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Wednesday, November 4, 1998 Published at 17:24 GMT

World: Africa

Oil fuels Angola's civil war

Angolan offshore reserves are some of the largest in the world

Anna Richardson reports from northern Angola

A few kilometres off the coast of northern Angola lie some of the continent's greatest untapped oil riches.

The country is now producing $10m of oil a day, and new discoveries are being made at such a rate that production is expected to triple within the next 10 years.

Angola would then be Africa's biggest oil producer, ahead of Nigeria.

[ image: The oil revenues are paying for the civil war]
The oil revenues are paying for the civil war
But instead of going to pay for reconstruction efforts after 23 years of civil war, the oil revenues are being used by the MPLA government to fuel its side of the conflict with the rebel Unita movement.

Despite two UN-sponsored attempts to broker peace, fighting is breaking out again in many provinces.

The problem is that the MPLA government has already spent the next 15 years' worth of oil revenues on the civil war; foreign currency reserves have nearly run dry.

Meanwhile, the country has crumbled. Basic services suffer

[ image: Meanwhile, the standard of living for 80% of Angolans is desperately low]
Meanwhile, the standard of living for 80% of Angolans is desperately low
"The country's revenues are meant for resolving the country's problems," said Fernando Dos Santos, Angola's Internal Security Chief.

"It would be ideal to spend them in the social sector. But what use are social projects when Unita are blowing up power lines and bridges. First we have to resolve the military situation. First we have to end the war"

Not all Angola's oil money has been consumed by the war. In fact the war has made a better quality of life possible for the ruling elite in the capital, Luanda, where corruption thrives.

But 80% of Angola's people live in poverty and the obscene contrasts between the rich and poor anger many of the country's small middle class.

Throughout Angola even basic services like sanitation, health and education have collapsed.

[ image: The oil companies are starting to foot the bill for social schemes]
The oil companies are starting to foot the bill for social schemes
In one village just a few kilometres away from the nearest oil fields, the children stopped turning up to school because buildings are falling down.

But an oil company stepped in and rebuilt the premises as part of a scheme in which producers provide community services in return for exploration contracts.

If all the revenues were used in this way, the country could be turned around.

Every foreign oil company is fighting for a slice of the action, offering hundreds of millions of dollars, sometimes just for the right to explore virgin areas of sea bed.

"It's one of the most exciting areas in the world right now," said Mark Puckett, Director of Chevron Angola.

But with the country's four-year-old peace process in jeopardy, the hope that the profits could be used for reconstruction is evaporating.

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