[lbo-talk] Cole: Iranian public very friendly towards US

Marvin Gandall marvgandall at videotron.ca
Wed Jan 31 06:06:51 PST 2007


Yoshie:


> That said, even Saudi nationalization presents a much less than ideal
> investment climate from capital's POV. The PNAC crowd probably wanted
> to change that, though the Iraq War has derailed their project on that
> front.
========================== I don't think there's much evidence of a campaign by the big oil companies and their governments to dissolve the state-owned oil and gas companies in the Middle East or elsewhere. If these were handed to them on a platter and they were assured the investment climate would remain stable, I don't think they'd object, but on balance they seem satisfied with the present arrangement because it keeps oil prices high and record profits flowing, and without state owned oil companies it would be difficult if not impossible to maintain a producers cartel like OPEC. Foreign control of oil fields in the developing world inevitably becomes the focus of social unrest, with Bolivia and Venezuela only the most recent examples of how the spectre of expropriation and higher royalties is an ever present threat to fixed long-term private investment in this sector.

My sense is that the preferred mode for the oil majors is therefore not privatization, but minority stakes, leasing arrangements, and exploration- and production-sharing agreements where they can extract the most favourable terms from the host governments without exposing themselves to the attendant risks of ownership. That's why Bremer, for example, was overruled when he proposed to privatize the Iraq National Oil Company early in the occupation, and why the new draft Iraqi oil law leaves control of the oil resources to regional and federal state bodies but guarantees private investors enough of a stake on generous terms (there is a notable emphasis on extortionate PSA's) to attract foreign investment at such time as stability returns.

Within this framework, the multinationals obviously prefer oil ministries and state-run oil corporations which are accomodating rather than demanding, and they rely on their governments and armed forces to use whatever muscle is necessary to force recalcitrant regimes back into line. I don't think it's the case, as suggested above and elsewhere, that Capital was at one with the neocons in launching the invasion of Iraq to restore private ownership of the Saudi and other Mideast oil fields. In fact, I recall reading an article - I think it was by Greg Palast - posted on this list or perhaps on PEN-L a little while back pointing to a split between the neocon ideologues and the more experienced and sober oil capitalists on precisely this issue, where one oil executive dismissed the PNAC types as "brain-dead" for pushing privatization.



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