Gulf Oil Spill: The Genesis of BP’s Special Relationship and Complacency (Part 2)

Louis Egbe Mbua

BP, being one of the largest companies in the world, looked invincible. In her Britannic House head Office in St James’ London, it is not quite clear what is their exact position on the momentous Gulf gush disaster, as BP is run in a typically bureaucratic style: like a government department. BP paid £6 billion of corporate tax last financial year to the UK Treasury; meaning a turnover of at least £50 billion. This, alone, counts for at least twice the Cameroon government GDP. Furthermore, £1 in every seven dividend paid in the UK is given out by BP. To further emphasize her influence on British daily life, most of the biggest pension funds in the UK are tied to BP. It is also a fact that the company is about 40 percent owned by American shareholders.

So whatever side we look at the effects of this oil disaster, the possible fall or breaking up of the oil giant is bound to create financial chaos. In this background, why then is President Obama taking a hard-line stance on the company? Obama has stressed several times over that he was going to hold BP accountable; and that they “must” pay huge compensations of up to £20 billion for the cleanup and lost businesses and lives on the gulf coasts; most fishing businesses, hotels, holiday resorts and tourist attraction; entertainment, shipping, state and local conservation organisations as well as other industries and manufacturing businesses that are affected. More importantly, the 11 people who perished during the explosion have to be compensated.

While we have to agree that accidents do happen, it would seem that giant oil companies appear to put profit before people, environment and have completely lost focus on the inherent risks involved in deep sea oil drilling. It is rumoured that BP reaps a mind-blowing £61 million profit per day. Consequently, it is almost certainly unforgivable for BP not to put enough safety in place to prevent such a simple capping of a blowout which would have been automatic in case of an explosion of an upper rig. Furthermore, it is again unacceptable that such a company with enormous resources in man power, cutting-edge technology and access to finance could not have been an industry leader in the manufacture of oil rig platforms. And why did they hire the vessel from Transocean if they could actually buy it straight up from Hyundai? A hired vehicle means that BP was trying to by-pass technical and safety responsibilities in case of a liability. This, clearly, was to save money for yet more profit. Now, if BP had owned the rig, it is clear that they would have attempted to apply the highest standards of health and safety in line with the American Petroleum Institute (API) and the International Standardization Organization (ISO) -- inspecting the rig and the well head themselves rather than depend on the second or third party company Transocean.

It can also be said that what happened in the Gulf of Mexico in the Deep Horizon disaster is what has been happening in less influential countries. Last year, 2009, Royal Dutch Shell paid a paltry £10 million compensation to the 500,000 strong Ogoni family ethnic group in the Rivers State of Nigeria. They never offered an apology to the oil-politics and environmental destruction of the people concerned as BP has done to the Ameicans. This meagre sum is but a speck in the oil giants’ finances. For years, oil companies of the African Gulf of Guinea have devastated local farmlands, polluted rivers in Nigeria with the complicity of irresponsible African governments who work with multinational oil companies to ruthlessly exploit the land with criminal neglect of the indigenes whose ancient livelihoods, habitats and environment have been totally devastated. While oil companies grow richer and fatter, the indigenes grow poorer and thinner following the destruction of biodiversity that may provide for their diet.

So far, these oil and mining companies have paid little or nothing to the African governments’ treasury or its long suffering inhabitants who have paid dearly for this mass and relentlessly exploitation and environmental damage. But there is overwhelming evidence that multi-nationals have incessantly and shamelessly provided kickbacks and bribes to deceitful and monstrous African officials and Presidents. A typical example of this kind of buccaneer attitude has been the treatment of the Bakassi indigenes in the disputed peninsular in the Cameroon coast. The West including Britain, France, Germany, USA complete with two not so prominent African leaders of Cameroon and Nigeria, with Kofi Anan, another African, conspired in a scandalous and fraudulent agreement in GreenTree, New York, America, to deport the indigenes from their ancestral land of Bakassi to Calabar, Nigeria so that these companies may collect huge deposits of oil from the shores of the Bakassi Peninsular.

