High oil prices form weak base for state power

Bob Tippee
Editor

Most Americans base their distaste for foreign oil on presumed instability in the Middle East. They should note recent events in Moscow and Minsk.

Venezuelan President Hugo Chavez visited Russia and Belarus to sign energy deals and, as usual, chatter about US "aggression" and "imperialism."

This is the despot who has embraced truculent Iranian President Mahmoud Ahmadinejad and supported terrorists in Colombia.

In Moscow he signed separate deals with TNK-BP, Lukoil, and Gazprom for exploration and development in Venezuela's Orinoco heavy oil region, where his government has expropriated interests of western oil companies in existing projects while raising taxes.

He also sought a second agreement to buy Russian military equipment and proposed, according to Fox News, an alliance with Moscow through which "we can guarantee Venezuela's sovereignty, which is now threatened by the United States."

As though to hedge his bets, the Venezuelan leader stopped in Minsk to schmooze with Belarusian President Alexander Lukashenka, who called him a "brother."

Lukashenka also regularly denounces the US and, like Chavez, holds office by virtue of elections widely regarded as rigged.

Belarus, though, has squabbled with Russia over oil and other matters. So when Chavez agreed in Minsk to expand an energy cooperation agreement that the governments entered last year, he might have been playing his chums against one another.

After Chavez left Moscow, meanwhile, fractures widened between the 50-50 partners in TNK-BP: BP and Alfa Access Renova. BP responded to pressure from AAR by withdrawing its seconded employees. Then Robert Dudley, the British head of the joint venture, left Russia citing harassment from the four Russian billionaires that make up AAR.

The partners had been calling for Dudley's resignation since a board meeting in Cyprus earlier this month. After the meeting, the government did its part for the home team by refusing to renew Dudley's 1-year visa.

So goes business in Russia and Venezuela, where citizens seem to like the immoderate exertion of state power. The power of the moment, of course, owes much to oil prices that have defied the laws of economic gravity—until recently.

What was that about "instability?"

(Online July 25, 2008; author's e-mail: bobt@ogjonline.com)

Related Articles

ExxonMobil replaces 103% of 2013 production

02/21/2014 ExxonMobil Corp. replaced 103% of its oil and natural gas production last year with additions to reserves, mostly of crude oil and other liquids.

Hydraulic fracturing stuck in New York policy vacuum

02/01/2014 Persistent institutional indecisiveness by elected officials in New York State has placed the state in the position of not having a statewide polic...

Contact hails Kakwa Montney tight gas-liquids well results

10/16/2013 Contact Exploration Inc., Calgary, said completion of its fourth operated horizontal Middle Montney formation tight gas-liquids well extends the sc...

Watching Government: BC Premier's energy stance

10/14/2013 British Columbia will not budge on its requirements proposed heavy oil export projects must meet, Premier Christy Clark said on Oct. 4. But that do...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected