNPC in exchange for a commitment to invest US$4 billion in infrastructure (Taylor, 2009: 46). Clearly, China's energy interests in Africa are growing exponentially. Indeed, in 2006, China imported 920,000 barrels a day of crude oil, or 31 percent of its total crude imports, from Africa. Moreover, Chinese national oil companies are still relatively small players on the continent. “The commercial value of the oil investments in Africa of China's NOCs is just 8 percent of the combined commercial value of the (international oil companies) investments in African oil and 3 percent of all companies invested in African oil” (Downs, 2007: 42). A central criticism of these contracts revolves around the tactics and strategies by which Chinese corporations enter into them. For instance, on February 16, 2006, Chinaafrica, an official Chinese publication, quoted Wang Yingping of the China Institute of International Studies (CIIS), as asserting that “Chinese businesses pay greater attention to protecting the environment when building factories and exploring for Africa's rich reserves in oil”; two months later, it cited, 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” (Taylor, 2009: 47).
The US is obsessed with oil imports from the Middle East and pays little or no attention to SSA. This region supplies as much black gold to the US as the Persian Gulf States. According to (Donelson, 2008) the region also lend itself to just as much (if not more) danger of unexpected supply disruption. For this reason AFRICOM, the new US military administrative headquarters [one of six regional headquarters (HQs) worldwide] was established. The military demand center is devoted to relations with 53 countries (Donelson, 2008). At the end of 2007, SSA accounted for nearly 16% of US daily imports, versus just over 18% for the Persian Gulf States and just over 18% for Canada. The country in seventh place is Angola with 507,000 barrels a day, just behind Algeria. Chad, Gabon, Congo (Brazzaville), and Equatorial Guinea are petroleum suppliers to the US as well, along with minor players including South Africa, Mauritania, Ivory Coast, Ghana, and the Democratic Republic of the Congo (Kinshasa. One country with strong oil reserves is Nigeria, but unfortunately the region is vulnerable to disruption. The destroying of oil pumping stations, pipelines, and other distribution facilities are at the order of the day by rebel groups, opposing the rule of President Umaru Yar'Adua. According to Donelson (2008), The Bold Movement for the Emancipation of the Niger Delta has sent militants in boats through heavy seas to attack the Bonga oil fields more than 65 miles from land, temporarily shutting down production of more than 200,000 barrels a day. But there are also other groups, such as white-collar oil workers threatening the supply of oil if their negotiation demands are not met. But the main issue the US faces is competition from other countries, especially from China. Donelson (2008) points out that the Angola supplied almost as much oil (465,000 barrels daily) to China as they did to the US in 2007 and that number will almost certainly go up as a report by the Council of Foreign Relations states:
“Beijing secured a major stake in future oil production in 2004 with a $2 billion package of loans and aid that includes funds for Chinese companies to build railroads, schools, roads, hospitals, bridges, and offices; lay a fiber-optic network; and train Angolan telecommunications workers” (Donelson, 2008: 2).
The President of Angola, Jose Eduardo dos Santos served as his party's, (MPLA) representative to China, after receiving his degree from the Azerbaijan Oil and Chemistry Institute in the old USSR. This was shortly before he became president. The relationship between dos Santos and the US is not build on a solid foundation and is to say the least very unreliable. There is no guarantee that the country will live up to its promise of providing the US with a continuous supply of oil, after such a long time of instability and civil war. With two of the top seven U.S. oil suppliers vulnerable to supply disruptions at any moment; is it any wonder that the American military presence in Africa is slated for the major expansion (Donelson, 2008).
In a nutshell, before moving on to the strategic-choice analysis, what are the motivations for the US and China to enter the SSA oil market? Trade and economical intentions are high on China's African business agenda, offloading Chinese products in the host countries in exchange for oil and other resources. Traditionally, African states relied on western colonial powers for economic aid and influence. However, the situation is slowly changing with the rise of China and its increasing involvement in Africa. The supply of oil in return for investments and other economical incentives are the driving force for petroleum producing states to establish relations with China. SSA is a source of growing importance in the supply of oil. The region is likely to become as important a source of US energy imports as the Middle East. The US is in competition for access to oil, not only to China but also with India and Europe. Therefore, the US interest in SSA includes promoting democracy, good governance and transparency in economies of petroleum producing states, along with establishing a strong military command to protect its oil interests and monitor the actions of militant groups.
