MALABO, Equatorial Guinea - The sun hammered down on the crowd of 10,000 people crammed into the soccer stadium for the launch of the president's re-election campaign. It was noon, and the steamy tropical air had come to a boil. Dressed in T-shirts and caps decorated with their leader's face, the spectators looked weary, sweat pouring from their brows, waiting for the president of their tiny African nation to speak.

He sat before them in the shade, a waiter by his side refreshing his glass of ice water. A tall, thin man with elbows that jutted out like wings, President Teodoro Obiang Nguema, who came to power by military coup 23 years ago, looked small beside the wall of beefy Moroccan bodyguards standing behind him.

At last, he took a sip of water, rose and spoke of his country's stunning transformation.

How just a few years ago, Equatorial Guinea - a scattering of malaria-infested islands in the Gulf of Guinea and a sliver of jungle on Africa's mainland - was a hopelessly poor, largely ignored backwater, a former Spanish colony of 500,000 people known for little more than its endangered monkeys and modest cacao production.

How today his country has one of the fastest-growing economies in the world, with new hotels, restaurants and office blocks under construction in the once sleepy capital. How new investors are arriving each week hoping to strike it rich in a country referred to by those in the know as simply "E-G."

How oil has changed their lives forever.

"Like the Scriptures say when the Pharaoh of Egypt had a dream of lean cows and fat cows," the president told them. "We have passed the time of lean cows that represent hunger and we are now in the time of fat cows which is prosperity."

Billions of dollars' worth of petroleum reserves have been discovered just off Equatorial Guinea's shores in the Gulf of Guinea. In less than a decade, the country's oil production has jumped to 220,000 barrels a day from a paltry 5,000 - with the potential to grow to 724,000 by 2020.

The discoveries have pushed this once-overlooked country to the forefront of the oil rush under way in West Africa, a region that supplies the United States with almost as much oil as Saudi Arabia. In Chad, a $3.7 billion pipeline will soon carry 250,000 barrels of oil per day from a remote basin across Cameroon to oil tankers anchored in the Gulf of Guinea. In the nearby islands of Sao Tome and Principe, more than 4 billion barrels of oil are ready to be tapped. In Nigeria, Africa's petroleum giant, oil companies have the potential to increase production from current levels of 2.1 million barrels per day to as high as 5 million by the end of the decade.

And never has African oil been more important to the United States. With turmoil in the Middle East and a possible war with Iraq threatening to disrupt oil supplies, U.S. policy-makers are looking more and more to Africa as an alternative source to meet America's need for imported oil. The United States depends on Africa for 15 percent of its oil imports. But by 2015, Africa is expected to supply one-fourth of U.S. import demands, according to the U.S. National Intelligence Council.

Whether this oil rush will benefit the people living here is unclear. Historically, natural resources in Africa have been squandered through corruption and civil wars. One need only look at Nigeria, where the country by most measures is worse off today than it was 25 years ago despite the government having collected more than $300 billion in oil revenue.

Nowhere along Africa's coast are both the perils and possibilities of this oil boom illustrated more clearly than in Equatorial Guinea. Oil has the potential to eradicate widespread poverty in a country where some residents survive by hunting monkeys and rats for food and consider running water and electricity luxuries.

But even with the economy's phenomenal 65 percent growth last year, there is little hope that that this new prosperity will trickle down to the people.

President Obiang's regime has been characterized by widespread corruption, gross financial mismanagement and the jailing, torture and beating of political opponents. The CIA World Factbook describes Equatorial Guinea's leadership as "ruthless."

The U.S. State Department's most recent human rights report on Equatorial Guinea gives the country failing marks and concludes: "There is little evidence that the country's oil wealth is being devoted to the public good."

Given the country's leadership, residents don't expect that to change.

"Before oil, I took this salary," says Jose Luis Lohoso, an employee in the Ministry of Agriculture and father of eight, raising his hand an inch or two off the table to indicate the small number of bills he receives on payday. "After oil, I take the same salary. Nothing has changed. The oil money is there. But it is not circulated."

Obiang is seeking another seven-year term in a presidential election to be held Dec. 15. Past elections have been widely condemned by international observers as flawed. Few residents expect these elections to be any different.

Apparently Obiang did not, either. He was in high spirits at the official start of his campaign. He declared a state holiday, shutting down banks and businesses and setting schoolchildren free to play in Malabo's palm-fringed streets. His supporters rushed from hovel to hovel in the poorest neighborhoods, giving residents in tattered clothes free presidential party T-shirts and baseball caps. He spoke like a preacher of a downtrodden country rising to heights no one ever imagined. His speech over, Obiang and his wife descended into the sweaty crowd, offering smiles, handshakes and - to help sway undecided voters - envelopes stuffed with cash.

Colonial history

On a map, Equatorial Guinea looks like a collection of jigsaw puzzle pieces, an odd assortment of more than a half-dozen islands of varying sizes plus a tiny block sandwiched between Cameroon and Gabon on the mainland. Combined, they make up an area slightly smaller than Maryland.

Malabo, the capital, is located on Bioko, a boot-shaped island about 25 miles off the coast of Cameroon that was first settled 3,000 years ago by Bantu tribes who paddled dugout canoes across the ocean using palm leaf oars.

Europeans arrived in the 15th century. Bioko and nearby islands in the Gulf of Guinea were first claimed by Portugal, which later traded its possessions to Spain for parts of Latin America. Colonists started lucrative cocoa plantations on the islands, making the islands one of Spain's most valuable colonies.

In 1968, Spain granted Equatorial Guinea independence, ending 190 years of colonial rule. What followed was one of the grimmest chapters in African post-colonial history.

The country's first elected president, Francisco Macias Nguema, created a single-party state and declared himself "President for Life," wielding his power to terrorize enemies both real and imagined. Government functions ceased altogether, leading to the ruin of roads, hospitals, schools, electricity and water supplies. Thousands of people - including politicians, priests and intellectuals - were tortured and executed in jails or sent to forced labor camps. More than one-third of the country's population died or was forced into exile during his rule.

In 1979, Macias' nephew, Teodoro Obiang Nguema, a brigadier general and former director of Malabo's Black Beach prison, overthrew and executed his uncle.

Under Obiang, life improved somewhat, but corruption, an intolerance of political opposition and beating and torture continued. Obiang's regime mismanaged its finances to the point that a number of aid programs sponsored by the World Bank and International Monetary Fund were suspended.

In 1996, Equatorial Guinea held another presidential election, and Obiang won 99.2 percent of the vote. According to the U.S. State Department, the elections were "marred by extensive fraud and intimidation."

Power in Equatorial Guinea is concentrated in the hands of President Obiang and his close relatives, all members of the small Mongomo subclan of the country's majority Fang tribe. The President's Democratic Party of Equatorial Guinea controls the legislature and judiciary, effectively making the country a dictatorship.

Until recently, it was hard to imagine anyone taking much notice. Not much happened here and no one expected that to change. When the U.S. State Department was looking to make budget cuts, it shut down its embassy in Malabo in 1995.

Later that year, however, ExxonMobil and Ocean Energy struck oil in water northwest of Bioko Island. Other major oil companies, including Triton and Chevron, followed with discoveries of their own. The oil rush had begun.

"This country has huge potential," says Imran Khan, deputy general manager for Vanco Equatorial Guinea Ltd., a division of Texas-based Vanco Energy Co.

Sitting on a black leather coach at Vanco's headquarters in Malabo, Khan was bullish about the future of his company in this country. He predicts the oil boom will rival those in Kuwait and Dubai.

Vanco has more than 50 prospective oil wells in a 1.1 million-acre offshore area known as Block K in the Gulf of Guinea, where the company estimates there are 1.26 billion barrels of oil. Drilling starts next year.

