Share on Google Plus Share on Twitter 1 Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend (1 Shares)  
Printer Friendly Page Save As Favorite View Favorites (# of views)   2 comments

OpEdNews Op Eds

British Petroleum's crude tactics

By       Message Rakesh Krishnan Simha     Permalink
      (Page 1 of 1 pages)
Related Topic(s): ; ; ; ; ; ; ; , Add Tags Add to My Group(s)

Must Read 1   Well Said 1  
View Ratings | Rate It

opednews.com Headlined to H2 3/1/11

Author 20636
Become a Fan
  (5 fans)
- Advertisement -


BRITISH PETROLEUM IS BACK by Aviary

The award for the Ironical Statement of the Year should go to Mukesh Ambani, the world's fourth richest man. On February 24, 2011, announcing a high-octane oil and gas exploration deal--potentially worth $20 billion--with British Petroleum, the chairman of Indian conglomerate Reliance Industries said he was delighted to partner with "one of the finest deep water exploration companies in the world."

Let's hear that again: "One of the finest deep water exploration companies." Ambani must either have a very short memory or a selective one? Isn't this the same company whose horribly amateurish drilling in United States coastal waters last year caused the worst marine oil spill in history. Eleven oil rig workers were killed in the deep sea disaster, following which the British company engaged in a massive cover-up, and only fessed up after American lawmakers publicly grilled its CEO.

However, Ambani's enthusiasm is understandable. Straight off he gets $7.2 billion in cash, which will drive his insatiable appetite for acquiring high-tech oil and gas assets around the world, especially in the United States.

Ambani, who is a voracious reader of management books, should read up the history of his new British driller. Wikileaks has revealed the extremely shady nature of British Petroleum's operations. According to leaked US cables, the president of Azerbaijan has accused the company of stealing billions of dollars of oil from his country and using "mild blackmail" to secure the rights to develop vast gas reserves in the Caspian Sea region.

The leaked US embassy cables reveal a massive row between Azerbaijan and British Petroleum over sharing oil profits. In 1994, the oil company signed a production sharing agreement that allowed it to initially take home a larger share of the revenues to pay off development costs. Once these costs were recouped, a larger proportion of the revenues were to go to the government of the Central Asian republic.



BP's DEEPWATER HORIZON by PUBLIC DOMAIN CLIP ART

However, the oilco had other ideas. In April 2007, the British oilmen told the Azerbaijanis that higher transportation costs and production delays were forcing it to delay the agreed increase in government profits. The Azerbaijanis became so frustrated they threatened to have British Petroleum's Azerbaijan boss, Bill Schrader, put on trial for "stealing $10 billion worth of Azerbaijani oil".

- Advertisement -

Azerbaijan's is a classic case of a large transnational oil corporation browbeating a developing country and exploiting its natural resources. In Confessions of an Economic Hitman, John Perkins, a covert NSA agent on the payroll of an international consulting firm, illustrates how Shell and other oilcos were ripping off, for instance, Ecuador: "For every $100 of crude taken out of the Ecuadorian rainforests, the oil companies receive $75. Of the remaining $25, three quarters (18.75 percent) must go to paying off the foreign debt (that is, the oil companies' investment). Less than $3 goes to the people who need it the most."

If foreign oilcos were taking away almost 94 percent of Ecuador's oil revenues, it's unlikely the Azerbaijanis got a better deal.

Exploiting developing country resources seems to be British Petroleum's speciality. Its crowning glory came in the 1950's in Iran where it was literally stealing Iranian oil and exploiting the local people. When the democratically elected Prime Minister, Mohammed Mossadegh, nationalized the oil industry, an outraged England sought the help of the United States, which got rid of the popular leader in a stunning coup engineered by CIA agent Kermit Roosevelt (Theodore's grandson).

So what exactly is British Petroleum doing in Indian waters? It marks a new stage in the company's attempts to recover from the huge public relations disaster that was the American oil spill. Discredited in the Western world, the oil major is seeking redemption elsewhere. That, along with a belief that the epicentre of the natural gas industry--both production and consumption--is shifting to the emerging markets, has driven the company to conclude mega deals in the BRIC nations--Brazil, Russia, India and China.

However, unable to wash off the taint, the company has found the going tough in these countries. The Russians have insisted on a complex $16 billion share swap deal with Rosneft, perhaps as insurance against a future disaster on Russian territory. 

- Advertisement -

The Chinese, who have more leverage than most other nations--as well as capital punishment for serious crimes of negligence--have asked for technology transfer before the British can ship out a drop of oil.

In India, the experience has been mixed. Much before the Reliance deal, the country's state-run oil prospector ONGC had proposed a strategic alliance with British Petroleum, but the oil ministry rejected it, despite London pushing for the deal.

On the other hand, the Reliance deal seems just perfect. As well as getting a 30 percent share of Ambani's proven oilfields, the British can always rely upon the uber-powerful plutocrat to steer them out of Indian waters in case of trouble--oil spills included.

 

- Advertisement -

Must Read 1   Well Said 1  
View Ratings | Rate It

Rakesh Krishnan Simha is a New Zealand-based writer.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon


Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

BRICS: Shaking the world order

Exodus: Is the Christian church losing critical mass?

Mother Teresa: Giving Charity an Uncharitable Name

The Bilderberg Group: Sealing the world's fate behind closed doors

How India's Cold Start is Turning the Heat on Pakistan

Welcome to Colonialism 2.0