However, diplomacy is an effective tool if preferences and policy beliefs are formulated around certain goals. This is what the next chapter is going to achieve, investigating the policy beliefs of the US and China and the way it contributes to effective oil diplomatic measures.
US-Sino Oil Diplomacy in Sub-Saharan Africa: A Strategic-Choice Analysis
During the twentieth century, 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 communism. 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 producing states toward cooperation with either the US or China, favoring one state over 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 US 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” (Wihbey, & Schutz, 2002: 4). This is the task of US diplomacy. In Sudan, the US government is supporting the initiatives of the Extractive Industries Transparency Initiative (EITI) (The Extractive Industries Transparency Initiative, 2007).
Countries that underwrite the initiatives and programs of the EITI have preferences toward 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, such as the residents of the Niger delta and Southern Sudan and the multitude of multinational oil corporations (MNCs), to formulate their own goals and pursue unique strategies.
However, environmental constrains, such as transportation difficulties and inaccessibility of areas in the Niger Delta, further accentuates the problem actors experience to reach solutions on common grounds. Then there are also religious divisions between Muslims and Christians, ethnic conflicts between the different tribes living in the Niger Delta, the self-interested or ambitious goals of MNCs in the central government. These factors are all having an immoralizing effect on the negotiation process. Rebel groups operating from the Niger Delta, some of 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 (The movement for the emancipation of the Niger Delta, 2011). 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” (Hanson, 2007: 2). 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. Whether, 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 lobbyists are greatly responsible for the chaos and anarchy characterizing the situation in the delta. Accusations that western oil companies are destroying the natural habitat of certain fish populations and are responsible for the ethnic conflict are treated with contempt by oil companies, such as Shell and ExconMobil, (Howden, 2006) 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 pollution. It is all a question of respecting the rights of citizens living in the area and caring about the natural environment, which is 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 necessary that common ground has to be found between the actors.
An environment where actors pursue harmonious interests will be beneficial to all. As long as the local residents view foreign oil workers as intruders on their land, pursuing ambitious, and self-interested goals and not returning revenue into local community development programs, the chances that a final solution to the conflict be reached, are small. 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, AFRICOM is set out to achieve military dominance on the African continent and establish military strategic partnerships with petroleum producing 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 five years had allocated valuable oil drilling licenses to US and Chinese oil companies. Nigeria already supplies the oil needs of these two giants, especially to the US. Sao Tome and Principe and Nigeria (Sao Tome, Nigeria sign oil deal with US-led consortium, 2005) 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 US$4bn in oil and infrastructure projects in Nigeria (BBC News, 2006).
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 (BBC News, 2006). 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 US$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 did not believe the values were there. 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 (Ramirez, 2006).
China is streamlining the oil infrastructure in SSA, according to their specific needs. This is 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 producing countries in the long run will be more dependent on Chinese investments to sustain their economies, rather than China being 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 producing 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 longterm goal of countries that seek 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 (Snidal, 1993: 73). When China can control the economies of petroleum producing 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 producing states, as overseers of its oil operations, cannot be excluded from its African engagement strategy.
By successfully negotiating with petroleum producing states and gaining diplomatic prestige, 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 (Snyder, 1997: 23). The motivation for the US and China is to try and establish alignments with petroleum producing 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 rigs, 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 sealanes to transport crude oil and gas, it might become a point of conflict.
Preference determination is typically specified in one of three ways: by assumption, by observation and by deduction (Frieden, 1999, p. 53). The objective with this section is to explore these ways and determine their analytical value in the context of the actor's preferences in the SSA oil strategic setting, with the main emphasis being 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 (Frieden, 1999: 53).
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, particularly firms and individuals. Firms prefer profit maximization and individuals prefer wealth maximization (Niou, Ordeshook. & Rose, 1999: 54).
However, 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, they are 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 (The leadership functions of Chevron Texaco , 2007).
However, the reality is 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 producing states are getting entangled in a web of either American or Chinese influence. This influence is leading to a state of dependency of petroleum producing states on US and Chinese involvement in their oil industries. In terms of economic considerations, the US and China prefer different outcomes in their oil diplomacy with petroleum producing 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 producing states that points to the maximization of wealth for the state and profit maximization for oil companies. Chinese economic interests focus on establishing stronger trading and economic ties with petroleum producing 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 (Frieden, 1999: 58). 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 (Frieden, 1999: 58).
The individual goals of subnational oil corporations in SSA, such as 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, and providing healthcare and hospitalization to victims affected by the civil war are some goals the US government pursues 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 provide assistance for humanitarian reasons, because its national security policy does not make provision for strong moral and humanitarian principles. Its preference toward the Darfur crisis was not to get involved in humanitarian terms, but to focus on engaging the government on strict economic terms. Due to the fact that China has followed a “going out” policy since the start of the new millennium, it has clear preferences toward establishing alliances with petroleum producing states and has 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 (Johnstone, 2004: 20). 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” (Lake & Whitman, 2006: 43). 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 (Lake & Whitman, 2006: 43). In summary,China's fear that the Khartoum government might choose another strategic oil partner is one of the reasons why China abstains 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 Sudanese 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. During the Cold War, China spread the communist doctrine on the African continent. However, this time around, Beijing is not interested in spreading the communist doctrine, but focus on international trade, economics, and political influence. It remains to be determined, 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 (Brookes, 2007: 1). 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 (Frieden, 1999: 59).
These different ideologies proclaimed opposing doctrines and divided African countries into pro-western and anti-western or socialist governments. In petroleum producing states, these opposing ideologies were certainly cemented in the political thinking of state leaders and shaped their oil industries according to Marxist principles.
With the end of the Cold War in the early nineteen nineties, a vacuum was filled on the African continent, in which 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 US 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 US 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 (Bellamy, 2007: 12).
The goal is to extend US 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 (Bellamy, 2007: 12). Grand strategies extend beyond mere military power. Economic advantages regarding potential rivals are the real currency of inter-capitalist 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 producing states how to rule their countries, but oil and China's growing presence in Africa. What is certain is that US interests are 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 (Frieden, 1999: 59). This poses the question as to which underlying preferences do the US and China have in their oil diplomacy with SSA petroleum producing states. Bellamy (2007) 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 (Bellamy, 2007: 13). 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 (Bellamy, 2007: 13).
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” (Hill, 2007: 9). 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. Although violent extremism is ‘a cause for concern and needs to be addressed,' countering this threat is not AFRICOM singular mission” (US Department of Defense, 2007). The fast pace of change in Chinese-African relations has recently provoked much discussion in policymaking, as well as scholarly circles in Africa, Europe and the US (Alden, 2007: 5). Underlying much of the existing analysis of Beijing's new role in continental affairs are three contrary strands of thought that can be summarized as China's development partner, China's economic competitor, and China as ‘colonizer'.
Alden (2007:5) notes that the first interpretation, development partner, holds that China's involvement in Africa is part of a long term strategic commitment to the continent, 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 (Alden, 2007:5). 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 (Alden, 2007:5). 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 producing states.
The last part of the analysis, discusses preference change in relation to realism in international relations. Realists argue that 1) The state is the most important actor in international relations (Deaton, 1999).This means that national governments are the most important player in the game of international politics. For example, interest groups which promote sound relations between oil companies and the government have no effect on bilateral relations. The US and Chinese governments are the main actors in this environment and are not influenced by the oil politics of domestic stakeholders. 2) The state is a unitary and rational actor (Deaton, 1999). The US and Chinese governments speak with one voice and only one approach will be enacted.The US and Chinese governments are both rational actors because they act only in what they believe to be their national interest and are not diverted by the political games of groups such as MEND. International relations are essential conflictual because of anarchy (Deaton, 1999). In this case, anarchy means that there is no higher authority which can control the interaction of the US and Chinese governments with SSA oil producing countries. Both governments engage the oil environment because they believe it is in their best interests. 4) Security and strategic issues, known as high politics, dominate the international agenda (Deaton, 1999). This means that states' paramount goal is to maximize their power in the international community, and that they are primarily concerned with military power. Although the US and China does not flex their military muscles in a direct standoff, showcasing a military presence, keeps the other side on the back foot. For example, AFRICOM and China's increasing peacekeeping presence on the African continent creates an awareness of each side's relative capabilities. China, also believe in the importance of economics and is according to US analysts advocating an asymmetrical relationship to dominate and manipulate their oil partners.
Using these assumptions show the way in which the US and China are engaged in their own mini 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 questionable and unstable arguments. However, the fixed preference assumption is not always valid and cannot handle all problems (Becker, 1996: 84). In the SSA oil sector, the US and China have to constantly evaluate the constraints of the environment on policy formulation and the argument is that preferences are not fixed. 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. 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. Instead, the fundamental goal of states in any relationship is to prevent others from achieving advances in their relative capabilities (Gilpin, 1981: 87). The international system stimulates and may compel a state to increase its power, at the least, it necessitates that the prudent state prevents relative increases in the power of competitor states (Gilpin, 1981: 88). 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, to allow states with lesser capabilities, such as China, to increase its position in the system and increase its gains. State positionality in the system, however, may constrain the willingness of states to cooperate (Grieco, 1993: 128).
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 benefits 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 economic reasons? With regard 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 (Lipson, 1994: 4). Cooperation on the ground of becoming partners in the SSA oil strategic setting and finding common ground on oil issues is an intimidating thought. The US and China are competing in other influence spheres, for exactly the same reasons, such as 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 (1979) suggests, wars can occur in anarchy, 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 (Waltz, 1979: 113). 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 (Morgenthau, 1973: 6). These attitudes of intolerance 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 SSA 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 changing 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 programs can be implemented to unite the different opinions and preferences of the role-players.
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 have no reason to fight each other. They are merely concerned with their own survival. Nevertheless, they have little choice but to use power politics in SSA to influence the actors and step out as victors in the long run (Mearsheimer, 2001: 3). 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 (Morgenthau, 1973: 6).
Oil dynamics and power politics between local actors and the US and China are reasons for policy belief change and implementation of new strategies. The action for leaders of petroleum producing states, since the arrival of the US and China, is then to sign strategic partnerships whereby preferences are shaped on ideological similarities, socio-economical benefits and assimilations between the rich and poor countries. This strategic belief system means that the policies of the US and China are directly influenced by individual relationships with petroleum producing states and with each other.
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 that supply oil are engaged in internal disputes, and are in a way hostile toward foreign powers that 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 one in 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 SSA are especially prone to mismanagement of oil funds, and this money end up in the pockets of bureaucrats, employees of multinational oil companies and the state controlled oil consortiums. A way has to be found how oil revenue can be fairly distributed between all actors involved. However, in Africa, a fair distribution of oil money will not easily materialize. Internal strife, political instability, civil conflict and the egoistic ambitions of the oil barons dominate the oil industry. A solution to this situation is not in sight for 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 policymakers 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 US 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 is 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 producing 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 presents insight into national security issues. The idea is that oil company's preferences should be part of the national energy security policy and should not be viewed as separate from national interests. An important fact is that both the US and China have to become acquainted with the dynamics of the oil industry in the SSA 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. SSA 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, non-purposeful choices that are without results and direction. The US 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 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 their energy security obligations and impede its own strategic objectives, it will affect the energy strategic setting where these objectives are to be realized. In the Gulf of Guinea, the oil environment presents a challenge to American and Chinese policymakers that will not 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 producing 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 US 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” (Shinn, 2007, p. 3). He added that efforts by others to seek African energy can work to advance US goals in Africa by increasing prosperity and stability. A 2006 US Department of Energy report concluded that Chinese energy demands do not per se threaten US national security interests, but 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 (Shinn, 2007: 3).
It is true to some extent that the US and China are competitors for oil in SSA, but that oil diplomacy with petroleum producing states on a national level are characterized by the different approaches they follow, and not on a competitive relationship. US and Chinese energy advisors on a national lev
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