Another Nutjob in the Pipeline

Whenever the US gets involved in a conflict somewhere in the world there is always, always somebody on the American Right who will come out with some bizarre conspiracy theory involving a pipeline.  It’s always a pipeline.

Before 9/11 when the Taliban were running Afghanistan and blowing up statues of Buddha, the lunatics on the extremes of both Left and Right were saying that the US was supporting the Taliban because they wanted to build a pipeline through the country between Pakistan and, erm, somewhere.  They cited a report showing that Unocal, an American oil company now owned by Chevron, did once consider building a pipeline through Afghanistan but the project got nowhere near even the engineering phase.  They accepted without question, as these people often do, that US foreign policy is determined in part by medium-sized oil companies best known for gasoline retail.  Or at least it is when the Jews go for their lunch break.

Immediately following the American assault on the Taliban which removed them from power, the conspiracy theorists simply switched to claiming the reason for the attack was in order to build – you guessed it – this Unocal pipeline.  Oliver Kamm wrote a decent post covering this switch and the absurdity of it on his blog at the time, and it is worth reading.

I was reminded of this today when I was directed via another blog to this Twitter post:

It’s always about pipelines with these people.  They have this daft idea that pipelines are so valuable it is worth going to war just to build one.  How the US government is supposed to benefit from a pipeline, presumably carrying gas, from Qatar to Bulgaria(!) I don’t know.  Obviously whoever dreamed up this particular theory hasn’t heard much about LNG and the growing spot market, nor US shale gas.

You don’t need to be a fan of Obama or Clinton to find this level of political analysis from the American Right to be as stupid as anything the American Left can come up with.

Should have seen it coming…

When he’s not abusing Sydney’s nouvelles riches ladies of leisure and snapping photos of Sydney’s sartorial disasters, The New Australian is fond of pointing out two things:

1. Like Brits, Australians have bought into the idea that property is a guaranteed, one-way bet to wealth; and

2. Australia has not experienced a recession in the last two generations, and is therefore going to get a colossal shock when the reality of the current downturn starts to bite.

In support of these positions is a telling article from the BBC:

After 23 years of growth, including one of the biggest mining booms in the nation’s history, tumbling iron ore and coal prices have put a brake on Australia’s economy – and mining towns are paying the price.

Peter Windle is a casualty of the mining slowdown. The New South Wales mining employee has lost a well-paid job, a company car and an annual bonus that in some years was as high as A$60,000 ($48,800; £31,300).

A termination package from the mining company he used to work for has helped soften the blow. But Mr Windle still had to sell his investment property to keep his head above water.

It’s not difficult to see what’s happened here.  Mr Windle failed to recognise that the recent period of high salaries and plenty of work was an anomaly and would not last forever, and so leveraged himself to the hilt buying a property which, in ordinary times, he couldn’t afford.  You can, well, put your house on the “investment property” that he bought was wildly overpriced and unlikely to break even unless the resource boom continued for another decade.  A quote from the article hints at this:

“It’s the worst I’ve seen it in 28 years in the mining industry,” says Mr Windle. “Everyone is getting out. Three hundred houses are for sale in my town, three in my street, and rental prices have collapsed on older weatherboard houses from A$1,000 a week to A$200,” he says.

Ah.  So what’s the betting Mr Windle has bought an “older weatherboard house” for a staggering sum of money and was relying on A$1,000 per week in rent for the next 10 years in order to pay if off?

If he’s been 28 years in the mining industry, he should have known better.  I am incredibly fortunate to have hit mid-career in the oil and gas industry in a period of unprecedented oil prices and salaries.  Several of the industry’s old hands have told me of the lean periods in the 1990s when there was no work, and one of them told me he worked a job for a year which paid less than he was spending: but at least it slowed the debt accumulation.  I remember in Sakhalin some of these same old hands telling us young pups that we should count our lucky stars and invest the money wisely, and know that this might not continue forever.  Few of my generation (and younger) missed this lesson.

Most of us knew that the good times would come to an end, which they did in 2008-9 but thankfully picked up again fairly quickly.  Everyone used the cash to buy property, which makes a sound investment if geographically diverse, a future permanent home, and/or is part of a portfolio of other investments.  But other than perhaps a few weeks after the initial purchase, few were daft enough to mortgage themselves to the point they’d be forced to sell if the prevailing boom came to an end.  For a short time I was a day-rate contractor, and the lesson dinned into me then was always have 6-12 months of salary stashed away in cash.  So if you lose your job, you have a cushion.  It’s a habit I still haven’t gotten out of even as a staff employee, keeping at least one, preferably two, year’s mortgage payments and living expenses in cash should the worst happen.

Obviously this isn’t feasible for most people working PAYE in civilisation in normal jobs, but for those of us who rode the oil and gas wave over the last 5 years or so, we were making hay while the sun shone.  I considered myself (and still do) extraordinarily lucky and privileged to have been able to benefit from it, but not a day goes by without having an eye on the oil price and the appreciation that in 3 months time I could be out of a job with a mortgage to pay, a wife to feed, and no home back in the UK.  I am grateful to those old hands I met in Sakhalin and Nigeria who told me not to squander the money made in the good times and be very aware that someday it will end: I learned to treat it as a bonus, not business as usual.

