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| Sunday, 18 December 2005 |
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Features |  |
| News Business Features Editorial
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Who carries fire to oil in Indian Peninsula? Solemn Thoughts by Wendell Solomons "When we explore and get our oil I will strongly recommend joint ventures with companies possessing the best available technology in the world...." That comment got press attention in Sri Lanka in a story captioned 'Black gold aplenty' and written by Walter Jayawardhana of Los Angeles (the story has also been placed at several WWW sites). He was interviewing Dharmasiri Weerasinghe who describes himself as a leading engineer in the oil exploration industry. Standing in line in Sri Lanka for a government scholarship for physical science training in Moscow, Weerasinghe meandered to Kiev in the USSR. He explains for more than that during jobs spanning more than three decades, he served some of the biggest Western multinationals in business. He observes: "Some wells in South India are not producing as much as they could since the Indian technology used is not very advanced. Only big companies have such advanced technology. We must get into business by starting joint ventures with big experienced and accountable companies so that the best available means could be used." I must enter an aside here that a November 9th Dow-Jones NewsWire found members of two US Senate committees ready to accuse oil companies for escalating petrol prices by not installing enough new refining capacity in the USA. Weerasinghe continues, "The well I am developing in Egypt is done with British Petroleum. In the joint venture, Egypt would get 51% and BP 49%. The upfront cost for oil prospecting is so high that it is the best method we must follow. Sri Lanka should avoid mushroom companies." Weerasinghe says he has worked for Bechtel Corp, Halliburton, Kellogg construction, Partec Lavalin of Canada, and Foster Wheeler Corp. Accountable vs mushroom companies Taking Weerasinghe's call for 'accountable companies' versus 'mushroom companies,' we do encounter complaints about his cited Halliburton: "Perhaps no company is better connected than Halliburton - the oil services and construction firm that Dick Cheney headed from 1995 to 2000 before running for (Bush Administration) Vice President.' "Halliburton's government contracting business surged under Cheney in the 1990s, and it surged again in the wake of the September 11, 2001, attacks. In early March, the Army Corps of Engineers secretly awarded Kellogg, Brown & Root (KBR, a Halliburton subsidiary) a no-bid contract to fight oil well fires and make emergency repairs. Persistent probing by congressman Henry Waxman brought to light that the company was also given a far more lucrative, and somewhat open-ended, role in running Iraq's oil facilities and in distribution of petroleum products." Regarding Bechtel Corp whose flag Weerasinghe also waved in his job record, more outcries may be heard: "...Alumni such as Caspar Weinberger and George Shultz have held Cabinet posts under Republican presidents. Donald Rumsfeld negotiated for Bechtel with Saddam Hussein in the 1980's, trying to get Saddam to sign an oil pipeline contract (the Aqaba pipeline project from Iraq to Jordan). Rumsfeld flew to Baghdad, twice, as Reagan's special envoy. According to newly-available documents, a lot of his business was nothing more than advancing Bechtel's business. The promotion of the same Donald Rumsfeld to US Defence Secretary expresses oil magnates' grasping pursuit of administrative power. The appointment of Condoleeza Rice as Secretary of State reflects open, despairing insider-trading (she was a long term Rockefeller associate and an oil tanker was named after her.) John D. Rockefeller's old words are 'Competition is a sin." Besides the squat in key administrative positions visible today, a researcher comments on a previously entrenched strategy: "One method of reducing competition is through forming a cartel. A cartel groups companies together by contracts or agreements designed to promote inter-company co-operation and thereby reduce competition between them.....Most of them involve the exchange of patent rights, the dividing of regional markets, the setting of prices, and agreements not to enter into product competition within specific categories.' "The establishment of the petrochemical cartel was achieved in 1929 with the marriage of IG Farben of Germany to ICI and Shell Oil of Great Britain, and to Standard Oil and DuPont of America....Besides the aforementioned companies, it had cartel agreements with 2,000 companies around the world including Ford Motor Co., Alcoa, General Motors, Texaco, Proctor and Gamble, and virtually every enterprise that involved chemicals." "Hermann Schmitz, president of Bayer AG and IG Farben during World War 2...held a substantial amount of stock in Standard Oil of New Jersey. G. Edward Griffin's investigation....found that the cartel agreement signed between Standard Oil and Farben on November 9 1929 involved the exchange of some of Farben's patent rights....for $30,000,000 of Standard's stock. The Rockefeller group concealed its Farben holdings in false fronts and dummy accounts and when Farben's vast holdings were finally sold in 1962, the Rockefellers were the dominant force in carrying out the transaction...." India and petroleum in Sri Lanka Lanka IOC Private Limited (LIOC), IndianOil's Wholly owned subsidiary in Sri Lanka, was incorporated to carry out retail and bulk marketing of petroleum products, building and operating storage facilities at the Trincomalee Tank farm. The storage provides supply stability but LIOC also enhances the standard of service in the retail sector. LIOC took over 100 Ceylon Petroleum Corporation-owned petrol and diesel outlets in February 2003. LIOC has also taken over 35 dealer-owned franchise retail outlets and is in the process of taking over another 115 such franchisee outlets shortly. The outlets are being developed to international standards. In development, LIOC is making phased investments to the tune of US $ 100 million. Says Chairman, IndianOil, Mr. M. S. Ramachandran, "Our entry into Sri Lanka is in line with IndianOil's Corporate Vision of becoming a transnational energy major. While we want to expand our market base and convert the (profit in) petroleum products into more wealth for our stakeholders, IndianOil is also committed to being a good strategic partner to Sri Lanka..." Frontline magazine (which comes from the publishers of 'The Hindu'), pointed out in 2003: "... Initial surveys carried out by the Indian Navy's hydrographers have given cause for cautious optimism about the possibility of finding hydrocarbon deposits.' "Sri Lanka is happy with India's support for the current efforts to bring stability and peace to the island. 'India naturally likes to see peace in its own area of influence,' said a senior Sri Lankan diplomat. Indian officials, while emphasising their support for the peace process, are however not too happy with the involvement of many foreign powers." (June 7 - 20th, 2003 issue; report from New Delhi). India proposes Asian Oil and gas grid Asia has emerged as a major oil consumption centre. Its present consumption is around 40% of total world consumption. Against the increase in global oil consumption of around 3.3% in 2004, Asian consumption increased by over 5%. Asia is projected to continue to be the dominant oil-consuming centre in the next 20 to 25 years. With Asia being the largest producer and also the fastest growing consumer of oil and gas, India's Petroleum Minister on Nov. 25th, 2005, proposed in New Delhi detailed scientific study for forming an oil and gas grid for the continent. Stating that Asia was no longer marginal to the global oil and gas economy, Minister Aiyar in his inaugural address at the meeting of the ministerial round table of North and Central Asian producers said: "The era when our production was controlled by others is now behind us, the era when the bulk of consumers lived in other continents is also over. Already, two-thirds of the oil extracted from the bowels of West Asia, (North Asia) and South-East Asia finds its way to the markets of Turkey, India, China, Korea, Japan and other consumption centres in Asia." The round table, the second being hosted by India in 2005, brought together North and Central Asian oil producing countries including Russia, Turkey, Uzbekistan, Kazakhstan and Azerbaijan in dialogue with the main Asian consumer nations China, Japan, Korea and India. Unlike India, Sri Lanka's victims of the 2004 tsunami still await rehabilitation. Among the many causes cited are misused of relief supplies. In a Lanka Monthly Digest interview, Lankan business leader Mahendra Amarasuriya had said the following: "There has been a general deterioration in all standards in the country, including the standards of ethics and professionalism amongst all sectors, including the business sector. This is the result of the steady deterioration over the last 20 to 30 years..." Amarasuriya's time-frame brackets the period of World Bank - imposed 'Open Economy' reforms in Sri Lanka. In an interview in the UK's Observer, short-term World Bank Chief Economist Joseph Stiglitz had said that the first step in such 'reforms' is the promotion of state-level corruption during the 'privatisation' requirement, a process that Stiglitz says would more be accurately called 'briberisation.' Yet, in Sri Lanka's case a keg of gunpowder to blast open the land was offloaded immediately. The World Bank backed a loan-supported project for development of Sri Lanka's major river - the Mahaweli. The existent Mahaweli project of a UN technical design group was drawn up for execution during 25 years so as to minimise river diversion impact on the environment. Yet, with the World Bank's nod the 25 years were contracted to nine years. On the capital intensive reservoir project accelerated what Stiglitz called 'briberisation.' Fly-by-night contractors who made windfalls on the foreign loans, would require to put off a change of government to an Opposition that could bring out Treasury records. Therefore a country Referendum was organised in 1982 to postpone elections. When Western observers bemoaned unfairness, the fate of the 1983 elections was sealed by burning Tamil homes on July 25th, 1983. After the burnings, government broadcasts announced a belated Emergency. The act of proto-fascism led into civil war. Sri Lanka's outgoing President Chandrika Kumaratunga was front-paged by the Daily News of June 11, 2004. She observed - "There has been a transformation of people's attitudes, their concepts, behaviour and the way of looking at the world in the last few decades. I feel these attitudes were incompatible with (the needs) of Sri Lankan society." Such a context expresses Sri Lanka's social vulnerability. It therefore comes as a boon to hear a Minister remember in India of more than one billion population that - "The era when our production was controlled by others is now behind us." |
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