Altogether, Vanco believes, it is sitting on as much as 8 billion barrels of oil in offshore prospects in Equatorial Guinea, Namibia, Morocco, Madagascar and the Ivory Coast. Africa is the last frontier with significant undiscovered reserves, and while the Middle East may have more oil, Khan said, "Americans are not really welcome there."

In Africa, the governments have been open to them and the petroleum reserves are located well offshore, out of sight of any unrest that may occur on land.

"If there is a civil war, your rigs are far from shore. They will be safe," Khan said.

And yes, while there may be human rights complaints in Equatorial Guinea, Khan said he was optimistic about Obiang's government making changes.

"Things are getting better here," he said.

The Sept. 11 terrorist attacks and terrorist bombing of an oil tanker in Yemen this year have persuaded the Bush administration to seek sources of oil outside the Middle East. This fall, Bush met in New York with Obiang and leaders of 10 other African nations, most of them rich in oil. Bush is planning his first visit to the continent next month, with possible stops in West Africa. State Department officials have meanwhile announced plans to re-open its embassy in Equatorial Guinea.

"Do I think West African and Gulf of Guinea oil is strategic? Yes, absolutely it's strategic," said U.S. Assistant Secretary of State for African Affairs Walter H. Kansteiner, speaking at the West Africa Oil and Gas Forum in Houston last month. "Strategic means somewhere between 15 percent and 20 percent of our oil imports are going to be coming from Africa in the next three or four years. That is an extremely important source for us."

Little sign of wealth

It is difficult to tell that this is a nation flush with oil wealth. The capital, Malabo, located in the shadow of the extinct volcano Pico Malabo, is a weather-beaten colonial city in desperate need of a fresh coat of paint. Other than a beautifully restored Spanish cathedral set on a tidy plaza overlooking the sea, the downtown is a collection of mildew-stained buildings with rusting metal roofs. Several half-sunken ships litter the harbor.

Water and electricity service is sporadic at best in the city center. In the poorer neighborhoods, residents can go weeks without power. About the only evidence that the country is a major energy producer is the orange glow that illuminates the night, the natural gas burn-off at the country's new methanol plant.

Statistically, life has gotten better here. The per-capita income has jumped to more than $2,000 a year from about $1,000 in 1998. Government oil revenue is estimated to be at least $200 million per year.

Nobody seems to know where the money is going. Residents are unable to point to any improvements other than a two-lane highway to the airport. This is the road on which Obiang lives in an enormous concrete-and-glass house surrounded by high walls. His first wife lives in another walled mansion across the street. Just down the road is the headquarters for ExxonMobil. Closer to town, dozens of spacious air-conditioned homes have been built in a neighborhood called Little Spain, where many of the oil employees live.

The only people who appear to be getting rich from this oil boom, residents complain, are Obiang, his family and Cabinet. The president's brother owns La Bahia, the city's only luxury hotel. The minister of national security runs El Paraiso, a restaurant and bar just down the road from ExxonMobil. The minister of information is building a hotel just outside Malabo, and the prime minister just opened a seaside fish restaurant with checkered tablecloths. One of the president's sons, who is the minister of forests, fishing and the environment, runs a record company in Los Angeles.

Most of Bioko Island's 50,000 residents remain poor, living in shabby wooden houses, overcrowded apartment blocks or corrugated metal shacks.

"There is no housing, no electricity, no water in the capital. How is that improved living?" asked Manuel Nse Nsogo Angue, president of the independent newspapers El Tiempo and La Opinion.

Still, many residents are reluctant to complain or demand change. "There is not a culture of democracy. There is a culture of dictatorship. Everybody is afraid to put forward their opinion," he said.

About the only independent voice in the country belongs to the party putting up an opposition candidate in the presidential election, the Convergence for Social Democracy, or CPDS.

The CPDS office is on the second floor of a crumbling colonial building, above a discount store. The party leadership is made up of lawyers, teachers and professionals, who sat around a large conference room table on a recent afternoon planning their strategy for the race.

The party leader is Placido Miko, a lawyer and one of the country's best-known politicians. He is serving a 14-year prison sentence after being tried and convicted this year on charges of undermining the state. His trial was widely condemned as unfair by human rights groups.

The party's candidate for president is Celestino B. Bacale, a 45-year-old former government official who now runs a pharmacy.

A broad-shouldered man with specks of gray in his hair and a quick grin, Bacale grew up in the village of Niefang on the country's mainland. He helped found CPDS in 1990 after losing his job in the Ministry of Mines and Energy when he spoke out against corruption.

His campaign for president was launched at a busy intersection in Campo Yaounde, a sprawling Malabo slum of crooked shacks interrupted by dirty roads where he hoped to tap into the growing anger among the country's poor. "The people of Equatorial Guinea have been treated like subjects, not citizens with rights and responsibilities," he said.

The government, he said, "has converted the public treasury into a private bank account. This is money that should be used to build schools and hospi tals and other things the society needs. Change is urgent."

The prospects for an opposition victory are dim. The majority of the country's parties are throwing their support to Obiang, who critics say has used his oil wealth to force other candidates out of the race.

Despite government claims that its human rights record has improved, torture and beatings continue in its prisons, said Fabian Nsue Nguema, a member of the opposition Popular Union Party.

When the government reneged on promised salary increases for its employees, Nsue criticized the president on an Internet site. He was arrested and charged with insulting the president. In April he was sentenced to one year in prison, where he shared a cell with 40 other inmates who were beaten and tortured.

"I was treated like an animal. My arms and legs were chained together," he said, displaying a scar on his arm. He was released from prison in October after he and dozens of other prisoners were granted amnesty by the president as part of the country's independence day celebrations.

Asked about reports of torture, Antonio Nandongo, spokesman for the Ministry of Information, did not dispute them.

"We have maybe three or four lines of violations. Other countries have pages of violations," he offered as a defense.

Nandongo's office is on the first floor of the ministry's building, a moldering stucco structure on the edge of the city. On his desk is a manual typewriter. His window overlooks a small garden and, beyond, a sea of shacks. On a recent morning, he sat behind his desk in the dark. The power, once again, was not working.

Nandongo, however, claimed Equatorial Guinea was spending all its money on schools, hospitals and new roads. He could not explain why residents were unable to point to any improvements.

Nor did he make any apologies for the president and his wife handing out cash to voters.

"It is a normal custom. This is the way we campaign," he said. "We are Africans. We have our own culture, and democracy is not African culture."

Long road to change

There is just one road out of Malabo. It passes through the city dump before bearing south along the coast, deep into dense jungle, toward the small port city of Luba. Government leaders say their country one day will be "the Kuwait of Africa." But along this road, such a drastic transformation appears centuries away.

Men walked along the edge of the road carrying machetes. Women bathed and washed clothes in streams flowing from the island's volcanic peaks. A young boy stood by the side of road holding up a dead rat by the tail. It was for sale. Farther along, families hawked batches of oversized snails, freshly hunted squirrels and dead monkeys, hung from a sale rack by their ankles. Soldiers guarded checkpoints along the road, demanding bribes from motorists.

Stories of the oil rigs and the riches they produce have reached the most distant villages of the island, drawing people away from their homes in search of jobs in Malabo. This migration has hit the country's cacao plantations the hardest.

"Before, we were the No. 1 company to work for. Now we are the last company people want to work for," said Luis Acevedo, manager of Casa Mallo, Equatorial Guinea's largest cacao producer. "The amount of profit we can make in a year, the oil companies can make in just one day."

Each year, Acevedo sees more workers leave. Men and women, young and old, gather their belongings, walk away from the cacao orchards and take the road to Malabo to start a new life. They know that if oil wealth is unlikely to come to them, they must go and find it.

Some may find the jobs they are looking for. Others wait for riches in Malabo's crowded slums overlooking the Gulf of Guinea. On clear nights, in the distance over the water, the oil rigs' lights are within view.