WSJ: Libya Oil Chief Urges Stake in BP

Flag of Libya

Flag of Libya

Is Libya interested in buying at least part of BP or some of its shares? The Wall Street Journal has the following story:

DUBAI—Libya should buy a strategic stake in BP PLC to take advantage of its weak share price following the giant oil spill in the Gulf of Mexico, the country’s top oil official told Zawya Dow Jones.

Shokri Ghanem, chairman of Libya’s National Oil Co. said he will recommend buying a stake in BP to the Libyan Investment Authority, or LIA, the North African state’s sovereign wealth fund.

“BP is interesting now with the price lower by half and I still have trust in BP, I will recommend it to the LIA,” Mr. Ghanem said in a telephone interview Monday. “It’s a good opportunity for bargain hunters,” he added.

Mr. Ghanem’s remarks follow local press speculation that oil-rich Middle East investors are considering a strategic investment in BP as it continues to battle the oil spill in the Gulf of Mexico. The spill, now in its 76th day, ranks among the largest in U.S. history and has hurt the region’s fishing and tourism industries.

“We are not selling any assets right now but we do wish to sell $10 billion of noncore upstream assets over the next 12 months; if people want to buy BP shares we always welcome new shareholders,” said John Pack, a London-based spokesperson for BP.

However, Mr. Ghanem’s recommendation does not mean that Libya’s sovereign wealth fund will actually buy any BP shares. From Yahoo! News:

“I think that BP shares are good value for bargain hunters,” Shokri Ghanem, chairman of Libya’s National Oil Corporation, said in a telephone interview.

He declined to comment when asked if he would recommend that the Libyan Investment Authority (LIA), a Libyan sovereign wealth fund, buy BP shares. He added he did not know if the LIA would be buying shares and that he would not be part of any decision it made to do so.

“I am not part of the decision-making process on investments by Libya,” he said.

Advertisements

BP’s Oil Deals in Libya

BP Parody

Image Source: Huffington Post

Recent events around the Macondo well blow-out in the Gulf of Mexico, Libya seems to have some concerns about deepwater drilling, at least when done by BP. From IREN:

TEHRAN (IREN) – Libya wants assurances from BP after its handling of the Gulf of Mexico oil spill but will allow it to start deep-water drilling in the Mediterranean, the country’s top oil official said Monday. “At this point we’re not suspending anything and we’re going to drill pretty soon and some of the work will be in deep water,” Shokri Ghanem, the head of Libya’s National Oil, or NOC, told Zawya Dow Jones in a phone interview. “But they are taking precautions and what happened in the Gulf of Mexico will be a learning process.” BP and its Libyan partner, the Libya Investment, or LIC, in May 2007 signed an exploration and production deal with NOC worth at least $900 million for the onshore Ghadames and offshore Sirt areas.

That deal was hailed by BP in 2007 as “BP’s single biggest exploration commitment” by none other than Tony Hayward:

BP and its Libyan partner, the Libya Investment Corporation (LIC), today signed a major exploration and production agreement with Libya’s National Oil Company (NOC). The initial exploration commitment is set at a minimum of $900million, with significant additional appraisal and development expenditures upon exploration success.

The agreement was signed today in Sirt, Libya, by BP’s group chief executive Tony Hayward and NOC chairman, Shokri Ghanem.

During this exploration and appraisal phase, BP will acquire 5,500km of 2D seismic and 30,000 km2 of 3D seismic and will drill 17 exploration wells.

“We are delighted to be working with the National Oil Company of Libya to develop their natural resources for domestic and international markets. Our agreement is the start of an enduring, long-term and mutually beneficial partnership with Libya,” said Tony Hayward, BP group chief executive.

“With its potentially large resources of gas, favourable geographic location and improving investment climate, Libya has an enormous opportunity to be a source of cleaner energy for the world,” said Hayward.

Obviously, there were certain not so obvious deals going on – or may have been going on – that the public was and is not aware of. The WSJ wrote in September 2009:

LONDON — British oil giant BP PLC lobbied the U.K. in late 2007 over a controversial prisoner transfer agreement with Libya, and oil-rich Qatar lobbied Scotland on the case in June. Revelations of the efforts Friday fed speculation by opposition politicians and victims’ families that the recent release of the convicted Lockerbie bomber is entangled with oil interests.

U.K. Prime Minister Gordon Brown has said the U.K. didn’t pressure Scotland to free Abdel Baset al-Megrahi, the Libyan convicted of the 1988 bombing of a Pan-Am flight that killed 270 people. He has strenuously denied accusations by political opponents that a deal to release Mr. al-Megrahi was made to facilitate the U.K.’s oil interests in Libya.

The Times noted on August 15, 2009:

The release of the Lockerbie bomber from prison would liberate Britain’s largest industrial company from a string of problems hampering its $900 million (£546 million) Libyan gas projects, industry sources claimed last night.

BP, the oil giant, signed a deal with Libya in 2007 to explore for gas in the west of the country and offshore. But since then it has faced a string of bureaucratic obstacles, including delays securing official permits and approvals to import equipment through Libyan customs, the sources said.

They added that BP’s work programme, conducting geological studies on the Sitre basin, an offshore block the size of Belgium, had been hit by delays securing official paperwork for the next scheduled phase of work. “Now that al-Megrahi is released, BP expects to get the go-ahead,” said one source in Libya.

Al Megrahi was released on August 19, 2009. Of course, since nothing in life and in business is connected to each other, this is a complete coincidence. If it were not, it would mean that BP has a hell of a lot of influence on governments. You would need to assume that it can even sway the opinion of courts, that would then be fascism, wouldn’t it.

Africa as the Next Frontier in the Quest for Growth

On Alternet today, we find the following headline:

Billionaires and Mega-Corporations Behind Immense Land Grab in Africa
20+ African countries are selling or leasing land for intensive agriculture on a shocking scale in what may be the greatest change of ownership since the colonial era.

It seems that there is a massive land-grab going on in Africa:

An Observer investigation estimates that up to 125 million acres of land — an area more than double the size of the UK — has been acquired in the last few years or is in the process of being negotiated by governments and wealthy investors working with state subsidies. The data used was collected by Grain, the International Institute for Environment and Development, the International Land Coalition, ActionAid and other non-governmental groups.

This is all part of a larger pattern, it seems. Lately, Dominique Strauss-Kahn, the head of the IMF went to Africa saying in a speech:

All across the continent, we can see signs of life, with rebounds in trade, export earnings, bank credit, and commercial activity. In 2010, the IMF expects growth of around 4½ percent.

[…]

The twin challenges for Africa are to revive strong growth and reinforce resilience to shocks.

So Africa becomes the next – and possibly final frontier – on Earth in the capitalists’ quest for world domination. I again cite from a historical document:

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.

The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.

This is from the Manifesto of the Communist Party in 1848. Marx and Engels were on to something, weren’t they.

It is really worthwhile reading some of these old writings even if you don’t share the worldview propagated therein. There might be lessons in there for you anyway, you know.
Nowadays, we delude ourselves that we have made progress and that we have improved as humans. Read the old documents and you will see that they had figured out the source of the problem hundreds or even thousands of years before our time. It always has to do with greed and with a certain type of personality.