Christophe de Margerie, the new CEO of Total – the world’s sixth largest oil company – is set to take the reigns of the company in 2007, despite being under investigation for overseeing oil-related bribery schemes in places such as Iraq, Iran, and Russia. Christophe de Margerie, allegedly no stranger to bribery From a Holman W. Jenkins column in today’s Wall Street Journal:
Mr. de Margerie, for what it’s worth, has a walrus mustache and a reputation as a genial, even fun-loving, oilman. He didn’t graduate from any French école; though a scion of the Taittinger champagne family, he made his mark in the trenches, leading the company’s dealings in the Middle East. His legal problems today arise as a direct consequence of Total’s strategy for differentiating itself from other oil companies in how it deals with oil-producing states. Total prides itself on being a non-“Anglo-Saxon” partner in developing resources increasingly under the control of authoritarian or populist leaders around the world. Mr. de Margerie has gleefully acknowledged that Total overruled its own lawyers in negotiating with Saddam. He tweaks rival BP over its slogan “beyond petroleum,” saying Total is “beyond old petroleum practices,” i.e., willing to partner on less-advantageous terms with government-run oil companies and step away from its core competencies to help out with education, electrification, whatever host countries want. You can’t argue with financial success. Under Messrs. Desmarest and de Margerie, Total has grown from also-ran to global player. This year, it will likely report more than $12 billion in profit. On the other hand, its strategy of being an understanding friend to radical regimes didn’t stop Venezuela’s Hugh Chávez from confiscating its Jusepin oil field or unilaterally rewriting the terms of its Sincor heavy crude project. It hasn’t stopped Russia from targeting its Khariaga project with the same sort of “environmental” complaints that saw Shell driven out of the country last week. If the reported suspicions of investigating magistrate Philippe Courroye are correct, Total’s strategy may also have involved a certain amount of bribery of local officials and perhaps kickbacks to French politicians, for which the company may yet face painful accounting. Indeed, Total may have been guilty of a serious miscalculation in supposing that being French somehow gave it extra leeway in negotiating the increasingly stringent norms of global corporate behavior.