Monday, 12 March 2007

Dig Deep for Oil Relief

Despite announcing Big Profits[1] the poor and disadvantaged big gas & oil companies are hurting. This is an Esso S, everyone dig hard into your pockets and Shell out for Oil Relief. We need your government’s Total commitment. (All puns intended)

According to an article in today's Financial Times " The new Seven Sisters: oil and gas giants dwarf western rivals [2]": “The International Energy Agency, the developed world’s sectoral watchdog, calculates that 90 per cent of new supplies will come from developing countries in the next 40 years." This is a cause for concern.

Except for our nice friends the Saudi’s, who give corruption, repression and absolutism, new meaning[3]. We like to do business with these kinda guys and pull out all the stops to make it so, as Blair recently showed by pulling the plug on the Serious Fraud Office’s investigation into the BAE, Saudi arms deal.[4]

The article states that whilst Saudi Aramco "the world’s largest and most sophisticated national oil company and thus number one on the FT list" will have dominance over the market, something which the "International oil companies and the leaders of the main consuming nations have come to accept....the recent shift in the international influence of smaller national oil companies has been harder to swallow."

Your heart must be breaking at this point but please read on. By denying big, rich oil companies’ access/control to the vast oil resources of developing countries it is impoverishing them – the big oil companies that is. You see record “profits drive discovery and productivity” so when “politicians send the taxman or regulator after profits (in order to improve the living conditions of their own people by socially beneficial funds), they do more than take money away from workers, shareholders and customers. They also endanger America's economy and security.” [5] Pilfering funds is different, as is the fact these profits go onwards and upwards to a select few (so called trickle up economics).

“These countries don’t know how to run their own resources and should let us do it for them instead” said one industry source before adding “The West knows Best” or “Better Tex than Mex”.

Seasoned Media hacks will note the language used when nations are taking control of their own resources/destiny - “wrestled”, “seize control”, “funnelled” and “using its national oil company as a bottomless piggybank”. That’s because these unruly countries should be letting our foreign “expert” corporations in to pilfer and plunder the profits.

The FT articles continues that “Governments’ unwillingness to allow their national oil companies to reinvest their recent windfall profits back into the industry lies at the root of many of the worries about future supplies. Instead, those governments use the money for social ventures or it is wasted."

Indeed that ill-disciplined meddler, President Hugo Chávez, of Venezuela, “spends two-thirds of PDVSA’s budget on his populist social programmes, with almost $7bn being funnelled in that direction by 2005, compared with the $77m spent in 1997 by the previous government, the Rice Univeristy (sic) report found.”[6]

Spending money on the people, as Chavez does[7], is of course very bad, it is "wasted" - unlike leaking oil in the Arctic[8] or giving it to shareholders so they can continue to piss on the little man from the window of a 4x4 Porsche’ they bought with their dividend. What a bad example this Chavez is – he was elected to spend the money on the people and he’s doing just that! At least our leaders know about elections and governing - by the corporation and for the corporation.

Underlying the concerns about the nationalisation of gas & oil supplies – apart from the obvious of setting a bad example (“domino theory”) – are that “international oil companies are finding no new fields to escape to.”[9]

The lack of reinvestment into finding and maintaining oilfields and pipelines by these naughty newcomers is causing the likes of Christophe de Margerie, chief executive of Total, to hope that they “might be forced to consider, ‘well, whatever we said, those people are worth working with because we need them to develop our reserves.’”[10]

When asked specifically about the “forced to consider” remark and if this meant “shock and awe” tactics an unnamed source said, “our buddies in the White House are going to threaten, cajole and bomb so we can help them rebuild their oil – just like we did in Iraq! Our reputation precedes us – or was that B-52s?”

I implore you to write to your MP and make them take action today.


[1] “Energy giants Chevron, Exxon Mobil, Conoco Phillips, BP and Shell have beaten third-quarter forecasts with combined profits of $33bn this week.” Chevron pumps more oil and profit, BBC News Online 27 October 2006

[2] The new Seven Sisters: oil and gas giants dwarf western rivals, Carola Hoyos, Financial Times March 11 2007

[3] According to Human Rights Watch the Saudi “government does not allow political parties, and places strict limits on freedom of expression. Arbitrary detention, mistreatment and torture of detainees, restrictions on freedom of movement, and lack of official accountability remain serious concerns.” The Foreign Office's Human Rights Report 2006 states there is “cause for serious concern about human rights in Saudi Arabia.”

[4] Criticism of ditched Saudi probe, BBC News Online, 15 December 2006.

[5] Yes, profits matter, Investor's Business Daily, 7th March 2007

[6] as [2]

[7] Such as “launching of government anti-poverty initiatives, the construction of thousands of free medical clinics for the poor, the institution of educational campaigns that have reportedly made more than one million adult Venezuelans literate and the enactment of food and housing subsidies. There have been marked improvements in the infant mortality rate between 1998 and 2006. The government earmarked 44.6% of the 2007 budget for social investment, with 1999-2007 averaging 12.8% of GDP.”

[8] BP shuts leaking Alaskan wells, Mark Tran, 19th July 2006 Guardian Unlimited

[9] as [2]

[10] ibid.