Petrostates: What BP spill?
When Big Oil breaks ranks, and one partner in a world-class deal accuses the other of gross negligence, you know that fear has overcome the industry. But fear of what? One presumes it's the permanent loss of future -- or even currently permitted -- drilling rights in the Gulf of Mexico because of the disastrous oil spill, in addition to offshore deals around the world. After all, as I've written here before, the primacy of Big Oil rests on its claim to technological superiority.
In a similar vein, we have a piece in the London Observer by Richard Wachman and Jon Stibbs, who write that, around the world, "the oil majors stand accused of a blatant disregard for local communities and the environments in which they operate." The Associated Press's Jane Wardell takes a look at re-evaluations of drilling practices being undertaken by petrostates in the wake of the spill. Where might such states focus their attention? One clue comes in a long piece in The New York Times today on blowout preventers, the ostensibly fail-safe technology meant to prevent a catastrophic spill, but which actually work just 45 percent of the time, according to a comprehensive review of their real-world use.
So not just BP, but oil multinationals generally, and the handful of Big Oil companies in particular, are under threat of losing their seed corn, right?
Wrong, it seems.
Going down the list of the world's petrocountries, I can't find a single one that is adopting anything approaching a tough new stance against offshore oil drilling by foreign oil companies. On the contrary, some, like Australia, seem to regard the spill as an opportunity to attract more interest in their fields. Perhaps this will change as the BP spill continues to drag on. But for most oil-rich nations, some noise about evaluating spill responses notwithstanding, it's business as usual -- which means the typical headlong rush to development.
There is a company-specific backlash, of course -- BP is under the microscope, for example, in Brazil. And BP CEO Tony Hayward has been dispatched to Russia in the coming days to reassure President Dmitry Medvedev that the company isn't going to collapse. But these are exceptions. After the jump, a rundown of how petrocountries -- those on which the world relies for its oil -- are responding to the spill:
Australia - Resources Minister Martin Ferguson not only rules out the suspension of offshore exploration, but opens up bidding on 31 drilling areas in waters twice the depth of the BP's leaking Macondo well.
Brazil - Not only is Brazil proceeding with an aggressive offshore drilling strategy, but it has increased the scope of its five-year investment plan.
Canada - This country has been the target of much grief over the mining of oil sands in the province of Alberta, which require much energy and water to produce. But next to deepwater drilling, oil sands look pretty good -- or at least that is what Canada is arguing.
China - State-controlled China National Offshore Oil Corp., better known by its acronym CNOOC (pronounced Shnoss), was run out of town when it tried to buy Unocal in 2005. But it's in the driver's seat in China, where it owns exclusive rights to develop the country's offshore fields. CNOOC says it's taking more precautions because of the BP spill, but otherwise is stepping up offshore drilling.
Ghana - Drilling costs have risen by an estimated 7 percent because of new safety regulations, but offshore drilling goes on.
Kazakhstan - The northeast Caspian is among the most fragile ecological zones of global oil drilling. Officials want more vigilance, such as at the Kashagan field, but are making no calls for a curtailment or halt to drilling.
Libya - As with other countries that host BP operations, Libya is asking questions of the company, but imposing no actual new constraints. Libyan energy officials have asked BP for safety assurances, but are allowing the company to proceed with offshore drilling.
Nigeria - More regulations are in the works for the Niger Delta, but there is no threat of a work stoppage.
Norway - State officials are openly clashing over a response to the Gulf spill, but the latest word from the Norwegian Petroleum Directorate is that there will be no curb on offshore drilling.
Russia - Moscow's stance was signaled by Prime Minister Vladimir Putin last week, when he signed a $1 billion deal allowing Chevron and Russia's Rosneft to drill for oil in the Black Sea.