It appears there were not so many wise heads in the Australian mining sector:

It is poor consolation for Mr Windle, who is now contemplating looking for a job in another state.

“I’m 54 now, and I’ve had a hip replacement. I might get a job at an outback mine in the far north of Queensland but I’d hate to spend another year working away from home. And suppose they lay off workers too?” he asks.

It’s a shame for Mr Windle and others like him, but he should have factored all of this in when he bought his “investment property” and worked out his monthly cashflow.  Tough times, and it’s going to get worse.

Beware of a Man in Search of a Legacy

Historical legacies are interesting things, offering as they do a chicken and egg situation.  Was Napoleon motivated foremost to secure his name in history and his deeds merely the methods he used to do it?  Or did he simply fancy taking charge of France and conquer large swathes of Europe by deploying astonishing military skill, and the legacy simply resulted from his actions?  I’m more inclined to believe the latter.  Not that great historical figures don’t have enormous egos and are unaware of the significance of their actions, but I don’t believe Peter the Great thought “if I want to be remembered in history I’ll have to do something big” and then after weighing up various options decided upon building a new capital and developing a Russian navy as the way to go about it.  No, I think he decided on building a new capital and turning Russia into a European-facing naval power and his legacy resulted from this decision.

Of course, the only people who succeeded in creating a legacy were those whose actions were both successful and significant.  History is littered with those who had grand ideas that never came off, and others whose actions changed little in the grand scheme of things.  What we hear even less of, thankfully, are those who, longing for a place in the history books, decided to create a legacy and then based their actions around this goal.  How do we know such people existed?  Because they’re still with us.

I remember during the New Labour years in the UK, people were always on about Blair’s legacy.  I think that’s the first time I was politically aware enough to see that somebody’s policies are being driven by what he wants people to say about him in the future, rather than what he actually believes.  Education Education Education was one mantra, that came to nothing.  Whatever the state of British education now, Tony Blair isn’t going to be remembered for playing any significant part in it.  Insofar as he has a legacy, it is one of a disastrous war in Iraq.  Those who supported the war don’t think he has a legacy at all.

Barack Obama is another modern politician in desperate search of a legacy, hoping to go down in history for something other than his skin colour.  He may well achieve it with Obamacare when the bills finally start coming in, although not for the reasons he thinks.  But that’s not enough: ill-advised peace talks with Iran and muddled overtures towards Cuba have followed, as Obama seeks a geopolitical issue on which to hang his hat in the history books.  Both are bound to fail.

Those who actively seek a legacy, rather than simply let it follow their actions, are doomed to fail largely because they lack the conviction to see their decisions through.  Historical legacies are not the results of popularity contests, in fact usually they’re the complete opposite.  Just ask Genghis Khan.  Those who succeed in pulling off great historical feats (both good and bad) do so from a position of absolute determination and self-belief in their actions, and will see them through regardless of the setbacks, or die in the attempt.  And the actions themselves are normally bold, brutal, and unprecedented.  This is in contrast to the modern politician seeking a legacy, who will be uncertain even on which path to take to achieve it, let alone the required actions.  At the first sign of trouble – an unkind editorial, an unfavourable opinion poll – most of them will backtrack and seek another way.  Abraham Lincoln didn’t suffer from this.  They also don’t think big enough: legacies are made by actions which affect millions for generations, permanently changing a country or continent, not tinkering with health policies or lobbing a few Tomahawks.

It is probably a good thing that today’s world doesn’t readily allow the actions that bring about the sort of legacies historical figures have left, given that most of them involved death and destruction on an industrial scale.  But the problem of those seeking a legacy, rather than simply doing their job, remains.  This brings me onto the current state of Russia under Vladimir Putin.

There is no doubt that Putin was very good for Russia in the early years: young, fit, and sober he was probably the best leader Russia has ever seen, although I should add that the bar is set extraordinarily low.  Russia in the ’90s was a terrible place, and Putin provided much needed stability and a reining-in of the oligarchs and gangsterism that plagued the country.  How much of this was down to him personally is debatable, but under his reign the currency stabilised, the economy grew, violence declined, and living standards rose as a new middle class of moderately wealthy Russians appeared.  The decade between 2000 and 2010 probably represented the best period Russia has ever seen (although again, the bar is set astonishingly low) and Putin deserves considerable credit for presiding over it.  Given what Russians lived through in the USSR and its aftermath it is not difficult to see why Putin was, and remains, so popular with his people.

Now we can argue that Putin should have done more, but I don’t take that view.  What he had achieved up until around 2006-7 had surpassed all expectations, and I don’t think anything more should have been asked or expected of the man.  That’s not to say there was not an awful lot left to do in Russia: there was.  It is to say that Putin was not the man to do it.

