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British Petroleum and Macondo Well

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Starting with the familiar, I turned to the online Casper newspaper and found:

BP in Wyoming
By DUSTIN BLEIZEFFER - Star-Tribune energy reporter | Posted: Friday, June 11, 2010 2:00 am

Spill Won't Hurt Operations Here, Company Says

I realize BP does not have a large presence in the Energy State. However, the Gulf Gusher might deep six BP, some say. Here's a startling paragraph:

The ownership interest in the leaking Macondo well is split among three companies: BP 65 percent, Anadarko Petroleum 25 percent and Mitsui 10 percent. Anadarko also has a large presence in Wyoming's oil and natural gas fields.

Ignoring the 10%, I zeroed in on Anadarko, which has gas wells in Wyoming. I learned it is a basic "independent" out of Oklahoma which has some environmental baggage. For one, it contracted to reconstitute the old Salt Creek field in Midwest and ran into some infractions and fines. It is ever thus in the business where big fishes lure little fishes too weak to stay afloat alone. Anadarko is not an operating partner but a "passive investor" in the Gulf Gusher--known in the trade as the Macondo well. That fiasco is mostly in the hands of BP and Horizon whom they contracted with.


Then I found history of BP even before it was BP. That lineage goes back to John D. Rockefeller and Standard Oil, coupled with the Iranian/Persian connection. The US government broke Standard into units, finalized in 1911. In all its changes of names and activities, it finally settled for being Amoco Corporation in 1985. Three years later British Petroleum acquired it and BP Amoco was formed.
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A man from Australia had come to believe there was a rich lode in modern Iran and pursued the quest without a funding base. He was active in the Middle East as early as 1901. In May 1908 oil was discovered in the southwest of Persia at Masjid-i-Suleiman, the first oil discovery in the Middle East. The following April the Anglo-Persian Oil Company was formed, with the Burmah Oil Company holding most of the shares. Difficulties for the startup company went beyond finances. It needed tankers and other support for marketing, thus risking being gobbled up by major entities. In 1914 Anglo-Persian Oil preserved its independence by a unique agreement with the British government. Under the terms of this agreement, negotiated with Winston Churchill, then first lord of the British Admiralty, a long-term contract was signed with Great Britain for the supply of fuel oil, which the Royal Navy wished to use as a replacement for coal.

Counter to the United Kingdom's traditions, the British government invested 2 million in Anglo-Persian Oil, receiving in return a majority shareholding that it would retain for many years. Between 1912 and 1918 there was a tenfold increase in oil production in Iran. The war also created opportunities to establish an integrated oil business. Within five years Anglo-Persian Oil had more than 30 oil tankers. It also acquired British Petroleum Company, the British marketing subsidiary of the European Petroleum Union. In 1933 Persia signed a 60-year concession with Anglo-Persian Oil. Two years later the name was changed to Anglo-Iranian to meet the change in politics.

After World War II (1951) the Anglo-Iranian Oil company was ousted as the country nationalized the oil industry. In 1954 it was reinstated--the Shah/Mossadegh standoff written about elsewhere--as the British Petroleum Company. A short time later, that company was listed as the second largest chemical company in the United Kingdom. In 1969 it partnered with SOHIO to develop the Prudhoe Bay find in Alaska. After the tanker Amoco Cadiz ran aground off the French coast (1978) Amoco restructured . To make a long story shorter, BP America came about when SOHIO sold. The British government sold its shares to BP also. It took until 1998 to arrive at BP Amoco PLC. It must be emphasized that while the Rockefeller and Churchill (shall we say?) relationship played out there were many other dealings with other major companies.

Having arrived to the21st Century, perhaps it behooves us to return to where I started. The culture of the oil patch is evident in many of the dealings. The fledgling companies were recognition of escaping financial capsizing.

Those successful enough to make headway prance around the majors, hoping to gain contracts without being bought out too early. Whatever Big Oil wants is what keeps the public awake. It must be remembered that anyone who has ever been involved in any aspect of oil exploration or marketing--and also investing--shares a common interest somewhere along the line. I will next try to describe some of the not so obvious ways which keep that culture different from much of what journalistic and political punditry write about.
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As for me, petroleum and I don't mix. As a kid I avoided the smell of gasoline and kerosene. To this day I run for the safety of air conditioning when diesel generators and trucks emit under my window. "Black Gold" is just not romantic. I took a role in our high school play by such a title. As the mother whose daughter was being romanced by a prospector I was outraged that such an evil man would try to take away our farm just because he figured he would find a gusher on it.

However, I knew about money and petroleum. As a schoolgirl a wildcatter came around to core drill. Dad signed a preliminary contract. Core drilling intrigued me--it was a crude method of seismology. The last conversation my father and I had dealt with keeping the contracts uptodate. He was not thrilled with what the land produced at the surface and it might be a hedge for us long after he was gone. Since they knew oil was in Northeastern Wyoming, it had been left untouched only because it was deep. After the oil embargo in the 70s Congress passed a law which sweetened the bottom line for developers. And sure enough. Our town of Gillette was bulging with new residents to accommodate the drillers. However, I returned a few years later to find long faces (1988) because the futures market had reset the price of a barrel. More than anything long gas lines attracted my attention and I read books like "Seven Sisters" which outlined the life and times of major petroleum corporations.

From hometown visits I recognize just how "boom and bust" the business could be. Even 35 years ago, it became obvious that the cycle of wars and the price of oil had a relationship. It was not hard to deduce that militaries and oil exploration had a connection, even after the reconfiguring of empires at the end of World War II.

But close to home! I learned that as the homesteaders sold their original stakes they also could keep their mineral rights. A contract to receive royalties in accordance to the amount of barrels pumped and currently priced was profit from an asset as certain as any stock market certificate. For the holder of a contract, diligence is necessary. Records are carefully kept by each state where a well produces. Still, as can be understood by the machinations of which company owns which part of which well, it is a lawyer's paradise. It is for that reason I try to keep up with those who have royalties coming in. Any news events which surface over changes in ownership may mean something to those who have vested interests.

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Margaret Bassett passed away August 21, 2011. She was a treasured member of the Opednews.com editorial team for four years.

Margaret Bassett--OEN editor--is an 89-year old, currently living in senior housing, with a lifelong interest in political philosophy. Bachelors from State University of Iowa (1944) and Masters from Roosevelt University (1975) help to unravel important requirements for modern communication. Early introduction to computer science (1966) trumps them. It's payback time. She's been "entitled" so long she hopes to find some good coming off the keyboard into the lives of those who come after her.

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click here... by Margaret Bassett on Saturday, Jul 3, 2010 at 2:45:40 PM
The amounts demanded by BP -- $272 million from A... by Margaret Bassett on Sunday, Jul 4, 2010 at 1:37:59 PM
Margaret,You may find it comforting to know that B... by Paul from Potomac on Sunday, Jul 4, 2010 at 1:57:39 PM
Being raised in Alberta, oil was part of life in t... by Margo on Sunday, Jul 4, 2010 at 5:58:31 PM
has a global reach. The Carlyle Group co-founded b... by Bill Hare on Tuesday, Jul 6, 2010 at 5:31:25 PM