A former government adviser has warned it is “only a matter of time” before BP or Shell faces a bid from a Russian state-owned group such as Gazprom which could threaten western oil supplies.
Professor Peter Odell, an energy economist, says ExxonMobil is also vulnerable to a Chinese takeover as the large UK and American stock-listed oil groups lose their influence in global markets.
» Source: Guardian Unlimited
“A Chinese bid for Exxon and or Chevron and or a Russian bid for Shell and or BP, backed by funds provided by the wealthy member countries of Opec seem likely to be only a matter of time.
“With the ‘majors’ gone there will be concern in the main OECD countries for the future security of supplies,” he said in an unpublished speech to Opec ministers in Vienna last month.
Professor Odell, who was an adviser to Tony Benn, the UK energy minister in the late 1970s and has since worked for a host of different foreign governments, said he was not being alarmist or deliberately controversial. “Latest figures show the western oil majors are losing their leadership of the global oil system and now have only 9% or 10% of the world’s reserves. They appear unable to win new production rights except as minority partners in state-run systems,” Mr Odell says.
The Russian gas group Gazprom is keen to expand its sphere of influence outside its home country and told the Guardian earlier this year it would like to buy a British energy company.
The treatment by Russian officials of Shell at Sakhalin-2 and BP on the Siberian Kovykta field has also been interpreted as the Kremlin manoeuvring in the energy sector for political ends.
Alexander Ryazanov, chief executive of Gazprom’s oil arm Gazprom Neft, said that the unit’s healthy cashflow and help from its parent would make it easy to find up to $25bn(£13.3bn) to take a 50% stake in the joint venture, TNK-BP.
The Chinese - and the Indians - meanwhile have been using state-owned companies to expand abroad to secure supplies for their energy-hungry industries.
Professor Odell foresees a return to state-owned companies in the west too, along the lines of Norway’s Statoil and Austria’s OMV which have also been expanding fast.
He predicts a “new British National Oil Corporation, a revived Petro-Canada and a deprivatised Total in France and Belgium”. The publicly quoted companies such as Shell and BP have not helped their own plight in the eyes of those countries with expanding needs for oil, says Professor Odell, a Briton who currently works at Erasmus University in Rotterdam.
He believes western oil companies have endangered their own survival by skimping on investment and using their cash for share buybacks and “extortionate” executive remuneration packages.
Professor Odell is considered to be quite conservative but he is a sceptic about the world running out of oil fast. “The ultimate physical sufficiency of global oil and gas resources is not in doubt so that one can ignore the present-day Jeremiahs,” he told Opec ministers.
He believes the need for better order in global markets will eventually lead to the creation of a United Nations International Energy Organisation which will include input from Opec and others.