WikiLeaks, Oil Edition: Chevron, Eni, Exxon and Shell All Make Cameos
WikiLeaks has so far only released a tiny fraction of the 251,287 leaked U.S. embassy cables it holds, but readers are already getting a glimpse into how the world's largest oil companies do business. Some are insightful, others embarrassing and all of them show just how important and how much money there is in the energy business.
Some of the best so far:
A turning point for Uganda, and it's not good All eyes are on Uganda, whose nascent offshore oil industry has attracted lots of interest and the beginnings of corruption. In a Dec. 17, 2009 cable released Thursday by WikiLeaks, a Tullow Oil exec claims senior Ugandan government officials were "compensated" to support the sale of Heritage Oil's exploration and production rights to Italian oil company Eni.
The Tullow exec laid out in detail how Eni funneled money to Uganda officials through a shell company to secure a deal. The Tullow exec asked for U.S. assistance in keeping the process of oil sales open and transparent. At risk in all of this was a deal between Tullow and Exxon (XOM), which would require the Ugandan government's approval.
Is that a cell phone in your pocket or ... ? In one of the first rounds of U.S. embassy cables leaked we learned just how difficult it is for international oil companies to negotiate the political and culturally sensitive waters in emerging countries like Kazakhstan.
The cable describes an encounter between Chevron (CVX) and KazMunaiGas' first vice president Maskat Idenov over a cell phone number back in 2008 that led to the expulsion of two executives from a meeting.
Nigeria is Shell Shell set up stakes in Nigeria, the No. 8 oil exporter in the world, before it was even Nigeria. So it shouldn't be a surprise that Ann Pickard, then Shell's vice-president for sub-Saharan Africa, was quoted in one U.S. embassy cable essentially bragging that the Nigerian government has forgotten that Shell had seconded people to all the relevant ministries and that Shell consequently had access to everything that was being done in those ministries. The Guardian has all the details on this cable and several other Shell-Nigeria insights.
Eni flexes its muscle in Venezuela
A January 2010 cable describes just how desperate Venezuela is to attract foreign investment. Just 30 minutes before a signing ceremony to seal a heavy crude development deal between Italy's Eni and Venezuela, which was still refusing to agree to Eni's proposed changes in the deal, the fireworks began. Eni CEO Paolo Scaroni told Venezuela's oil minister "to take it or leave it," essentially pressuring the country to accept all of the company's proposed changes or risk losing the deal.
Chevron pulls profits out of Venezuela A Chevron exec confided in one cable that although two Maracaibo joint ventures with Venezuela's state-owned oil company PDVSA owe over $100 million to various service companies, Chevron is withdrawing profits through a deal to take crude oil shipments to its refinery in Alabama.
A meeting with a Baker Hughes exec revealed the company's strategy is to minimize its exposure and not invest in Venezuela.
Crazy Chavez's economic model not so great after all A cable released this week, and reported by The Guardian, describes the piss poor economy in Venezuela, a big reason why president Hugo Chavez agreed to a devaluation that would substantially increase government revenues and offer a short-term solution.
The lesson? Chavez relied heavily on high oil prices to fund his social programs, which promised to blow up in his face -- and it did -- once crude took a nose dive. The price of oil, as the cable noted, will continue to be a determining factor in Chavez's march toward socialism and the potential for social and political volatility.
Photo from Flickr user yoshiffles, CC 2.0
Related: