Most of us are somewhat familiar with the adage that only Allah can make a perfect carpet.  Therefore, all Islamic carpet makers leave some small flaw in their carpet patterns. Well, in our pursuit of continued success in the international oil exploration and development business we left our flaws in Sub-Saharan Africa with a big chunk of change devoted to Cabinda, Angola. It becomes a spreading cancer when you grab an opportunity in Republic of Congo, pick up one in Cabinda, the neighboring enclave of Angola, and then cap it off with a position in Democratic Republic of Congo. That combination of countries is like a trifecta of cancerous places and corrupt politicians. We were one of the few who managed to escape prevalent corruption. On the other hand, we were among the overwhelming majority who lost money by following the rules.

When I first went to Luanda, Angola, I was amazed at the number of skyscrapers surrounding the waterfront. Therefore, I was impressed how developed it was until I spent a few more hours there. In addition to the common Portuguese language, the business and cultural ties between the former colony, Angola, and Portugal are quite close. A Portuguese acquaintance who specialized in commercial relationships in Angola was retained to manage the construction of several of the skyscrapers in Luanda on behalf of foreign oil companies. Jose Eduardo dos Santos, the President of Angola at the time, asked him to oversee a $1 billion government fund for groups of indigenous people.  Once the fund was established, he went back to evaluate the investment performance and all of the money had disappeared. When he advised the president, he was told to forget about it. Nonetheless, the Luanda skyline, shown below, is impressive though the streets surrounding the buildings were dirt then and the beach needed a lot of cleaning attention.  

The state oil company of Angola was designated the operator of our oil concession in Cabinda. Although the state oil company had vast oil production, they had never operated anything themselves and the higher levels in the organization viewed it as a great opportunity to get a piece of the pie for themselves. I offered a joint venture structure where we would utilize expertise from all parties particularly as we had operated oil fields all over the world.  They laughed at me and somewhat later I realized it was a golden opportunity for them to line their personal pockets at the expense of their gullible joint venture partners. When I first encountered our border crossing from Republic of Congo into Cabinda, shown below, my reaction was “What have we done and why are we here?” Several years were required to extricate ourselves and even once we had been paid a modest sum for our part of the venture, my Portuguese associate said he needed $1 million to cover certain expenses and then it was my turn to laugh.  

Angola has generated vast sums of oil revenue though it seems to have disappeared somewhere between the oil wellheads and the people. Thirty percent of the population live in poverty on an average of $2 per day. Moreover, the living conditions of those outside of the small circle of wealth is on an entirely different scale as pictured below. Further, one night in the state capital of Luanda over a spicy Portuguese dinner with an Angolan associate, he broke into a sweat from his recurrent bouts with malaria. To him, it was just one of those things though one would have thought that the oil wealth of Angola would have been directed toward eliminating malaria. Years later, the normally smug western world was not a shining example in the fight against Covid-19. 

If you have a presence in the international oil industry, you are most likely a subscriber to Upstream which is a weekly paper that is the bible of the industry.  Moreover, if you have even a general interest in oil-rich international country news, it is the source of political and social coverage that you would not find elsewhere. It may well be that Angola is not on the list of countries that most people find keenly interesting.  However, a recent front page Upstream news story struck a chord most everywhere, Anger as Angola Lines Up National Parks for Oil and Gas. Moreover, people in the U.S. might take a deep breath as our most recent president issued an executive order to open the heretofore closed Arctic National Wildlife Reserve to oil exploration. As climate change transforms life for most of us, why not destroy the natural habitats of wildlife? Angola needs money so they are planning to open the gates to 14 national parks to oil, gas and mining activities.  

So where has all of the Angolan money gone? An article in Upstream entitled Graft Probe Shows a Need for Transparency which outlines the “oil curse” in underdeveloped countries coupled with the acrimonious debate over climate change. Maybe it all goes together – curse, climate change and corruption. Perhaps it is not surprising that Isabel dos Santos, shown below, the lovely daughter of former Angolan president Jose Eduardo dos Santos was implicated in the embezzlement of funds during her tenure as the head of the Angolan national oil company, Sonangol, our former partner in Cabinda, Angola.  Forbes magazine lists dos Santos as Africa’s wealthiest woman with a net worth of $1.5 billion though she comes from a country mired in poverty. 

Sadly, a banker associated with Isabel dos Santos was found dead in Portugal with a bullet in his head just hours after Angola’s attorney general charged dos Santos and him with money laundering. The government is seeking to recover $1 billion that mysteriously disappeared up in in smoke and it was not a gas flare in an oil field. It is not only the locals mired in alleged theft of this magnitude as Shell and Eni of Italy have been caught up in money laundering cases in the region. Our former president refused to endorse anti-corruption legislation following persuasion from the American Petroleum Institute that it made U.S. companies less competitive internationally. To the contrary, the U.S. Foreign Corrupt Practices Act and the UK Anti-Bribery Act give foreign companies an excuse to turn a cold shoulder to demands for bribes and kickbacks from corrupt foreign officials. Maybe a couple of major oil company CEOs serving hard time in prison might change that direction.  Nonetheless, dos Santos is smiling as she hangs out in safe havens and escapes the disease and dirt roads of her impoverished, oil-rich country.  

Well, a billion here and a billon there soon adds up to serious money.  In reality, the actual sums are staggering.  Life on the run in the Swiss Alps does require warmer clothing such as that worn by Dos Santos. Her brother, Jose Filomena dos Santos, was caught in Angola and is facing trial as he was accused of money laundering and embezzlement for transferring hundreds of millions of dollars out of Angola when he headed the country’s Sovereign Wealth Fund. I probably should check with my former Portuguese associate to see how he is doing though contacts with him could be hazardous to anyone’s health.