There are limits to what people can do in office, and that is often driven by time.  A two-term president in the US is usually in charge of a very tired administration in the final couple of years, regardless of how good they’ve been beforehand.  Even New Labour’s supporters were glad to see the back of Tony Blair after 10 years as Prime Minister; Margaret Thatcher left Downing Street a tired shadow of the vibrant woman who had entered almost 12 years previously; and despite the economic boom and rise in living standards Australia enjoyed under 11 years of John Howard, the population felt they were in need of a change when they kicked him out.  The optimum period in office for a leader in a modern democracy is approximately 7-8 years, after which their administration is plagued by various scandals, stumbling policies, tired rhetoric, and a population that has gotten tired of seeing the same damned face on the TV every night and could use a change.  Even the Soviet leaders eventually departed, unable to fulfill any more promises or bring about change in the way they could when they first took over.  With the exception of Stalin, few missed them.

By this measure, Putin’s time was up around 2007.  Having taken over as President in 2000, he was required to step down in 2008 when his two-term limit had expired.  This would have been a good time to usher in a protégé and retire from politics, having achieved so much and leaving the country in far better shape than he found it.  He would have been universally admired both at home and abroad, and gone down in history as a truly good, if not great, Russian leader.

But unfortunately, he was having none of it.  With the idea of amending the constitution to allow him to remain President floating around in the final years of his second term, he sidestepped the issue by installing a puppet President in Dmitry Medvedev, and slotted effortlessly into the Prime Minister’s role transferring his previous authority to his new office until it was time to return to his old job four years later.  Starting around 2006, buoyed by high oil prices that had brought enormous wealth to him and his friends and unprecedented wealth to many ordinary Russians, Putin started to strut his stuff at home and abroad.  A new wave of Russian nationalism took hold, taking the form of increased anti-western rhetoric, a re-positioning of Russia as the victim of foreign exploitation, and a desire to get more involved in global affairs in order to protect Russia’s perceived interests.  It was during this era that the Russian government intervened in several major oil and gas projects operated by western oil companies, citing legal or environmental irregularities as justification for bringing them back under state control.  At the same time, Russia decided the operatorship of the giant Shtokman project in the Barents Sea would remain with Gazprom, the state-owned energy giant.  In September 2007 I wrote that the policy of resource nationalism that Russia had pursued the previous summer could one day be seen as a turning point in the country’s development, the time at which the Russian leadership decided that the production of oil and gas by state-owned behemoths in an otherwise unreformed economy was the route to future prosperity.

For a while it was looking good for Russia.  The country was rocked by, but ultimately survived, the global financial crisis thanks to an oil price that quickly rebounded after an initial tumble.  But crucially, once he’d decided to remain in power, Putin failed to reform the economy beyond the Soviet-era export of natural resources, primarily oil and gas.  As I said earlier, given everything Putin had done to stabilise Russia I don’t think the onus was on him personally to reform the economy: such a daunting task would have had to fall to somebody else.  But by staying on, unless he was willing to double-down on his efforts and likely expend whatever energy and political capital he had, such a reform was postponed indefinitely.

It is not just the case that Russia is too dependent on oil and gas exports, it is that it is almost impossible for individuals to develop and grow a profitable business unless they are well connected to a rich and powerful entity in the locality.  For all practical purposes, this means being pals with the mayor or FSB of the local town, or the bigger politicians in the larger cities.  Otherwise, your business simply won’t be allowed to develop.  It is no surprise that most Russian towns feature one giant shopping mall owned by a local bigwig who also owns a nightclub and a few restaurants, with another one or possibly two smaller “empires” making up the bulk of the remaining local business portfolio.  If an enterprising but unconnected person decided to develop a small patch of land beside the river and turn it into a waterside restaurant, and by some miracle obtained the permits to get it up and running, within days of turning a profit (or even before) he would lose his business.  He would be forced out: either by a never-ending stream of regulatory authorities ranging from fire safety to health inspectors, all of whom would demand a cut of the proceeds to “allow” him to stay open; or simply by a gang of thugs working on behalf of a local bigwig who fancies co-opting the business (now that somebody else has done all the hard work) into his own empire.  In my discussions with Russians, this is something which is absolutely beyond dispute: the number of parasites that descend on private, independent businesses makes running a successful enterprise near-impossible.  In Russia, you may run a business only with the approval of the local power chiefs, and tribute must be paid.

This situation is a product of the enormous bureaucracies that govern Russian business life, coupled with the corruption that infests almost every corner of them.  Overhauling this is a mammoth task, and in all likelihood impossible.  But that doesn’t mean it shouldn’t be tried, and the starting point would be to strengthen the country’s institutions – particularly the courts and justice system, and insisting that governmental authorities everywhere follow the rule of law.  However, that would require giving them independence and devolving centralised state power over a much wider area, and neither the Kremlin nor the regional powers were prepared to do this.  Like a lot of leaders who have enjoyed unopposed power a while, Putin began to see himself as indispensable.  Far from state institutions being granted more devolved authority and independence, Putin centralised Russia’s powers further, notably around himself.

