Environmental Engineering Reference
In-Depth Information
borrow on the capital markets to top up their own funds, they are able to
borrow general-purpose funds without having to tell lenders exactly what
the borrowing will be spent on.
Small oil companies, without the credit rating or track record of the oil
majors, usually have to get specific finance for each project, and to pledge
future production from the oil or gas field in question in order to under-
write their borrowing.
Risk-sharing
For all the industry's recent technical advances, finding commercially
extractable amounts of oil and gas is still a hit-and-miss business. So the
oil companies have taken to splitting risks and expense by partnering
with each other on upstream oil and gas projects, despite the fact that any
such collaboration in
downstream
petrol and oil sales and prices remains
absolutely illegal under anti-trust law.
To take a striking example, the Kashagan offshore oil field in the
Kazakh zone of the north Caspian is being jointly developed by Eni of
Italy, the Anglo-Dutch company Shell, ExxonMobil and ConocoPhillips
of the US, France's Total and Inpex of Japan as well as the local Kazakh
oil company. The idea of, say, US, European and Japanese car companies
sharing a joint car factory in such a way would be unthinkable. Car
companies would worry about their partners spying on their proprietary
design and marketing, which of course is far greater in a manufactured
product than a simple commodity.
It is true the oil companies have developed some proprietary tech-
nologies, but this is supplemented by techniques and services supplied
to the industry on a common basis by the oil services companies like
Halliburton and Schlumberger - and there is nothing very special about
the end-product of oil and gas molecules.
Renewable energy finance
Renewable energy is growing fast from small beginnings, because what is
special about the electrons produced by wind and solar power, or bio-gas
molecules, is that governments are allocating them increasing amount
of subsidy and support in the fight against climate change. The green
stimulus portion of governments' 2009-10 economic recovery plans (see
p.20-21) boosted the amount of money going into clean energy research,
