|
Upstream
Greenpeace attacked European nations for continuing to give subsidies to the oil industry for research and development. The environmentalists want the money sunk into the search for renewable forms of power. This followed OPEC sticking the boot into Western governments for introducing the kind of green taxes Greenpeace might applaud. But the exporting group's argument is that oil consuming countries are not really interested in protecting the environment. OPEC secretary general Alhaji Rilwanu Lukman believes green taxes "help no-one but the governments which impose them, and neither are they helping the environment or the stability of the oil industry". The OPEC boss is sure that such taxes are a smokescreen for protectionism and an attempt to diversify sources of supply on security grounds. The second argument is undoubtedly correct and who can blame nations for that? Many Western countries have not recovered from the shock of the early 1970s when, as they saw it, they were held to ransom by OPEC. Inevitably they are concerned to have as wide a supply source for fuel as possible. Surely OPEC members like Iran, Iraq, Kuwait and Saudi Arabia are as security conscious as anyone. Would they be willing to put their energy needs in, say, the hands of politically unstable or antagonistic neighbours? As for protectionism, OPEC is in a difficult position to preach. The organisation is ultimately a cartel whose major purpose, at least in the past, was to control market prices. There is no question of pure open trade dominating the local economies of many members. Most control their own national state-owned oil companies. Are these completely free agents unshackled by political needs or demands? Of course not. Lukman has also been exercised about the fact that many Western oil companies and their investors are not allowed to do business with certain OPEC member states presumably he is referring to Iran, Iraq and Libya. "There is a strong degree of rhetoric and propaganda clouding the reality of the situation," he argues, and to some extent we would agree. The proper place for any trade sanctions to be decided would be the United Nations. The US has jumped the gun. It can put a halt to its own companies working in Iran but has overstepped the mark by passing legislation to punish foreign oil companies that make investments of more than $40 million in the country. The European Union has rightly told oil companies to ignore the unilateral US trade sanctions even though it has its own political difficulties with Iran. Relations between Tehran and Brussels have turned sour since a German court last month implicated top Iranian leaders in the assassination of three dissident Kurds in a Berlin restaurant five years ago. EU ambassadors have been withdrawn but until a more robust policy is developed it is appropriate that European oil companies remain active in the area. The French in particular have always taken a flexible approach to servicing their political and economic needs. It is no surprise, therefore, that Total is odds on favourite to win a $3.5 billion contract to develop the South Pars field in Iran. Lukman is a bright and good-hearted man who knows his job is to bang the drum for his members. But surely this time the beat is wrong.
|