Further convinced of his own indispensability, in no small part due to genuine feelings of support for the idea from the Russian population backed by crushing election victories, Putin became yet more assertive in his dealings with the rest of the world, determined to restore what Russians consider to be their rightful place in global affairs, with himself in the role of saviour of the nation.  Somewhere along the way, Putin seems to have sniffed an opportunity of one day being held in the same esteem as Peter the Great, Katherine the Great, and maybe even old Joe Stalin.  Sometime after 2012, the ageing Putin perhaps thought time was running out for him to establish such a legacy, and so stepped up his efforts.  Confused mumbo-jumbo regarding Imperialist Russia and Soviet history underpinned much of his foreign policy, with vague ideas about manifest destiny thrown in for good measure.  Having trampled all potential domestic opposition and removed any dissenting voices from within his own circle, Putin fell into the trap of all long-serving authoritarians: he started believing his own bullshit, hearing nothing but rapturous applause every time he spoke.  So when the opportunity to reclaim Crimea for Russia presented itself, Putin moved quickly to take it.

Now regardless whether you believe the Russian claims that the annexation of Crimea was necessary to prevent the Americans establishing a base there, the fact is that in 2006-7 and again in 2010-12 Putin faced the choice of either reforming the economy by overhauling the state institutions and rooting out corruption, or improving Russia’s position with regards global affairs and its near-abroad with himself as the figurehead of Russia’s resurgence.  It is almost beyond question that doing both was impossible, and completely beyond dispute that he chose the latter.  In my view, he did so for two reasons: it was much easier for him, coming more naturally; and he thought this was the best route to establish himself in the history books alongside other great Russian leaders.

With that choice, any hope that the Russian economy could free itself from local strongmen and the national giants was lost.  The government remained dependent on a high oil price to balance its budget, while the rest of the economy remained unreformed, unreconstructed, and hopelessly inefficient.  As a result, Russia in 2014 found itself still heavily dependent on imports and produced little of value domestically: even the foreign car assembly plants set up in western Russia are dependent on imported parts, for which they must pay in Euros.

So long as the oil price remained high, none of this really mattered.  But with its collapse, and the western-imposed sanctions, the Russian economy has nosedived.  This article by Tim Worstall explains just how grim things are looking for Russia, but does not tell the whole story.  The middle-class consumer boom which took place in Russia over the last decade was driven mainly by personal debt: people borrowing from banks or credit card companies.  With the real prospect of incomes drying up and jobs being lost, a lot of households are going to struggle.  But what makes it worse is that credit in Roubles was being offered at interest rates of around 15-20% but consumers had the option of taking loans in Euros or USD which only attracted interest rates of 5-10%.  Many Russians took the latter option, and now face paying household debts in Euros or USD at a time when their Rouble salaries are worth half what they were.  Even those who borrowed in Roubles haven’t escaped: according to my Russian friends, banks are “renegotiating” the interest rates with their customers, which means higher monthly repayments.  Coupled with the rapidly increasing price of food (not helped one jot by Putin’s ban on imported products), we could see many households going into bankruptcy for the first time since 1998.  And this is before one considers the effect of the Rouble’s decline on the country’s main employers.  The head of Renault-Nissan in Russia recently came out and said manufacturing in the country is facing a bloodbath.

What will happen next is anyone’s guess, but a return to the grinding poverty and economic instability of the 1990s is looking increasingly likely.  Putin remains as popular as ever, having successfully dumped the nation’s economic woes squarely at the feet of the United States and European Union.  But as the economic reality starts to sink in, and increasing numbers of people with no jobs go hungry, issues such as political leadership and the inequality between the elites and the rest are going to become more pronounced.  Even if the Kremlin successfully manages to deflect the questions by piling on the anti-western rhetoric, this will not solve the underlying economic problems.

The trouble now is that it is too late.  The economy cannot be reformed with the sanctions still in place and the Rouble so weak, and so they have no choice but to ride it out until the oil price rises again, which on current forecasts could be a while.  Russians are facing the very realistic possibility of returning to the 1990s: empty shelves already line supermarkets, companies running package holidays abroad are going bankrupt by the dozen leaving local vacations as the only affordable option, and photos on Facebook show mass crowds buying TVs, video cameras, Ikea furniture, and other household items they don’t need in an effort to swap Roubles for something with a chance of retaining some value.  If this keeps up, it may be fair to ask exactly what progress has been made in Russia in the past 20 years.

Putin had the option of stepping down in 2008, his job well done, and handing over to a successor.  He chose not to, and instead opted to pursue what he hoped would become his legacy, which would be underpinned by the self-development of Russia’s vast hydrocarbon reserves.

The worst part is they didn’t even get that right.  The last major oil and gas development in Russia was the Shell-built Sakhalin II LNG project, which started up in 2008.  The Gazprom-led Shtokman development ground to a halt amid spiralling costs and disagreements between the partners.  Rosneft has been in the news mainly for its deals with BP, its appropriation of Yukos and Bashneft, and its staggering corporate debt rather than concrete development plans bearing fruit.  Umpteen grand announcements ranging from Nigerian gas deals and far-east LNG plants to Arctic developments and Chinese pipelines have come to nothing (or remain stuck on such details as pricing).  As of 2014, Russia remains as unpredictable, risky, and dangerous for an oil company – even a Russian one – to do business as it was in the 1990s.  For a country that picked hydrocarbon development as the sole political-economic strategy in lieu of reforming the economy and engaging with the west, this is a shockingly poor performance.

