Guest Post by Rickey E. Martin
It’s the early 2000’s and in the background there is a clash between America and Iraq. Saddam Hussein wants to trade the country’s oil in Euro’s instead of the US dollar. Strangely enough, Qaddafi did something similar, but he wanted to go from the dollar and start dealing in gold. Why gold? Because most of the gold in the US isn’t actually owned by the Americans, only the dollar is what the American government says it has, so it would be a worthless bargaining tool for commodities such as oil.
What next? British Petroleum, (BP) is a British multinational oil and gas company. Remember their oil spill in 2010? Before the spill, in 2009, BP paid worldwide effective tax at the rate of 33% on profits of £15bn. Of that, £5bn was tax, the company gave more than £900m to the UK Government, about as much as this country gets from its entire transport and communications industry. BP paid £930m in UK tax on its profits in 2009, which was well down on the £1.7bn it had paid in each of the previous three years.
UK pensions have huge holdings of BP shares and the company says that £1 of every £7 paid in dividends to pension funds by FTSE 100 companies last year came from BP. Also, it is estimated that about 18 million people in the UK either own BP shares or pay into a pension fund that holds BP shares.
Middle East Oil Pipelines
1) A tactic from Iran to intimidate the western world would be to lower production quotas. One of the world’s leading oil producers, Venezuela, is both an ally of Iran and member of OPEC and likely to support the Iranian position. Even with U.S. backing, the Saudis may be less willing to stand up to Iran and use its excess capacity to moderate the impact of any reduction of oil supplies.
2) While there was much discussion on the pipeline’s revival, the conclusion was that such an effort would be entirely infeasible, because such a pipeline would be a magnet for terrorist attacks due to the regional stigma attached to Israel.
3) The Rumelia oil field is a super-giant oil field in southern Iraq.
4) Old Kirkuk pipeline
5) Iran has threatened to close the Strait of Hormuz in response to economic sanctions or military action aimed at its nuclear program. Over 17 million barrels of oil per day flow through the Strait, and the mere threat of closure has kept oil prices elevated.
You would think the deep-sea oil spill would have hit BP pretty hard. Well someone did, nicely cutting the company’s tax’s for the next four years. In 2012, there has been a lot of controversy over the US wanting to claim the Iraqi oil fields as collateral for the cost of the war. Later it was decided that foreign oil companies could bid in an auction to win the right to help the Iraqis drill for oil. Sounds good?
The oil field up for auction was called Rumelia; it is considered the third largest oil field in the world. The US was not allowed to take part in the bid due to people’s suspicions over their motives. It gave everyone a little confidence that we didn’t go to war for the oil. Two companies ended up winning the bid, so who owns it? The field is owned by Iraq but subcontracted to BP and CNPC under Iraq Producing.
Each can take 250,000 barrels per day for $10 each, but they’re trying to push for double of that amount. So what has this have to do with America? BP isn’t just British, The US operations comprise nearly one-third of BP’s worldwide business interests, and the US is the country with the greatest concentration of its employees and investments (approximately 20,000 workers). So who gets what? The UK gets the tax, even though at the moment a litre of fuel is around £1.40 ($10 a gallon). I believe this is so the British government can say that the UK didn’t go to war over oil, while making big bucks though the taxing of oil sent to our friends across the pond in America, and that is shown by the lower prices at their pumps.