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Wednesday, October 17, 2018

MALAYSIAN PRIME MINISTER VOICES CONCERN AT REEMERGENCE OF A GLOBAL OIL OLIGOPOLY

The Prime Minister of Malaysia, Mahathir Mohamad, opened the Asia Oil & Gas 2000 conference in Kuala Lumpur on 29 May with a keynote speech in which he warned of the dangers that the new mega-sized oil companies pose to populations worldwide and to the environment if their drive to improve profits by gaining greater control of the industry is allowed to go unchecked.

The event, the fifth in the series, was well-attended and Minerva Alfonso, INTERTANKO Senior Vice President for Asia-Pacific, was among the delegates.

Oil and politics go hand-in-hand, the Prime Minister told his audience, and the oil companies have always sought to exert as much control of the world’s primary energy source as possible. Many of the offspring of John D Rockefeller’s Standard Oil monopoly became dominant members of the so-called Seven Sisters oil majors. These multinational corporations, in turn, prompted the formation of another cartel - OPEC - an alliance of oil-rich nations seeking a fair price for their vital hydrocarbon resource. The greed of the major oil-producing states over the past decade led to high production levels and a collapse in oil prices during the latter half of the 1990s.

"Cheap oil has brought about a re-emergence of the oil company oligopoly, and the new organisations are exercising a greater degree of control than at any time since Standard Oil was broken up in 1912,” said Mahathir Mohamad. “The many mergers of oil majors in the past few years have ensured that together they can control the production, refining and marketing of oil as well as of the downstream petrochemical industries. The new global giants are effectively the tools with which rich nations can ‘invade’ those poorer countries which are seeking to develop their own oil industry and thereby exert political influence.”

“We are also told that globalisation, liberalisation, deregulation and market forces are good for us,” continued Mahathir Mohamad, “but pardon me if we remain skeptical. The multinationals were too quick to pull out their capital and short-sell our money when the economic crisis hit our region in 1997. Short-term gain was the only motive for their precipitous action. Looking ahead, our own banks and industrial companies will be easy meat for the giant corporations preparing to return to the poorer countries in pursuit of global market share.

"I do hope you will spare a thought for ordinary people whose needs are really what make your industry tick.  Without them oil would be worthless. When the great hedge fund traders manipulate currencies they see only figures on the screen, figures representing the units of currency they deal in.  People are irrelevant.  That a zero point per cent drop in value can kill hundreds of people, starve them is of no interest to these traders.  I hope that you who deal in oil and gas would always bear in mind the people whose life and death depends on you" concluded the Prime Minister in his opening address to the Asia Oil & Gas 2000 delegates.

For a full copy of the speech, please contact minerva.alfonso@intertanko.com