So what of Putin’s legacy?  If Russia hangs onto Crimea, which it probably will, it might warrant a note in a history book somewhere (offered as much prominence as Khrushchev’s transfer of the peninsula in 1954, which few knew about until recently).  But it’s hardly the stuff to warrant a mention alongside Katherine the Great or Ivan the Terrible.  As I said at the beginning of this post, the modern-day politician (of which Putin is one, no matter how much he wishes he belonged to another era) just doesn’t think big enough to create a proper legacy.  In the grand scheme of things, the annexation of Crimea is mere fiddling, and expensively at that.

The irony is that if he had stood down in 2008, he would have left a legacy of quite some merit.  Had he decided to stay and expended his considerable political capital in ramming through the economic and institutional reforms Russia so desperately needs, he would have created a legacy even greater (albeit one that carried a lot more risk of failure).  Instead it is looking increasingly likely that his early work will be completely undone, and his legacy will be one of having progressed Russia precisely nowhere since he took over, having gone the full circle from crisis-ridden poverty to stable wealth and back to crisis-ridden poverty in just 15 years.  Putin’s is a story more suited to Africa than Russia, with a legacy more akin to Robert Mugabe than Peter the Great.  What a terrible waste.  What a terrible shame.

The BBC: Inventing new oil companies since 2014.

I knew that this BBC article would be bollocks as soon as I saw the headline: Halliburton reports $622m profits. The first thing you see is this picture:

_74356694_74356692

With the caption: Halliburton was one of the contractors involved in the BP Gulf of Mexico oil spill in 2010″

And you know immediately that the point of this article is to say “evil, polluting American company makes enormous profits” and allow all the assorted lefties who think the BBC is a national treasure to nod smugly at this further proof that capitalists are raping the planet.

Naturally there is no mention in the article that the US Department of Justice closed its investigation into Halliburton’s role in the Macondo blowout over 18 months ago, imposing a fine of $200k for no more than the unauthorised deletion of a computer record.  Now personally I think this was a complete whitewash on the part of the US government protecting one of its own and dumping as much blame as possible on BP, but the BBC doesn’t say that either.  It just doesn’t mention anything, possibly in the hope that its readers will assume Halliburton continues to shoulder responsibility of some sort.

But the article doesn’t even get the basic facts straight:

US oil exploration firm Halliburton has reported better-than-expected first quarter profits, helped by robust drilling activity in Russia, Saudi Arabia and Angola.

Oil exploration firm?  Halliburton is an oilfield services provider, it does not carry out any exploration of its own, as a brief glance at its corporate website would tell you.  Secondly:

The world’s second-largest oil company said net income for the three months to the end of March was $622m (£370m).

God only knows where they got this from.  Aside from Halliburton not being an oil company, even if it were, with a market capitalisation of about $53bn it is an order of magnitude smaller than ExxonMobil ($436bn) or Chevron ($237bn). I’m not even sure it’s the world’s second largest anything, being as far as I know the world’s largest oilfield services provider.  But then this is the BBC, so who knows what they’re waffling on about?  Still, the narrative fits: polluting American oil company makes giant profits.

People are threatened with jail to pay for this shite.

Women in the Oil and Gas Industry

There’s an article over in Upstream Online which I feel misses the point, that point being the one which Tim Worstall bangs on about with regularity: gender inequality in the workplace is actually a motherhood issue.

A new survey claims the majority of women feel welcome in the oil and gas industry but nearly half believe the do not get the same recognition as their male counterparts.

The survey by NES Global Talent examined the gender talent gap in the oil and gas industry and ways of attracting and retaining women in the industry.

The survey claimed that 75% of women who participated felt welcome in the industry and 89% would encourage other females to join, however 45% said they believed men get more recognition in the industry.

While the survey found that some respondents found oil and gas a welcoming industry with equal opportunity policies in place, others said women were restricted to supporting roles and did not enjoy the same salaries and career opportunities as men.

From what I’ve seen, there are several women with high-flying careers who occupy senior and (presumably) well-paid roles in the oil business.  But in most cases they are childless, and often unmarried.  The problem is that to grow in the international oil business you have to have expatriate experience, and for a fast-tracked career you need to have done your expatriations in a hardship location.  For single women this isn’t much of a problem, but for those with young children it is extremely difficult to dovetail the requirement to live in a hardship location with the responsibilities a woman has towards her family.  This is pretty much admitted:

The percentage of women in the market has increased. Unfortunately, the number of women in technical roles and field positions are still scarce. The general mentality that this is not a female oriented environment still exists.

And the answer is right there: the reason there are few women in field positions is because field positions are the absolute worst positions for anyone to also manage a family life.  Unless a woman is childless or has a stay-at-home husband, it is going to be exceptionally difficult to hold down a field position, especially as more and more facilities are to be found in hardship locations or the deep offshore.

When asked how their company could be more welcoming and encouraging to female employees, respondents gave a variety of answers including  providing equal opportunities, female role models, flexible working hours and more support to women with children.

Which is great, but how can somebody in a field position be offered flexible working hours?  Most people are offshore on a 28/28 rotation or in the middle of nowhere on an 8/2 or 6/3.

A majority of respondents said they planned to remain in the industry for the next two-to-five years, but 18% said they intended to leave the industry.

When questioned for the reasoning behind their decision a range of answers were given, with family commitments, a better work / life balance and a lack of equality being among the main reasons.

Well, yes.  My advice to anyone who wants to put family before work and have a good work/life balance is to give the oil industry a wide berth.  I’ve quite deliberately remained childless partly for this reason, and I’ve not seen my wife since 2nd December and not lived with her since August 2009.  Such is the price you pay when you want to command a decent salary in an industry which unfortunately has most of its opportunities in places nobody wants to live.

What women are up against is people like me, who have forgone the family life in order to get the better positions.  The industry is full of men like me, and full of others who do the same but fail to keep the marriage or family together.  If women want to compete with this, they need to make much the same sacrifices, and the successful women you see in the industry have done this, at least for a period.

It is my firm belief that women are offered exactly the same opportunities as the men, but are also expected to make the same sacrifices with regards their family and personal life.  Unfortunately, in general, this hits women much harder than it does men.  I think oil companies have done a great deal to make it easier for women to occupy senior positions whilst minimizing the impact on their family life, but it’s hard to see what else they can do.

One thing I’ve noticed is that there is no shortage of female engineers in the oil industry, but they do tend to cluster around certain disciplines.  Far more women do chemical engineering at university than the other disciplines, which means that a lot of process engineers in the oil industry are female (and damned good, most of them).  The trouble is the natural career path for a process engineer is into operations, which means at some point you need to spend time on site.  To reach the upper echelons of management you will have to become an Offshore Installation Manager (OIM), which will be offered to you when you have about 15-20 years of experience (i.e. aged between 35 and 40).  Most women of this age will have kids and a husband who cannot manage if the mother just disappears for 28 days at a time, which is what an OIM’s job entails.  I have seen women offered this role but have turned it down for precisely these reasons.  The women who take these roles generally don’t have kids.  It’s really hard to know what to do about this.

One thing I am glad about was that the survey said most women felt welcome in the oil industry.  I have felt, in the oil companies at least, that woman enjoy far more equality and acceptance than they would perhaps find in other industries (law, for example).  I have yet to think of a time when my thoughts or attitude have changed in the slightest on discovering a particular engineer is a woman, and nor have I heard even the slightest suggestion from anyone – in over 12 years – that a woman doing a certain job is for whatever reason a bad thing.  The current head of my department is a woman, and I discovered this when I interviewed for the position: it didn’t make a blind bit of difference to me, never even occurred to me that it should.  The department itself is full of female engineers, most of them married with kids, and I probably interface more with women than men: again, it makes no difference to me.  At the risk of making a crude stereotype, I actually find female engineers to be pretty good as they pay considerable attention to detail.  And one of the most impressive engineers I have encountered in the industry, and by far and away the best risk and safety engineer I ever met, was an Australian girl.

I have seen the huge efforts oil companies have gone to in trying to accommodate more women in their career programmes, and the complete ease with which female engineers are accepted into what was once a male-dominated environment.  But for the reasons I have outlined I don’t think things are going to improve much from here, at least for those women who want a family life and a career in the oil industry.

Greenpeace Activists Released

I’m a bit late to this, having been preoccupied with other things, but the Greenpeace activists being held in Russia were freed between Christmas and New Year.

This went down roughly as I’d expected – some rough treatment dealt out by the authorities followed by intervention from Putin resulting in their release – but not completely.  I expected the charges to be processed further and with more publicity before Putin’s intervention, and that Putin – and the Russian government – would have made more of it, particularly their own benevolence.  But coming as it did as part of a general amnesty that involved people of far greater importance (and served jail time) than a bunch of foreign middle-class do-gooders, the release of the Arctic 30, as they are known in the media, was somewhat overshadowed.

I would dearly like to know what was said to them, and to the Greenpeace leadership, before their release.  Maybe a word of warning?  Or maybe nothing at all?  Whatever was said, the activists themselves are talking tough about how they would do it all again, but the proof of the pudding is in the eating: let’s see how many of them actually do so.  The fact that one protestor complained his vegetatian dietary requirements were not catered for in a Russian prison suggests they might not be too keen on a return, regardless of what they’re saying now.

I caught an interview with one of the Australian protestors on the news down here, and he was very evasive when he was asked if he’d go back for another go.  Obviously he needs to toe the managerial line by acting tough, but probably knows deep down that they may have had a lucky escape.  He also seemed clueless, stating the protest was because “we have an oil company drilling in the arctic with the full support of a government.”  Firstly, the expectation that a government should oppose a company going about its lawful business on its territory was not justified, and the interviewer didn’t bother pressing the point.  Secondly, surely this twit has realised by now that Gazprom is a state-owned company and for their not to have governmental support would be somewhat unusual.

I doubt Greenpeace will attempt the same stunt again, assuming they get their ship back (the Russians still have it), and assuming it’s not been meddled with when they do.  If they do stage a repeat, I am sure the team will consist of a fresh bunch of naive idealists who have been kept well away from those who went through the mill the first time.  I am pretty certain that, despite their tough-talking now, none of the original lot will be back for more.  They will have seen enough to know how unpredictable the Russians can be, and how impotent their protests back home were in the face of the charges.  I think the protests will continue with increasing frequency and volume, but they’ll not take place on Russian territory.

