Environmental Engineering Reference
In-Depth Information
Another example of oil being used for political purposes is Venezuela's
Petrocaribe scheme (see box).
It is not unknown for IOCs to spend some of their revenue on social
projects, such as the hospitals and schools that Shell has built in the Niger
delta. But this is a special case. Here Shell is trying to compensate for the
failings of the Nigerian state and to give the people of the oil-bearing delta
some sense that they are getting a return on the delta's oil wealth. Shell's
self-interest is to reduce local people's temptation to sabotage oil facilities
and steal oil production. In general, these sort of social programmes are
something one might expect an NOC to carry out, not an IOC.
As a result many NOCs appear to lack incentives to maximize profit,
because much of this profit disappears into the state budget for non-oil
purposes or into subsidizing the price of oil and oil products.
Can NOCs and IOCs collaborate?
Generally, IOCs would love to collaborate more with the NOCs. The
Western majors may complain, often with cause, about the bureaucracy
Russian Prime Minister Vladimir Putin and Venezuelan President Hugo Chavez
in Caracas, in April 2010. Putin arrived in Caracas to bolster energy and defence
ties with Chavez and launch a $20 billion joint venture to tap the Orinoco heavy
oil belt.
