Out of Africa
"The barbarians have long since arrived at the gates of world oil, have achieved control of many commanding heights and should not now be expected to retreat." Derek Brower speaks to author Duncan Clarke
Writer, academic and frontiersman: there's a whiff of the 19th century explorer about Duncan Clarke. He is a man of the world: born and raised in Rhodesia (now Zimbabwe), Clarke describes himself as a nomad. "Invited to leave" South Africa in the late 1970s, he worked as an economist in Australia and Switzerland before arriving in London. The city is a good base for his peripatetic lifestyle, which takes him across the globe to advise oil companies, organise conferences or host dinners for executives.
The travelling comes with the job as head of Global Pacific & Partners, a boutique analytical and strategic planning firm founded by Clarke, which boasts an impressive list of clients, from Russia's Rosneft to Norway's StatoilHydro and dozens of other companies and energy ministries. Like its founder, the firm has carved a niche for itself, introducing investors to areas of the world often ignored by multinationals – especially Africa. Databases keep track of executive movements within the sector and collect "images" of projects and developments in the oil and gas world. Global Pacific also sends out a daily information service covering news from the hinterlands.
Between the travel and his work for the firm – run by just seven people in offices in London, The Hague and Johannesburg – Clarke somehow found time last year to publish two timely books, while a third is due out later this year.
The first, The Battle for Barrels: Peak Oil Myths & World Oil Futures, is a successful demolition of the theories behind the peak-oil movement. The peak is decades off, he argues. And the methodology the movement uses to make its alarmist predictions of the imminent end is faulty, ignoring basic economics.
Understandably, that book has made Clarke anathema among the peak oilers. For readers outside of the energy world, it won't be an easy read – the detail and solid research behind it give the demolition its strength, but will also reduce some of its wider appeal. Clarke isn't keen on "fashionable" causes like peak oil and is intolerant of ideas he finds lacking coherence. Environmentalists concerned with climate change are often the same people who subscribe to peak-oil theories, but he points out that the two are contradictory. If the world were about to run out of oil, concerns about climate change would begin to dissipate.
His second book is a triumph and will be read by many beyond the energy sector. Erudite, convincing and grounded in Clarke's experience of life in the oil-producing countries on the fringes of Western influence, Empires of Oil will command a place on the shelf devoted to other classics of international energy politics.
It takes off where one of them, Daniel Yergin's The Prize, ended: just after the fall of the Iron Curtain. The apparent end of the Soviet Union triggered one of the most famous historiographical blunders, when Francis Fukuyama declared the "end of history" and the arrival of a new era of peace and prosperity. For Europeans, Clarke points out, the wars in Yugoslavia shattered that illusion.
For Africans, it is questionable whether any of them ever held it. Clarke doesn't. The premise of his book is that the US oil "empire" is disintegrating in the face of "barbarians", making the world less predictable and the job of "corporate oil" (Western energy firms) more difficult. "There will ... be no single empire of oil in the 21st century," writes Clarke. "The unwritten history of the future will be formed by the dance of many oil empires as they jockey for position and mutate in form. The barbarians have long since arrived at the gates of world oil, have achieved control of many commanding heights and should not now be expected to retreat."
Many of the books arguments will be controversial to some readers, but Clarke's thesis keeps good company. Machiavelli and Edward Gibbons' Decline of the Roman Empire influence Empires of Oil; so does the work of modern historians such as Niall Ferguson and Robert D Kaplan. The book's range takes in Hugo Chávez's Bolivarian movement, Vladimir Putin's Russia and the spread of Asian influence across the world's energy sectors.
It isn't a comfortable read for Western companies that might hope to see a return to the days when their domination of foreign countries and assets was taken for granted. Resource nationalism, the antagonism of many non-governmental organisations and the threat to their business models by efforts to fight climate change are all among the barbarians (a term borrowed from Gibbons and Roman history), suggests Clarke.
But the decline of the Western oil empire doesn't leave Clarke too worried: it just makes the "game" more interesting. And for clever companies that successfully navigate the rough seas, using appropriate intelligence and making the right local alliances, the future needn't be bleak.
That might sound like a recipe for less transparency. But, says Clarke, that is nothing new. Corporate social responsibility (CSR) efforts by Western firms in places such as Africa have largely been driven by photo-opportunities for company reports, he says. And the investments involved have been minimal. That is as it should be, Clarke believes. "If CSR started to hit profits, then the investments wouldn't be made."
But investment is what poor countries need, he says. Global Pacific recently awarded two civil servants in Uganda, Rueben Kashambuzi and Ernest Rubondo, a prize for "distinguished contribution to African industry". It was their efforts, says the firm, "against many odds and in the face of growing global competition", that helped open prospects in Albertine Graben, Uganda, to exploration. A string of discoveries has followed – bringing investment to one of Africa's poor landlocked states. It is the kind of achievement – involving determined men getting on with the job – that would appeal to the oilman in Clarke as well as the pioneer. "I come from a very deep frontier culture. I'm very much against victimology."
Africa, its problems and its wonders recur throughout Empires of Oil and the continent is the subject of his next book, too. It is never far from the conversation with Clarke either. He may be a nomad, but "Zimbabwe is where the heart is". That his homeland has been left to disintegrate under the mismanagement of Robert Mugabe angers him. But elsewhere in Africa, the changes he describes in Empires of Oil and the high oil price present opportunities.
Some 500 oil and gas companies are operating in the continent. Many, says Clarke, are like the chongololo – the giant African millipede that emerges after a good rain. "The rains are falling on Africa right now," he says. Investment in its energy sector is spreading, even to some of the poorest countries. "But Africans know that the rains don't last for ever."
- The Battle for Barrels: Peak Oil Myths & World Oil Futures, Profile Books, London, 2007
- Empires of Oil: Corporate Oil in Barbarian Worlds, Profile Books, London, 2007
- Crude Continent: The Struggle for Africa's Oil Prize, Profile Books, London, 2008 (forthcoming)