When the price of oil hit $50 a barrel last week, sending ripples of anxiety around the world, a threat to Nigeria's supplies was blamed. Maurice Walsh reports on the challenges posed by unreformed Africa's emerging oil wealth.
Another scramble for Africa is under way. It's commercial instead of territorial, but it shares with the imperial conquests of the late 19th century the desire to acquire one of the continent's most prized assets: oil. Soaring oil prices and advances in exploration techniques mean that over the next few decades Africa will be one of the most important sites of oil exploration in the world.
This time, instead of seeing their wealth disappear to European capitals, Africans are poised to earn billions of dollars. But oil windfalls are notoriously difficult to manage, even in highly-developed economies. Many of the new African producers are impoverished countries with weak states and fragile or non-existent civic institutions. Without the right kind of help, the oil riches will become just another squandered opportunity.
Africa has only about 7 per cent of the world's oil reserves but with other supplies inexorably running down and world demand spiralling these "marginal barrels" become ever more important. African countries could provide one-fifth of new oil to world markets over the next five years. Chad has already started producing; Mauritania is due to pump its first oil by the end of the year and Sao Tome should join them in less than two years. The vast inflow of oil wealth to Equatorial Guinea over the past few years prompted a coup plot earlier this year by an (inept) collection of British mercenaries hoping to overthrow President Obiang.
And the biggest producers in Africa, Nigeria and Angola, are preparing for a new wave of cash from recently-developed offshore sources. In Angola alone government income from oil is expected to double over the next six years - and this on the assumption that the barrel price is half of what it reached today.
In the latest generation of African oil producers, the prospect of massive windfalls has conjured up dreams of lifting entire populations out of poverty. On the island of Sao Tome - some 200 miles off the west coast of Africa, along the line of the Equator - we visited a little fishing village called Santa Catarina where the locals were taking part in a government-sponsored survey asking people what should be done with the oil money.
Within a few years Sao Tome could be earning $100 million a year from oil. In theory, given that the population is only 150,000, average incomes could be quadrupled in a few years. But nobody in Santa Catarina was dreaming of lottery-style personal enrichment. Their shopping list was practical but potentially transforming: a nursery, a big hospital, electricity, and a plan to eradicate malaria which infects half the population.
Most people in Sao Tome are the descendants of slaves shipped from elsewhere in Africa by Portuguese colonisers. In the 17th century, Sao Tome was an important and lucrative staging post in the world slave trade. In the 19th century it sold high-quality coffee to the world market. And by the early 20th century, the Portuguese planters were making a fortune from producing the world's best cocoa. None of these booms left any lasting prosperity. And if the experience of the last 40 years is anything to go by, oil will be little different.
Economists call it the "curse of oil". Over the last few decades a pattern has emerged in countries where oil has been discovered in which euphoric dreams of prosperity invariably lead to ruin: millions migrate to the cities to get a share of the oil money; traditional occupations like farming wither and die; the cascade of easy money breeds corruption among a new, privileged class dependent on imported luxuries; and rulers with delusions of grandeur steal billions of dollars or squander it on outlandish schemes of little value.
But some economists believe this hard-won knowledge from decades of boom and bust can be put to use to reverse the tide of history. Africa is today the laboratory of the effort to solve the oil curse, one of the most enduring economic problems of the last half century. Can it be done?
The most direct attempt to lift the oil curse is being made by the World Bank in Chad. Chad is twice the size of France but has only a few hundred kilometres of paved roads. Landlocked and largely infertile, it was the most neglected colony in Francophone Africa. Since independence, in 1960, there has been a sequence of civil wars, an invasion by Libya and constant French interference.
Last year a consortium led by Esso began pumping oil from southern Chad through a 1,000-kilometre pipeline to tankers off the coast of Cameroon. The government in Chad - which expects to make at least $100 million a year - has made a pact with the World Bank about how the oil revenues will be used. Chad's share of the oil profits is sent directly to a bank account in London which is open to online scrutiny from an oversight committee representing the government and groups such as churches, trade unions and human rights advocates. By law, most of the money must only be invested in health, education, roads and water distribution.
So far so good. But the risks are huge. Early on, it was revealed that President Idriss Deby had spent $4.5 million from a "signing on" bonus paid by Esso to buy weaponry to wage war against the rebels in the north. The World Bank's director in Chad, Greg Binkert, told us they took President Deby to task and that he now admits he made a mistake which wouldn't be repeated. But the government's main oil negotiator told us he couldn't rule out using the oil money for weapons again in a national emergency.
The crisis in Darfur, across Chad's border with Sudan, shows how easily such an emergency might arise. It was from Darfur that President Deby launched his own bid for power 15 years ago and there is always a possibility that Chad could be drawn into a border war.
Shortly before we visited Chad, President Deby had to put down a mutiny by troops at a barracks in the capital Ndjamena: there were roadblocks on the streets of the capital and nobody was entirely sure if it had been permanently resolved. There are also signs that the oversight committee will not be allowed to do its job. Throughout this year the independent members of the committee have repeatedly complained that information was being withheld, and that they say they don't have enough resources or time to do a proper job of scrutiny.
In Sao Tome people are equally suspicious of what their rulers will do with the oil money. Early dealings with foreign oil companies have reinforced a popular suspicion that politics is the preserve of a small magic circle of powerful people dedicated to advancing their own interests. An obscure Nigerian-owned company was sold exploration rights at a fantastically low price, concessions which would cost Sao Tome millions of dollars as the oil came on stream. After his election in 2001, President Fradique Menezes renounced the contracts and began to renegotiate them.
In July last year while he was visiting Nigeria, a group of former mercenary soldiers tried to overthrow him. They're still free and active: any morning you can run into them intriguing over cups of coffee and glasses of hot milk in a cafe just across the road from the Presidential Palace.
President Menezes told us he receives phone calls from people every day passing on the gossip about another coup in the offing.
In the meantime he's trying to pass an oil law to guarantee that future deals will be transparent. He's asked for advice from the American economist Jeffrey Sachs, the author of some seminal work on the oil curse and a peripatetic crusader for strengthening markets in the developing world.
The risk for Sachs and for the World Bank in Chad is that they will lose their influence once theoil starts flowing. For instance, Esso already has its eye on developing other fields in Chad; they told us it won't stop pumping oil if President Deby reneges on his commitments to transparency.
Some argue that international donors should refuse to support oil exploration in any country without an accountable government.
But no African government with oil on its territory is likely to leave it in the ground, and so the opportunity for ending the oil curse is a race against the overwhelming pressure of supply and demand.
• Maurice Walsh reports from Sao Tome in the first of four programmes, Profit and Loss: The Story of African Oil, on the BBC World Service tomorrow