Macondo Compensation Funds Defrauded

Of course, nobody could have seen this coming:

BP has sued a plaintiff’s lawyer active in the compensation process for the 2010 Macondo disaster, alleging that a $2.3 billion agreement aimed at helping seafood hands affected by the oil spill contained thousands of phony claims.

The UK supermajor has accused attorney Mikal Watts of inflating estimates of damages and inventing up to half of his 40,000 clients using fake social security numbers. BP made the claims in a civil lawsuit filed on Tuesday in district court.

Watts, who is also a major political donor to Democratic candidates, stepped down from the plaintiff’s steering committee and federal agents raided his San Antonio office earlier this year as part of a federal investigation, the San Antonio Express-News reported.

Watts has filed 648 claims for individual crew members, of which 40% listed Social Security numbers belonging to another living person, while 5% belonged to a dead person. About 13% were “dummy” numbers or incomplete.

Of the claims, only eight were deemed eligible and 17 still pending, according to BP.

I seem to remember remarking at the time of the spill that the Macondo compensation funds would be beset with fraud and unlikely to end up in the hands of those who need it.

And this amused, especially the last line:

BP has long claimed it is losing its shirt over some erroneous Deepwater Horizon spill claims, but now the UK supermajor says the lawyer handling pay-outs has been caught with his pants down.

A $173,000 claim for an “adult escort service” was not only submitted, but actually approved for payment by court-appointed lawyer Patrick Juneau, it was reported recently.

The embattled oil giant said the claim was made alongside unsigned and undated documents.

Juneau hit back, however, saying: “This claim satisfied those requirements agreed upon by BP and class counsel and was paid pursuant to the settlement agreement.”

One can only wonder what other requirements were satisfied once such a large wad of cash was handed over.

Did anyone honestly think this wouldn’t happen?

Told ya!

What was I saying a couple of months back about the Greenpeace activists being held in Russia?

I doubt the Russians will inflict serious jail time on any of those being held.  My prediction is they will be subject to enough of the Russian penal system, including a few days or weeks inside a Russian prison, to deter any further such protests before being released.  Putin has already put himself in the role of benign arbiter, ready to step in if necessary to ensure no unnecessarily harsh treatment is dealt out (and making everybody aware – in case there still exist people who don’t already know – that he personally can decide your fate should you be foolish enough to try a similar stunt in future).

Uh-huh:

Russia’s president Vladimir Putin has submitted proposals to the country’s parliament for a special amnesty that reports have said would include a pardon for the so-called ‘Arctic 30’ protesters.

The Kremlin announced the draft regulations on its website, specifying categories of crime and offender that would fall under the proposed amnesty.

The bill has been submitted to mark Thursday’s 20th anniversary of the Russian constitution.

Things certainly seem to be heading in that direction.  Although:

Greenpeace spokesman Ben Ayliffe said its members “are not getting their hopes up yet”, commenting in a statement: “Until the Duma adopts an amnesty that includes the Greenpeace activists and freelance journalists, everything is speculation.”

Indeed.  Only once you’ve had the quiet word in your ear that this amnesty is a one-off and should any Greenpeace activists try a similar stunt in future the outcome will be quite different, and you have nodded your head vigorously to show you have understood this point, should you get your hopes up.  But that word will come, I am sure of it.  Let’s see what effect it has on recruitment for volunteers for future missions.  I’m sure those who will soon be released won’t have much appetite for another, much longer, stint in a Russian prison.

More on the Greenpeace Saga

So far, things seem to be playing out more or less as I expected:

Russia has dropped charges of piracy against 30 detained Greenpeace activists connected to a protest against Arctic drilling and replaced it with a lesser charge of hooliganism, the environmental group confirmed.

The charges of hooliganism carry with them a possible sentence of seven years in prison. The piracy charges came with a maximum jail sentence of 15 years.

There could be any number of reasons behind this, ranging from a genuine belief that piracy did not take place but hooliganism did, to the Russians wanting to keep Greenpeace as confused and off-balance as possible just for fun.  Who knows?

One possible explanation is that it removes a key element of hope from those enjoying the warm hospitality of a Murmansk prison: the fact that Putin said that Greenpeace’s actions did not constitute piracy.  I’m sure those imprisoned would have been clinging to this statement to some degree, and now that’s been removed from the picture entirely.  Putin said nothing about hooliganism.

As I said before, I think the Russians want to show the detainees enough of their criminal justice system to deter anyone else from trying a similar stunt in future.  In Russia, the process is the punishment (and in case anyone thinks I’m getting on my high-horse here, the UK is rapidly heading in a similar direction).

That said, I think Greenpeace need to tread very carefully at this point.  They need to recognise that Russia is probably posturing here, and has no intention of imprisoning these people for too long.  They also need to interpret the Russians dropping the piracy charges as the first step in a compromise, and I’m not sure they do.

