Shelf of Guinea
Maria Bondareva, Vesti-24
2011, june 04
This is DJIBLOHO. A 105 meter gigantic vessel, the so-called father of the ocean fleet of Equatorial Guinea. She was actually built in the Black Sea Shipyard of city of Nikolayev, where many of the Soviet Union's nuclear aircraft carriers were built.
However her origin is not the only thing that connects her with Russia and the Soviet Union. The sailors and the captain are Russian. They work hard and often round the clock.
They are known for their endurance and they are highly skilled – these are the qualities that make Russians sailors preferred to locals.
Alexander Belyi, Djibloho captain: «We work really hard; we have a very busy sailing schedule. We sail between 3 ports – that of Malabo, Bata and Annobon. It’s very hard. We dock at a port in the morning and leave it at about 1 or 2 pm. Everyday it’s the same. We hardly spend any time staying in port. I think no one else could work so hard but us, Russians. »
Today this vessel is one of the few transport links between the islands of the country. The decks are overcrowded with locals migrating from one island to another with all their belongings – a strange Guinean hobby as we’ve been told, and loaded with goods transported by local entrepreneurs.
Alexander Belyi, Djibloho captain: “As you can see from the cargo we ship, many Guineans are running a small business – they transport timber, food, vegetables and fruit.”
Guinea is a country in west (Atlatic) Africa. The independence of Equatorial Guinea was recognised in 1968 after a century of Spanish colonial rule.
However even after it gained independence, fish, coffee, cocoa and timber exports provided the main source of revenue for Equatorial Guinea. The country’s economy was mainly based on small peasant farming. Only primitive manual labor and as a result - low efficiency. At best the annual exports were less than 9 thousand tons of coffee and not more than a million cubic meters of timber.
The infrastructure lay in ruins; the country’s population lives in huts, suffers from hunger and is affected by epidemics of infections. Guineans live under the poverty line. At that time Equatorial Guinea cultivate close relations with the Soviet Union.
Even today can see the symbols of that old friendship everywhere. Even the helicopters waiting for us now were constructed at a Moscow factory. MI-24, the so-called “crocodile” or MI-26 also known as “the cow” and of course MI-8 – the one which I’m just about to board. By the way, its crew is also half-Russian.
«Ready? Off we go!». From the air you can easily see how dramatically everything has changed. The country was lucky. Better say it pulled out the lucky ticket. In 1984 more than a billion barrels of oil were discovered near the capital Malabo. Ecuatorial Guinea immediately secured itself a 40th position in the Ranking of countries with the largest oil reserves. And of course there’s natural gas. More than 200 billion cubic meters.
Equatorial Guinea has been immediately dubbed the Kuwait of Africa. Foreign partners were not long in coming. US energy giants like Marathon, Exxon-Mobil, Chevron, Amerada Hess Energy were lining up to develop Guinean oil fields. An oil boom brings billions of dollars to local economy. The US invested more than 5 billion dollars in Equatorial Guinea over the first few years.
For example in 1991 the shelf produces 160 tons of oil per day. Over the next 4 years - the output increases almost 10-fold. In the late 90s annual oil exports are valued at up to 25 million dollars.
Americans start developing a new oil field -Zafiro. Oil becomes Equatorial Guinea’s main source of income.
The Gulf of Guinea. It’s the true 'center of the surface of the Earth,' as this is where the prime meridian meets the equator.
But the Gulf’s main treasure is off-shore oil rigs and production platforms. 350 thousand barrels of oil are produced here daily and at the current rate of production these proven reserves should last 150 years.
That is why the Gulf of Guinea is often considered to be no less important than that of Mexico.
And in terms of oil money distribution, Equatorial Guinea has a lot to learn from. You will hardly recognize the country. Firstly, its population saw a three-fold increase! Parents get a subsidy for each new baby. There are financial awards for higher education.
Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea: «Thanks to oil production, Equatorial Guinea is seeing a massive inflow of funds and it’s important to properly manage the finances. It’s vital to invest the money into development of basic industries such as agriculture and support livestock farming. Education is also very important.»
Training is the main focus. Even now foreign companies are reluctant to hire locals. At least they try to keep them away from high-tech production. Employers prefer more qualified personnel from the Philippines, Spain, Portugal, China and of course Russia.
Despite such an increase in economic growth, in rural areas we still met some guineas who became frozen with fear when they saw our shooting team. They said they were afraid of the camera as they believe it can take away their life. That’s the industrialization…
But the vast scale of construction is really impressive. An impeccable highway system –a dream of a driver - is running through dense jungle. Thatched huts were replaced by quite European looking villas. And it’s all been done in the last 8 to 9 years. Cement factories have started two- shift production to respond to ever increasing demand.
Faustino Ndong Edo, chief plant operating engineer: “If we don’t have cement for construction, we’ll have nothing. Our country’s cement consumption is about 1 million tons a month, and this is a lot for us, and the demand for cement is constantly increasing. This plant produces about 280 thousand tons and we are planning to expand production facilities as our current capacity can hardly meet demand.
So half of the country is now a huge construction site. Here’s a foundation which has been laid for a huge sports stadium to host Pan-African games.
By the way, Equatorial Guinea’s industry is not all about oil. Global demand for methanol is rising – a new methanol plant is on the way.
Oil hasn’t completely overshadowed more traditional exports such as cocoa, coffee, and of course, timber. They are still an important source of income. Equatorial Guinea is famous for rare tropical timber species.
