SAN RAMON, Calif. (AP) — Chevron Corp. said Tuesday that it has hit oil in two wells in the Atlantic Ocean about 40 miles off the coast of the Republic of Congo.
The wells, in 2,600 feet of water, were drilled to about 6,000 feet, and each was tested and oil flowed, the company said in a statement.
“These discoveries further demonstrate the potential of West Africa where Chevron has made significant investments to develop new energy resources,” company Vice Chairman George Kirkland said.
The wells are in the Moho-Bilondo permit area. A Chevron subsidiary holds a 31.5 percent stake in the permit area and is in a partnership with Société Nationale des Pétroles du Congo and Total E&P Congo.
This should be good news, and for countries like the US and Canada, finding oil is hitting the jackpot, but the DRC suffers from previously having mortgaged off the majority of its oil profits to the French company Elf Aquitaine.
In the early 1980s Congo received over a billion dollars a year in oil revenue. And yet there was no corresponding economic development during the same period.
The oil earnings were used to fund a huge expansion in imports to meet the ever-increasing demand for wheat and cheap rice, maize and frozen meat.
Back to basics
The civil service swelled beyond all recognition, increasing from 3,300 employees in 1960 to 80,000 employees in the 1990s. The payment of salaries took up a significant proportion of the budget, while the expenditure on rural development dropped.
The rural population resorted to hunting wild animals and subsistence production of manioc, while the percent age of land under cultivation fell to only 2%.
While the politicians got rich, the budget suffered from deficits, and Elf was approached to lend money to sort out the mess. Naturally, the company obliged, but at high rates of interest that only added to Congo’s problems in the long term. The debts were (and still are) repaid at source, in the oil that Elf was extracting, which was valued at a fraction of its real worth.
The oil-backed loans caught Congo in a trap of inescapable poverty. The more the politicians borrowed, the more oil was taken by the multinationals at source in exchange for debt repayment.
In a country desperate for infrastructure and stricken by sexual violence and poverty, being stuck in this crediting limbo is something of a life sentence for the Congolese women. When we look for solutions in the region, like in a Jane Austen novel, economics can never be left out of the conversation.by