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07/20/2004:

"Equitorial Guinea 'the Kuwait of Africa?""

60 Minutes Report
NEW YORK (CBS) With gas prices hitting record levels this summer, and violence in the Middle East unabated, America has been scouring the globe searching for new sources of oil.

And one could be Equatorial Guinea, a tiny nation that's been dubbed the Kuwait of Africa because it has so few people and so much oil.

It used to be called the armpit of Africa because it was so desperately poor. But since the discovery of oil 10 years ago, that has started to change.

In fact, as Correspondent Bob Simon reported last fall, African countries like Equatorial Guinea will provide as much as 25 percent of America's oil in the next decade.

And giants like Exxon-Mobile are pumping out more of it all the time.

The oil workers come in droves, and there are so many that there's now a weekly flight direct from Texas to Equatorial Guinea called the Houston Express.

The country has the third largest reserves in Africa, so the men know what they're here for, even if they're not quite sure where they are.

The men are bussed straight to a compound, and then out to sea – the oil is offshore. Simon visited an offshore platform in the Gulf of Guinea. There is lots of oil a couple of miles under those waters.

The big discoveries began in the '60s in Nigeria, Angola and Cameroon, but remarkably no one could find much of anything in the waters off Equatorial Guinea. The Spanish tried and failed, so did the French, and the giant American companies simply weren't interested.

Then, in 1992, a tiny American firm scraped together some money, bought a concession to explore, and hit the jackpot.

“You know, when they tell you, you don't have anything, you make a deal,” says Pierre Atepa, an adviser to the Guinean president. “And they say, ‘OK, let's hit a deal. If we find, we take almost everything.' You know, you may as well have a little bit of everything than everything of nothing.”

Equatorial Guinea got to keep a mere 12 percent of the oil revenues in the first year of its contract -- not much of a deal considering that other African countries were keeping as much as 60 percent. full report