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February 21, 2008

Bashing Private Oil Companies No Longer Valid

By Carlos Alberto Montaner

The big oil companies are not much loved in Latin America. In Venezuela, Hugo Chávez has pounced on Exxon-Mobil. He has decided to punish it because the U.S. company sued his government in international court for nonobservance or violation of contracts. To Chávez, the exercise of a right in response to the violation of some accords is an affront to the nation and the Bolivarian revolution.

And it is not known why poor President Bush ended up paying for the broken china. Chávez insulted him again over the ruling of the British courts. Every time Chávez is bored, he starts razzing the U.S. president. He leaves him alone only when he amuses himself by insulting Colombian President Alvaro Uribe.

More or less the same happens in Ecuador. The more bizarre confrontations (though not the only ones) generated by the government of popular President Rafael Correa are against Chevron. Ignoring several previous court rulings, and always willing to litigate with or without reason so long as the defendant has deep pockets, the government of Quito, joined by several ineffable ''green'' NGOs, demagogically demands that the company pay billions of dollars as compensation for some alleged ecological damages, which Chevron dealt with years ago and which Petroecuador, the party most responsible, derisively ignores.

In reality, it is easy to bash the oil companies. They have a bad rep. Every time a motorist must fill his tank, he inevitably curses them. At $3 a gallon (a lot more in Europe), the reaction is eternal hatred, without realizing that the gasoline stations profit the least -- barely a few cents. When in doubt, blame the oil companies. They have been accused, sometimes with reason, of being dangerously powerful, of abusing their monopoly, of artificially boosting prices, of unleashing wars and poisoning the environment. Almost all governments, the United States' included, have in some way gone toe to toe with them.

That may have been partially true some decades ago, but those famous ''seven sisters'' -- Standard Oil, Royal Dutch Shell, British Petroleum, Texaco, Chevron, Exxon, and Mobil -- are no longer what they once were. Whereas they once hogged 80 percent of the world's production and reserves of crude oil and natural gas, today they hold less than 10 percent and are just shadows of their former selves.

They have been replaced by seven other sisters, in this case state-owned enterprises, to which we can attribute the astronomical price of oil and other associated calamities. According to Financial Times, these are the new villains: Saudi ARAMCO (Saudi Arabia), Gazprom (Russia), CNPC (China), NIOC (Iran), PDVSA (Venezuela), Petrobrás (Brazil) and Petronas (Malaysia).

It's senseless to wonder why so little international investment goes into Latin America. What's surprising is that it continues to flow, albeit drop by drop, despite the nonobservance of accords and the lack of seriousness of the judicial power in almost all of the region.

An important Spanish banker -- whose name, naturally, I cannot mention -- said to me: ''We have wasted 10 precious years in Latin America struggling against arbitrariness.'' And then he added, with a touch of melancholy: ``It makes no sense doing business outside the First World. What you earn in a decade, you lose in a week when an unscrupulous president changes the rules of the game.''

In addition to being a source of work, foreign investments are a grand vehicle to transfer technology and multiply productivity with modern management techniques, even to boost what in the past was called ``social consciousness.''

A new moral vision of the relationship between society and the productive apparatus has dawned, and the major enterprises assume, as part of their task, what they call ``corporate social responsibility.''

It is not true that the only obligation of businessmen and their executives is to secure profits. Poverty, disease, the quality of education and the proper care of nature are also concerns to serious enterprises. This is not only for ethical reasons but also because it is easier and more profitable to do business in a healthy and prosperous environment than surrounded by violence, children in rags and shacks made of boards and corrugated zinc.

But none of this seems to be important in almost all of Latin America. That is why, with every passing year, we become more and more insignificant.

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