Published in English: 11 August 2009
The installations in the Seme field are in a state of advanced disintegration, and oil is leaking out into the ocean, according to a letter that the small West-African nation Benin sent to the Norwegian Ministry of Foreign Affairs in April.
In the letter Benin emphasised that the oil leaks are causing great damage to the environment and threaten the local fishing industry. Norway is asked to contribute economically and technically to the cleaning up. The letter, which Norwatch has had access to, was sent by way of Benin’s embassy in Copenhagen.
The Seme development is an old problem for Norwegian foreign aid. With aid from Norway and the World Bank, the poor African nation was, in the 1980s, supposed to become rich by extracting oil resources. The Norwegian company Saga Petroleum (later bought out by Norsk Hydro, now StatoilHydro) developed the Seme field and was to run it on behalf of Benin’s authorities. The five rigs that are now rusting out in the ocean were produced in Norway by Aker Kværner and financed through loans raised in Norway by Benin.
After a few years’ operation, Saga Petroleum was thrown out of the country in 1985, and the next year the contract is supposed to have been transferred to a Swiss-based company, Pan Ocean. They promised much greater production and greater profit but were unable to fulfil the promises.
After a short time this company, too, was out of the country. Saga was asked to return but said no. Benin ran the field until 1988. With the help of the World Bank Benin was then able to engage Ashland, but Addax Petroleum was also supposed to have been in the picture at one point.
The whole effort became a great disappointment, and in 1998 the field was closed. Benin was left with a large debt and a ticking environmental bomb.
“Saga Petroleum soon developed problems. There was a lot of water in the oil, and there was little pressure in the reservoirs. The field therefore never produced as much as the estimate had indicated. In addition, Benin had obtained both a poor loan agreement and a bad deal with Saga Petroleum. The production was small; the expenses and the interest were high, whereas the price of oil maintained a low level. Benin was left with only 3% of the profits,” Ingolf Andersen told Norwatch.
Andersen is an engineer and has worked in the oil business. He relates that he has received an official mandate from Benin’s Oil Minister, Barthélémy Dahoga Kassa, which consists not only in mobilising help to clean up the old rusty installations but also in promoting oil development in Benin. Andersen is the project coordinator for the small volunteer organisation Action Impact in Benin and on a daily basis works for HJK Offshore Solution. He took on the Benin job because of his personal interest in improving the conditions and is doing this without compensation.
Through his contacts in Benin, in March this year Andersen got out to the installations on a supply ship and was able to document the condition of the rusty rigs. In addition, an underwater camera showed clumps of oil leaking out into the ocean. On land both tanks and other equipment have been left standing around deteriorating. Andersen has made a small report in which he has collected information on the Seme field: Status report: Seme Oil Field with installations and connected Onshore Facilities.
There are also several others working with the problems at hand at various levels. Svein Olsen, former head of Bergesen Offshore, is involved in setting up a meeting between Benin’s oil minister and Norway, as is Benin’s consul in Oslo, Olav Råmunddal. Svein Olsen told Norwatch that it is very likely that a meeting between Norway and Benin can be arranged for after the summer vacation.
The Seme field is an old matter that has turned up at regular intervals. In 2000 Norway cancelled Benin’s debt for NKR 246 million (at that time 28 million dollars), which was incurred to finance the development of the Seme field. In this connection Hilde Frafjord Johnson, then Minister of International Development, made some crass statements to the Norwegian News Agency:
“This is a stain on our reputation. It is not fair that they have to pay interest and compound interest on a loan that we have contributed to setting up. Norway had strong self-interest in this. What we are doing now is to right a wrong.”
Frafjord Johnson compared what happened in Benin with the ship export campaign in the seventies, when ships were exported to developing countries to save the Norwegian shipyard industry.
Nine years ago attention was also focused on the great environmental dangers of the closed plant, but nothing has so far been done.
Today Benin is still struggling with the consequences of the unsuccessful oil venture. Even though several parties have operated the field since the start, Ingolf Andersen believes that Norway has a great moral responsibility in cleaning up:
“Norway has an ostrich policy with regard to the Seme field. It is a matter of an abscess in Norway’s portfolio which can damage Norway’s reputation. If we wish to sell Norway as being at the top of the class in the environment and oil politics in this region, then we can not continue hiding skeletons in the closet. We must get them out and work on them,” Andersen said.
“It’s not matter of Norway having to foot the whole bill, but they should have a constructive approach. Norway has both the technology and the knowledge to solve the problem and remove an environmental threat from one of West Africa’s most abundant fishing areas.”
He believes that the first thing that must be done is to carry out a study that sets a price framework for the cleaning up of the Seme installations.
Has Not Answered Benin – Yet
So far Norway has not formally answered Benin’s enquiry. Norwatch has, however, been informed that the Ministry of Foreign Affairs is working on the matter:
“The Ministry of Foreign Affairs has asked the Oil for Development programme for advice, but we not yet dealt with the letter formally,” Kåre Stormark, director of the Foreign Office’s Department for Regional Affairs and Development, told Norwatch.
That the letter has not yet been answered is due to the fact that, among other things, a meeting between Norway and Benin’s oil minister was supposed to have been held, but the meeting before the summer holiday was cancelled.
Senior Adviser Svein Erik Heglund in the Energy Department of the Norwegian Agency for Development Cooperation works in the Oil for Development programme. He has told Norwatch that Benin is not one of Norway’s partner countries and therefore does not belong under the field of responsibility of Oil for Development.
“We have sent a preliminary answer to the Ministry of Foreign Affairs, requesting that Benin become a partner country before we can possibly do anything. The enquiry also applies to aid in cleaning up after an oil field and does not belong under the scope of the responsibilities of the Oil for Development programme. We provide assistance on petroleum administration.
“Norway could nevertheless, on the basis of other considerations, decide to help Benin and ask the Oil for Development programme to contribute the expertise?”, Norwatch queried.
“Yes, of course. But then we would have to receive an order for this,” Haglund said. He has worked for Saga Petroleum and is well acquainted with the matter.
All photos: Ingolf Andersen