If in a hypothetical situation, there were an oil spill of the Gulf of Mexico magnitude in this peninsular, all one would expect is a clearly deafening silence – judging from past incidents in Africa. The entire peninsular and her rich fish stock would be destroyed with devastating consequences for the local population but with rich pickings for the oil companies. This is a recipe for future conflicts. Unfortunately for BP, this Gulf Oil Spill happened in the backyard of a superpower; so they have no alternative but to pay up front this time round. They might have escaped financial ruin as Shell has been doing for decades in Africa if this occurred in Timbuktu and not in Florida and Louisiana – with oil spill threatening to arrive at New York’s Manhattan.
It is unclear where Obama’s policy on environmental damage as regards the developing world stands. However, his tough and uncompromising stance against the now uncapped Gulf of Mexico oil spill appears to replicate his campaign message in advancing a new Green energy economy in the United States. However, the politics of oil is not new as it began right from the beginning of the creation of BP.

The British Petroleum (now rebranded Beyond Petroleum) had its origin, ironically, in Iran and evolved into the Anglo-Iranian Oil Company (AIOC) with sole rights to explore and drill in the oil rich country. A nationalist government led by the democratically elected Iranian Prime Minister Dr. Mohammad Mossadeq, seemed to have nationalised the company so that his country could convincingly benefit from this newly found resource of black gold. However, the company, with the help of the CIA masterminded a coup d’état that overthrew Mossadeq in 1952-1953 to install the Shah of Iran. The Shah, as compensation, restored AIOC as the predominant oil company of that country until the Shah was overthrown by the theocratic revolution of Ayatollah Khomeini who during the Ian-Iraq war renegotiated favourable terms with the now renamed AIOC (BP).

Thus, BP’s complacency in terms of safety in the United States must reflect this political background and evolution of the company. America aided, supported and profited from BPs Oil Coup in Iran in the 1950s. As a result, Americans, today, were offered 40 percent of the shares in the now oil giant. All these years, BP has had a roller coaster ride in the world oil stage possibly believing that they would always have the support of America, the superpower special friend. Well, until the complacency began affecting the United States herself. Firstly, there was the explosion at a BP-owned US oil refinery with the loss of American lives. And then now the explosion and dreadful oil leak in the Gulf. Is this the end of the Oil giant? This may be premature.

The company had seen off other crisis. In 1979, BP was kicked out of Nigeria by the then military regime of General Obasanjo -- who ironically signed the treacherous Greentree agreement in 2008 as the second time civilian President of Nigeria --for allegedly diverting Nigerian oil to the then overwhelmingly hated Apartheid South Africa. Nigerian Oil exports to the then racist regime had been banned by the Nigerian Military Junta. It seems BP have never had a foothold in Nigeria since then but they have gone from strength to strength; discovering more fields in other countries and remote areas although they were outmanoeuvred by the Russian government of Putin in a questionable deal with Russian oil companies.

Their place, in Nigeria, after the 1979 unceremonious discharge, was taken over by Royal Dutch shell that is also in trouble with rebels protesting their years of environmental damage and exploitation of the indigenes in the River state. It remains to be seen whether the new President of Nigeria, Jonathan Goodluck, who himself is an indigene of the Delta, would put the company under pressure to pay up in cleaning the damaged environment and compensate local businesses and fishermen or allow them to do as they please as has been the case for decades.

The last few weeks have seen the BP’s share value fall by almost 50 percent and voices in the UK predicted the end of the giant while others accuse PM David Cameron of not standing up enough against the Obama White House “anti-British” rhetoric. While the political argument rages, it was interesting to read through on the biography of Tony Hayward, the BP Chief Executive, who is now being hounded by the American public for his technical mishaps and utterances. Interestingly, Hayward is a doctorate in geology; and it seems the British and American media cannot differentiate between a geologist and a marine or hydraulic engineer. They seem to believe that Hayward is the right man for the job. This is misplaced thinking. While Hayward might have been instrumental in the expansion of BP by spearheading the corporation’s successful exploration, this crisis can only be handled by a professionally trained engineer in the person of the Technical Director. So, although the buck stops at Hayward, the Technical Director has much more questions to answer.