The King of Oil: The Secret Lives of Marc Rich

table as they closed the fantastic deal—just the way Rich liked it. “We wanted oil from Burundi; Burundi wanted money. We both profited enormously,” Monsieur Ndolo confided. He switched from French to English. “The Africans know how to do business successfully.”
Angolan Absurdities
     
    Angola, an oil-rich nation in southwestern Africa, was the setting for one of the cold war’s greatest paradoxes. In 1975, shortly after the nation gained independence from Portugal, Angola descended into a brutal civil war that would last for twenty-seven years. The country was the backdrop for a proxy war between the capitalist West and the Communist East. The Marxist government under the MPLA (the Popular Movement for the Liberation of Angola), which had seized the reins of control after independence, was financed by the Soviet Union and Cuba. Their opponents, the rebel movement UNITA (National Union for the Total Independence of Angola), were supported both financially and ideologically by the United States and South Africa.
    The American company Gulf Oil (now Chevron) had been producing oil since 1968 in the South Atlantic off the coast of the small Angolan exclave of Cabinda. After the Marxists seized power, most foreign oilcompanies left the country, together with their experts, and their production facilities were nationalized. However, Gulf Oil remained, accepted the MPLA government, and continued to cooperate with the Marxists. The American company was thus responsible for a considerable part of the MPLA’s public revenue, and this made Gulf Oil’s production facilities in Cabinda a prime target for the UNITA rebels. UNITA wanted to wipe out the government’s prime source of revenue and thus carried out regular attacks in the exclave.
    So it came to be that Cuban troops sent to Angola by Fidel Castro to support the MPLA were stationed in Cabinda. Cuban Communist forces were now responsible for protecting the production facilities of capitalist Gulf Oil, based in Pittsburgh, Pennsylvania, from UNITA attacks that were financed by the United States.
    In 1976, the Marxist government founded the state-owned oil company Sonangol, the Sociedade Nacional de Combustíveis de Angola. Sonangol had total and exclusive rights for the production and marketing of Angolan oil, but the company was lacking in trained personnel. Other than those experts working for Gulf Oil, most had already left the country. If the Angolan government were to market the oil on its own, it would need an independent and experienced intermediary. It found just the right one in Zug, Switzerland. “We became the exclusive agent for Angola for quite some time,” Rich explains over a coffee in his office in Zug. The fact that Sonangol was actually a joint venture between Angola and Marc Rich has remained a secret to this day. It was once more a win-win situation. “The Angolans wanted to gain experience in the international oil market,” Rich says. He wanted nothing more than to earn money—Rich’s favorite activity.
You give a value and you receive a value.
    The joint venture led to a rather strange state of affairs. The American oil company Exxon (now ExxonMobil) noted Gulf Oil’s successes in Angola and sought to get a foot in the door of the African oil trade. Exxon managers arranged a meeting with Sonangol representatives. They knew nothing of Marc Rich + Co.’s share in the Angolan state-ownedcompany. The representatives sat waiting in a conference room expecting to meet a black Marxist functionary. One can only imagine how they felt when Pinky Green walked into the room and greeted them with a friendly “How ya doin.” 9
    Rich also organized something for the Marxist country that it never could have obtained on its own and without which it could never have gotten into the oil trade: access to international banks. Rich’s company excelled at solving financial problems, which provided it with a competitive advantage. One of the best Africa experts in the commodities trade told me, “When you go to Africa, your success in the business is not only dependent on the price you’re paying, but also on the financial solution you can find for your customer. If you find a financial solution, you can beat all of the competition. You will be the king.”
    Marc Rich + Co.’s involvement in Sonangol lasted until 1983. By then the Angolans had learned enough to found their own trading company, which was able to take over the task that Marc Rich +