fbpx

Tyrants in the Gas Tank

Turns out that lefty activists dislike the new breed of state-owned energy firms just as much as the ancien regime of international oil companies. Joshua Kurlantzick, who has written some good stuff in the past, has a new one in Mother Jones entitled “Put a Tyrant in Your Tank,” including some really scary graphic arts. A few highlights after the jump. tyrantinthetank.jpg

From Mother Jones:

This tough demeanor was glaringly absent, however, when van der Veer met with Russian president Vladimir Putin in the winter of 2006. Shell had toiled for a decade to develop Sakhalin-2, a vast $22 billion oil and gas project on Russia’s remote eastern coast, when Putin seized the reins and handed them off to Gazprom, the state energy concern. To retain a financial stake in the project, Shell reportedly had to pay the Kremlin a special dividend worth hundreds of millions of dollars annually. Yet in announcing the deal, the hard-assed CEO came off more like a cheerleader. “Thank you very much for your support,” van der Veer gushed, addressing Putin as the two men stood together in an ornate Kremlin stateroom. “I think for us, the great news is there’s now stability, so we can all work together.”Groveling may not come naturally to guys like van der Veer, but they’d best get used to it. Soaring oil prices have emboldened Russia and other petrostates to stand up to Western execs and build up their own state-run petroleum operations. While some oil multinationals continue to haul in record profits, they’re rapidly losing global clout, and with their holdings on the decline, executives have little choice but to grin and bear it. We’re “seeing a further shifting in the oil industry in which national oil companies are the power brokers,” says Andrew Neff, senior energy analyst at economic forecaster Global Insight. (…)Can’t muster sympathy for the captains of industry? Well, consider this. In the past, activists pushing for improvements from oppressive oil regimes such as Burma’s got leverage by launching PR campaigns to embarrass their Western oil partners. But those days are over. Given their waning power, the multinationals are more likely than ever to overlook the abuses. To get their hands on the petroleum of Libya, a nation with an abysmal human rights record, oil companies have offered dictator Moammar Qaddafi nearly all the proceeds from any partnership deals. Six months after the Kremlin took back Sakhalin-2, Putin met with a collection of leading CEOs at a forum in his hometown of St. Petersburg where they competed to suck up to him. “The president is very open and straightforward,” Christophe de Margerie, head of French oil giant Total, fawned to the press afterward. “We’d like to invest more.” And even as the Kremlin turned the screws on BP to muscle it out of a key project in Russia, chief executive Tony Hayward turned on the charm, declaring that BP was “pleased to be a minority shareholder in Rosneft,” another state-controlled oil firm. (…)The national concerns, by contrast, behave with near impunity. A lengthy study by Matthew Chen, a researcher at Rice University’s Baker Institute, found that some of these firms provide virtually no information about their corporate citizenship. Two of China’s top three oil companies, in fact, have been implicated in serious ecological mishaps, including a massive spill of carcinogenic benzene in 2005 that poisoned water supplies in northeast China and across the border in Russia. In its 2007 ranking of the world’s largest firms by their commitment to business and social responsibility, Fortune rated China National Petroleum Corporation 80th out of 100 companies. Gazprom ranked worse at 86th. Clustered at the top of the list, meanwhile, were several multinational oil companies, including Shell, Total, Marathon, and in the No. 1 slot, BP. It may be greenwashing, but at least these firms care about their image.