Signs Of Change

We are beginning to see, thankfully, a stirred-up multinational oil industry that recognizes the radical nature of the threats it is facing in Nigeria from several states and a "runaway" House of Representatives - whose latest great idea, by the way, is to renounce all of the nation's foreign debt even while there's a budget surplus due to the booming price of oil.

The same kind of nonsense is cropping up again in Sao Tome, too, where a last-minute change to the Production Sharing Contract so widely hailed a few weeks ago at its signing has held up payments forthcoming from it.

As the redoubtable stockhocker70 put it on the Raging Bull ERHE message board, "These people are their own worst enemies."

There is a lot of truth in that statement. If Nigerians and Sao Tomeans sincerely believe they are getting a raw deal when they risk nothing and reap billions from hard-to-reach oil that once found is stolen by admirals, attacked by insurgents and taxed to death by the government - where corruption ends up denying the royalties to those who need it most - they will love having China as a partner.

China promises money as though they printed it from mid-air, and China signs contracts that offer such wealth as only long-ago emperors once enjoyed. But take it from the United States: a deal with China is a deal that will benefit China first, last and always. The promised payments become mired in political problems; the deal-makers get replaced; the production schedule slides backwards as other priorities take its place.

Meanwhile, you have lost some of your reliable Western partners, who at least can be shamed into paying up; you don't have standing as a human being equal to a Chinese - at least in their eyes - so you can't shame them. You can't push them, you can't prod them, you can't get them to move on any schedule but their own - they're sort of like ExxonMobil on steroids. Then they start to nibble at you, a little here, a little there, and steadily more and more, pleading the vast poverty of their 2 billion people and ignoring the vast wealth of their 20 million; and you have no place to go. Not only do they steadily suck up all your natural resources, they flood your markets with their goods and make your economy dependent on theirs. There is no honor in a Chinese deal; that is only possible between Chinese.

Nigerians, who don't know they are backing themselves into the welcoming arms of China, have exactly one asset, as we see it: A man named Olusegun Obasanjo, who is quite a bit smarter, tougher and fairer than anyone expected him to be. He has won respect on the world stage, and has taken on the Augean task of cleaning up Nigeria's corrupt democracy. It doesn't even seem like a battle that can actually be started, much less won, but he has started it and is actually making progress.

The profound African tendency towards decentralization and tribalism is working overtime to defeat him, but has failed to do so. President Obasanjo may indeed be something new on the African map: a leader who wants to leave a legacy of progress and achievement behind him, and who leaves lining one's pockets with corrupt cash to others. If so, he comes forward at a critical time in his nation's history, prepared to lead and tough enough to make a vital difference in its history.

Part of that difference will be in beating back the idea that is gaining such resonance in Nigeria these days, that its own oil companies can take over its reserves and exploit them and produce the same or more wealth. That denies the vast investment in experience, technology and administration that huge oil companies bring to bear on every oil prospect they examine. But partnerships that are fair and not forced, as some indigenous companies prefer, will eventually provide that capacity to the Nigerian downstream sector, but they will have to earn, not steal it.

Great companies, just like great people, don't allow themselves to be blackmailed, brow-beaten and falsely accused for very long. They don't like shakedowns, and they don't respect those who have to be bribed to do what is right. The weak, importuning player in such relationships always ends up the loser, as do those who proceed directly from demands to force, bypassing negotiation.

The way of patience, fairness and mutual trust is what works in business in the long run, and is what produces not only strong partnerships but strong friends; often, in the heat of world-shaking crises that threaten to undermine whole nations and continents, whether from natural disaster or war, from economic disaster or disease, it is friends and not money who count the most when help is needed.

We appreciate every day that we see the Federal Government of Nigeria trying to forge honest, productive partnerships by playing fair, being patient, and earning the trust of their partners in business and world politics. Those days point the way to a better future for all Nigerians, and we pray that day will come soon.