Angolan leader on US oil mission

Angola's oil may reduce US dependence on the Middle East

Angolan President Jose Eduardo dos Santos is heading for the US to discuss oil and elections.

The southern African nation has some of the biggest reserves of oil in the continent.

Its government is keen to sell to a US which wants to diversify away from a reliance on the Middle East for energy.

But observers say Mr dos Santos may want US blessing to extend his 25-year rule - and say oil revenues are being diverted into private hands.

Long-awaited elections are meant to be held in 2005, and the US ambassador to Angola, Christopher Dell, told a newspaper earlier in May that he expects them to go ahead.

Mr dos Santos, though, may hold out renewed promises of greater transparency for Sonangol, the state oil company, in exchange for a deferral.

Missing money?

Money from oil fuelled 27 years of civil war, which concluded in 2002.

Among those accusing senior Angolans of cashing in on oil is the International Monetary Fund, which in 2003 sent a team to look into accusations that some $900m disappeared in 2001 alone.

Pressure group Human Rights Watch has said $4bn went missing between 1997 and 2002, although the Angolan government denied this was the case and said the report was an attempt to tarnish its image.

Further IMF lending was conditional on a review of oil revenues.

Reports

That review - an "Oil Diagnostic" by accountancy giant KPMG - is meant to be published.

President Dos Santos has been in power for 25 years
So far only an "executive summary" has been officially published, which the government says exonerates it.

But pressure group Global Witness, which has seen the report, calls the summary "poorly edited and sanitised".

"What the report shows is a picture of bedlam," said Global Witness's Gavin Hayman.

About a quarter of revenues are unaccounted for or lost, yet are recorded after the fact as spent, Global Witness says.

Foreign currency receipts, it says, are channelled through offshore accounts and companies to service oil-guaranteed loans, with accounts kept in a number of currencies without reconciling varying exchange rates.

Internal controls are "weak" with key foreign accounts failing to appear on Sonangol's books.

If the Angolan government's promises of transparency are to be taken serious, Mr Hayman said, it needed to introduce a robust double-disclosure system.

"Oil companies need to publish what they pay, and the government should publish what it receives," he said.

- BBC News