Before oil was discovered, the country’s economy was mainly dependent on timber processing.
This is tropical timber – it is exceptionally hard and heavy – each log weighs about 40 tons. Logs are cut into plates which can be later for construction. Then plates or whole logs are packed to be shipped, mainly to European countries.
The growth of the manufacturing sector has given a boost to electric power industry. Old power stations do not have enough electricity-generating capacity to supply so many new businesses. This is why a new hydroelectric power plant is being built specially to supply future plants with energy. By the way, it’s such a breathtaking place. Power is generated here by a waterfall. (his namesake is a famous local ship – Djibloho).
Guineans know the value of money. National riches are not easily dished out to foreigners. They are welcome to do business in Equatorial Guinea, however, by the country’s law, a controlling stake which is more than 50 % of the company is still held by the state.
Guineans were quick to shift part of their expenses onto those who make money from exploiting local natural resources.
Let’s take for example the large scale housing programme. Taking into account 100 per cent humidity and often tropical showers, which may last for weeks, palm leaves roofs are being replaced with aluminium ones. And this campaign is also partly sponsored by oil tycoons.
But this is not the only benefit for locals. Such programmes can help fight unemployment. Let’s take for example this factory producing roof covers. Several such factories have been built, creating hundreds of jobs.
Gamingo Miteo, aluminium roofing factory worker: “We are very poor. I’ve just finished studying; all of my former co-students are out of work. It’s good to have a job and earn some money, of course, we are pressed for money.
The country is not big, so the president personally supervises all important construction projects. Though nobody can tell how many people exactly live in Equatorial Guinea. Officially it is about 650 thousand people, but due to a rise in uncontrolled migration, its population increased to 1.5 million people. By comparison, about the same number of people live in the Russian city of Novosibirsk.
Well, for the statistics it is seen as a plus rather than a minus. It allows the government to boast rapid economic growth. Annual GDP per capita is about 38 thousand dollars (ranks 26th in the world).
Of course it’s unlikely the country will ever be able to repeat the success of 1997, when Equatorial Guinea’s GDP skyrocketed by a whopping 154%. Most of the cream has already been skimmed off the oil deposits.
However despite a slowdown in growth there’s still something to be proud of in the new millennium. In 2004 the economy grew by 45%, in 2007 – by 25% and during the 2008 crisis the country’s GDP increased by 13%.
Russian companies are not new to doing business in Equatorial Guinea. Russia has long been considering a potential partnership. Lukoil has been in talks with the country since 2006 but hasn’t made much progress yet. It’s not easy at all to break US stranglehold on Guinean oil. However last summer Gazprom Neft managed to sign an agreement with GEPetrol to develop two off-shore blocks and the deal will bring in about 3 billion dollars in investment.
Equatorial Guinea president Mbasogo will meet his Russian counterpart Dmitry Medvedev, and he’ll talk not only as Chairman of the African Union but also discuss bilateral cooperation with Russia.
Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea: “We have never stopped being partners with Russia. Russia has always rendered invaluable support in the Defense and Security sphere. And we are ready to strengthen our economic cooperation. We are planning to have substantial talks with president Medvedev. Our relationship with Russia is based on mutually beneficial cooperation. We are interested in Russian technologies, but I think Equatorial Guinea also has something to offer – our natural resources.”
Unlike the Unites States, Russia doesn’t have a significant presence in the country so far. If we take a look at the map now, we can see that Russian companies mainly operate in Gambia, Sierra Leone, Ghana, Zimbabwe, Mozambique and Eritrea. They mostly invest in the mining and oil industries. In contrast, the US has overwhelming presence all over the continent.
Alexander Nazarov, chief analyst OAO “GPB”: Russia is an exporter; moreover it’s the biggest exporter of oil in the world. Taking that into account, it could have made more sense to develop natural resources in the country. On the other hand, any company will find it reasonable to diversify its resources base, and these reserves will be economically different in terms of both geology and taxation. Russian companies want to take advantage of this difference, and along with US and Chinese firms seek contracts for operating in Equatorial Guinea. But I want to underline, unlike the US and China, Russia is not desperate for Equatoguinean oil”.
Another competitive industry for cooperation with Guineans is tourism. Virgin beaches, breathtaking views – there’s a lot to offer. Monte Alen National Park is a real treasure. There’s even a golf resort.
Unlike many other African countries, in Equatorial Guinea armed conflicts are long-forgotten. The main religion in the country is Christianity, or to be more precise Catholicism. It’s not without an ethnic tinge though.
However, Equatorial Guinea’s infrastructure is still quite poor.
Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea: “We are investing heavily in tourism infrastructure. We are building airports, ports and other infrastructure facilities such as hotels, entertainment centers for tourists. We have fabulous beaches but they need to be equipped with all the necessary facilities. We are also seeking to develop ecotourism: a significant part of our territory is a National park where hunting of some species of animals is prohibited – an inspiring place for lovers of wild nature.
Corisco island is gem of the Gulf of Guinea. Construction is in full swing here. A tourism center is in the pipeline. This place is wild and authentic. But a new airport runway is almost completed. Hotels and bungalows are being built. And according to the local authorities, next year everything will be ready.
The view of the country’s amazing landscape from a helicopter is breathtaking indeed. Equatorial Guinea has every chance of making not only oil but also tourism the stronghold of its economic stability. If oil euphoria doesn’t get in the way…