Esso’s Dictator

English translation published 12 November 2010
Foto: REUTERS/Jerome Delay

Even though Norway is a big producer of crude oil, we import it in large quantities. The value of Norway’s oil import last year was all of 3.6 billion Norwegian kroner. Norwatch has now revealed that a third of the oil that reached Norway last year stems from one of the most corrupt and least democratic countries in the world, Equatorial Guinea. The oil arrived in tankers for Esso’s plant in Tønsberg.

By examining import figures from Statistics Norway, Norwatch has concluded that last year the small African state of Equatorial Guinea was the most important country for export of crude oil to Norway. In fact, Equatorial Guinea was Norway’s third most important trade partner in Africa last year. Norway then imported crude oil from the country for the staggering amount 1.2 billion Norwegian kroner. Altogether, the figures from Statistics Norway show that Norway has imported oil from Equatorial Guinea for 2.3 billion Norwegian kroner from 2005 to 2009.

Esso does not wish to reveal how much it pays in taxes to the country’s dictator when it purchases the cargoes for Tønsberg.

Gangster Economy
Equatorial Guinea, a small country on the west coast of Africa, is a place where protestors are imprisoned and 77% of the population lives in deep poverty. The country ends up at the bottom on international living-condition examinations. The mortality among young children is increasing in only four countries in the world, and Equatorial Africa is one of them.

In parallel with the poverty, statistics show that the country is actually enormously rich. The gross national product per inhabitant is among the highest in the world – and exceeds both Denmark and Finland. But the tremendous income from the oil industry does not benefit the population. It ends up in the pockets of the country’s chosen elite and is invested in the president’s properties in London and Paris and on Malibu Beach.

The president’s son’s shopping mania is the symbol incarnate of the elite’s affluence. In a brief period in France he bought several luxury cars, each valued at up to NOK 8 million – several Bentleys, a Lamborghini, and two Bugattis. Even though the official income from his home country’s department of forestry is US$4000 a month, the president’s son has at his disposal his own private jet. In the course of 2005 to 2007 this social lion diverted US$75 million into the USA, according to the organisation Global Witness.

A series of the presidential family’s financial transfers have been carried out in a spectacular gangster manner through their bank in Washington, Riggs Bank. Bank officials there have for several years walked into the bank premises carrying heavy suitcases delivered by Equatorial Guinea’s ambassador. Sometimes the suitcases were stuffed to the brim with unopened bundles of cash. Up to 30 kg of hundred-dollar bills, with a value of US$20 million, have been deposited at a time. At the maximum, the American bank administered at least US$700 million and 60 different accounts belonging to the president, the president’s wife and their allies. Equatorial Guinea was, and is, among the most corrupt countries in the world.

No one knows which banks administer the presidential family’s money sack today.  After the U.S. Senate revealed the Washington bank’s suitcase habit in the middle of 2000, the billion-dollar fortune disappeared, and the bank went bankrupt.

There is little information available on the size of the income the country actually receives from all this oil production.

Critics of the regime are monitored and imprisoned or frightened into exile. The government refuses to tell how much it receives in taxes and royalties; analogously, the oil companies won’t disclose how much they pay. The government has attempted to improve its reputation by joining a voluntary international agreement for transparency in the oil sector, Extractive Industries Transparency Initiative (EITI). But this spring the country was refused admission because it does not fulfil even the most basic criteria for membership. EITI has never previously given a possible membership country the cold shoulder in this manner.      

Blacklisted
The oil that regularly arrives in Tønsberg stems from the so-called Zafiro field, which speeded up President Obiang’s oil economy. This offshore field is operated by the American oil giant ExxonMobil, a corporation that the U.S. Senate has pointed out as jointly responsible for slipping money  into the pockets of the presidential family.

It was precisely these accusations against ExxonMobil in Equatorial Guinea which made ethically conscious investors in several countries, including the life insurance company Kommunal Landspensjonskasse (KLP) in Norway, blacklist ExxonMobil from their investment portfolios. The blacklisting caused ExxonMobil great discontent. When the corporation’s senior executive Lee Raymond met his employees in Oslo in 2005, the question of KLP was raised. Raymond was disappointed that KLP judged ExxonMobil “before proven guilty”, and he rejected the accusations as untrue.

“ExxonMobil has the highest corporate code of business standards and strict requirements for transparency in its dealings with governments,” Raymond asserted during his visit in 2005.

But there is often a difference between theory and practice.

ExxonMobil is the parent company of Esso Norge AS and owns the refinery at Slagentangen outside Tønsberg. The refinery produces mainly petrol for the Esso stations – plus heating oil. The main part of what is exported to Norway is sold on to other countries after being refined.

Esso Norge confirms to Norwatch that it has received the cargoes. But despite ExxonMobil’s old promises of transparency with regard to other countries’ governments, they still refuse to tell how large a part of the NOK 1.2 billion has been paid to the Obiang government in taxes.

“I have checked, and this is among the commercial information that we do not wish to disclose,” Erik Hauge in Esso Norge told Norwatch.

“Why?”

“That’s the way it is.”

“Would you say that it is problematic to refuse to tell how many millions have been paid to a dictatorship?”

“I am not authorised to speak about that. ExxonMobil has a supply organisation that takes care of logistics and supply of crude oil for the refineries, and we communicate with them. We have no contact with Equatorial Guinea or other countries from which the raw materials stem.”

“Whom in ExxonMobil would you recommend that I speak with to obtain an explanation of transparency and EITI?”

“I have spoken with those responsible for Africa, and this is the answer I receive.”

In 2009 ExxonMobil was received back in from the cold by KLP, since the latter had played “an active part in the development of the anti-corruption programme EITI. Dialogue with the company and other interested parties confirms a considerable interest in preventing corruption and influencing the authorities in Equatorial Africa.” According to KLP, the American investigation of Exxon/Mobil has been shelved.

Other Oil Industry
Norwegian companies have from day one been active in developing the oil fields offshore Equatorial Guinea, which officially has Africa’s fastest-growing economy. In the forefront sailed the armada of Norwegian seismic vessels, which charted the country’s ocean floor. Then the rig companies, the underwater technology companies, and the floating production, storage and offloading (FPSO) vessels arrived. The Norwegian companies have worked for exactly the same oil corporations as those named by the U.S. Senate for having slipped money into the suitcases for the country’s elite.

In addition to the supply industry, the Norwegian oil company DNO has 6% ownership in one of the offshore blocks, where the state oil company is the operator. There is no activity there right now, but they drilled during the years 2004-2006, and at present DNO is waiting to receive the green light from the authorities to start extracting oil in the block. In addition to DNO, the Oslo stock exchange-registered oil company PA Resources has owner’s shares in two offshore blocks.

FACTS    
-    Thanks to the oil industry, Equatorial Guinea is one of the countries in the world with the highest BNP per inhabitant.
-    Seventy-seven per cent of the population lives in deep poverty.
-    The country is ruled by President Obiang, who seized power in 1979, when he shot his president uncle.
-    Exactly how large the sums are that the president possesses in secret accounts abroad is unknown.
-    There are two refineries in Norway: Statoil’s plant at Mongstad and Esso’s refinery at Slagentangen outside Tønsberg. Last year the Esso refinery imported crude oil from Equatorial Guinea for NOK 1.2 billion.