Monday, June 14, 2010

Has BP Been Too Careless Due To Its Imperial Past?

There has been much speculation about why British Petroleum has been reportedly slopppier and more careless about safety and the environment than other oil companies. This may not be it, but the company has a past that is probably more tied up with classic imperialism than any other, or at least as much as the top ones. In that regard, its only rivals are probably the old Standard Oil, with the tradition most carried on after its breakup by New Jersey Standard, or Esso, which would become Exxon (and then merge with the old New York Standard to become Exxon Mobil), and Royal Dutch Shell, with its British-Dutch lineage, originating out of a company that sold shells out of the Dutch East Indies.

BP's origin is in the later 19th century D'Arcy oil concession by Persia to Britain, and much of the troubled history of Persia/Iran and the West has focused on BP, which was originally called the Anglo-Persian Oil Company, and then the Anglo-Iranian Oil Company after 1935 when Reza Shah changed the name of the country to go along with his budding alliance with Aryan master race fan, Hitler.

In the early 1950s, the Iranians under Mossadegh nationalized the company, which had been owned by the British government since 1917, when First Lord of the Admiralty, Winston Churchill, had it nationalized to guarantee a supply of oil for the British navy during WW I. The Brits had to bring in the US CIA to help overthrow Mossadegh and restore the Shah, along with BP activities in the country, although the price was that some US oil minors got in on the action there.

Perhaps an appropriate symbol of BP's traditional position as one of the first among the leading oil majors is the meeting that took place at Achnacarry Castle in Scotland in 1928. It was between the CEOs of BP (then APOC), New Jersey Standard (now Exxon Mobil), and Royal Dutch Shell. They made the Red Line Agreement and the As-Is Agreement, with the Red Line Agreement involving drawing red lines on a world map to deliineate which parts of the world would go to which companies. BP got Iran. Royal Dutch Shell got Kuwait. Both of them got into Iraq. Jersey Standard got Saudi Arabia, and even today, ARAMCO is dominated by Exxon Mobil.

The ghost of the Red line Agreement hovers over the world even today, even as their effort to restrict prodcution and prop up the price of oil collapsed when the great Texas gusher came in during 1930 at the beginning of the Great Depression, collapsing the price to about a tenth of what it had been. But, BP and the others would live to see it rise again, along with their fortunes, through thick and through thin, although BP may have overdone it this time with its hubris.


Shag from Brookline said...

As Shakespeare might have put it:

"BP or not BP, that is the question."

Maybe Pres. Obama will provide the answer tonight.

ProGrowthLiberal said...

Perhaps - but I still say that if a company only has to pay pennies on the dollar for any environmental damage, such sloppiness is what a pure profit maximizing model would predict. said...


I agree that all of the oil companies should be paying more to avoid and correct mistakes. But the reports have been steadily trickling in that BP has had a worse record in these areas than other oil companies, including some of the majors such as Exxon Mobil. Some of their people and some at Shell, the other of the Big Three, have publicly expressed annoyance and disgust at the incompetence of how BP has handled this matter.

Anonymous said...

The name of the company is not British Petroleum anymore, it is simply BP.

Limey said...

Re: Anon

Nuh-uh! BP is now Bloody Pommies!