It is fine to argue with Russian authorities, they don’t mind it too much – provided you begin by acknowledging their authority and position, and you don’t try to play hardball.  You’ve got to be ready to concede something, even if you’re 100% in the right.  When the local tax authorities find “anomalies” in your accounts and impose a nominal fine, you don’t self-righteously challenge them.  You apologise, pay up, and let them move on.  That’s how it works in Russia, in a multitude of situations.  So if I was Greenpeace, I’d be negotiating with the Russians on how we can both come away from this with both sides being able to credibly say that they made their point.  As this article notes:

The country’s Ministry of Foreign Affairs has … offered a possible olive branch to the so-called “Arctic 30” who have all been charged with piracy over an Arctic drilling protest, as it said Russia is “open to settling the situation”.

However, I’m not sure Greenpeace has got the message:

But Greenpeace is still determined to contest the current charges, which the group called just as much a “fantasy… that bear(s) no relation to reality” as the previous piracy allegations.

“The Arctic 30 are no more hooligans than they were pirates,” Vladimir Chuprov of Greenpeace Russia said in a statement. “This is still a wildly disproportionate charge… It represents nothing less than an assault on the very principle of peaceful protest.”

In other words, ignore the concession on the part of the Russians – if indeed it was a concession – and continue to stamp your foot and shout loudly.  This ain’t gonna work.  For a start, the Greenpeace protesters are in jail, whereas the Russian authorities will go home each night.  If this turns into a waiting game, Greenpeace will come off far worse.

In my experience, Russians can be a petulant lot: willing to work with you to a point, but if you put a gun to their head or offend them in some way, they can be as stubborn as hell and refuse to budge an inch on pure principle.  That is why I don’t think it’s a good idea that the Dutch government has decided to wade in on behalf of Greenpeace.  What was a dispute between regional authorities and Greenpeace has now been turned into a direct challenge of Russian national authority by a foreign power.  If there is one way to get Russians to adopt a hardline stance and start making examples of people, this is it.  It may be that Russia has downgraded the charges because they have now decided that it is no longer a charade, and they now intend to fully prosecute those involved.  They’d be unlikely to convince even themselves that this was genuine piracy, never mind the rest of the world.  But hooliganism?  That’s a different story.

For a start, the average Russian is probably struggling to get his head around the idea that forced entry onto an industrial offshore facility constitutes peaceful protest.  In a country which sees genuinely peaceful Russian protesters campaigning for Russian human rights getting the shit kicked out of them by their own security apparatus, they are unlikely to be moved to tears by the sight of middle-class foreigners being roughed-up after trying to force their way on board a drilling rig.

Indeed, I’m not sure how many in the west have much sympathy for Greenpeace in this regard.  Peaceful protest to most people means standing a little way off shouting slogans and waving banners, not clambering on board oil rigs.  I’m sure I’m not the only one who appreciates that had the people climbing on board been called Mohammed and had dark skin and beards, by now they’d be wearing orange jump suits and trying to breath through a wet hessian sack.  Wealthy middle-class lefties being denied special treatment for once is likely to invoke a degree of schadenfreude in some who would otherwise support Greenpeace’s broader aims.

And this also amused:

Masked men broke into a Greenpeace office in Russia on Thursday night, stealing a structure intended for use in a protest against Arctic drilling, the environmentalist has claimed.

The development came as a court in the northern city of Murmansk rejected bail applications for two more of the so-called “Arctic 30” who stand accused of piracy following a protest against Gazprom in the Pechora Sea last month.

CCTV footage and images released by Greenpeace on Friday claim to show six people clad in balaclavas scaling a fence outside an office in Murmansk that the group is using as it tries to free the 30 activists arrested a month ago on board its flagship vessel Arctic Sunrise.

The group has claimed that a mock cage was stolen from the premises.

So a group that specialises in entering the premises of others without permission in order to achieve their own ends finds itself being burgled?  What did they think was going to happen?  That the Russians were just going to play nice?

As I said in my previous post, I think Greenpeace have blundered badly here.  For years they’ve deployed underhand tactics and relied on their opponents respecting the Queensbury rules to avoid getting their heads knocked off, and they’ve now carried this approach into Russia.

Good luck with that!

Only in Norway

From Upstream Online:

Norway’s departed oil minister Ola Borten Moe may have been deprived of his portfolio after recent elections but apparently is still looking to milk the state cow even as the part-time farmer seeks fresh pastures.

After being given the boot, Borten Moe now finds the boot is on the other foot and is reported to have requested a Nkr300,000 ($50,700) payout – equivalent to three months’ gross salary – from the government to keep the wolves from the door while he looks for another job.

The so-called after-salary is only available to members of the administrative apparatus who are without work and he is said to be among seven former government members now seeking the extra benefit.

Now it is arguable whether he needs this allowance – he owns a heavily subsidised farm and I’m sure he could pick up a lucrative job in the private sector pretty quickly – but that’s not my point.

What I find fascinating is that only in Norway would a departing oil minister be concerned about his financial position in the absence of pending criminal embezzlement charges.  I’m sure the outgoing oil ministers from most producing nations would be more concerned with which multi-million dollar overseas property to spend the next few months in.  Even in the UK, ministers ensure they cultivate enough arse-lickers to ensure a cushy tenure in an NGO or consultancy somewhere immediately afterwards.

On the face of it, a politician’s job in Norway seems to be closer to a real job than you’d find anywhere else in the world.