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Oil, money and greed

PETROLEUM ECONOMIST

A new book tells the story of the oil industry’s boom-bust cycle through the personalities of its main protagonists. It isn’t always a flattering portrait, writes Derek Brower

The book is especially strong on such juicy details, not least when it describes the machinations – rivalries, personality clashes and egos at work – during the mega-merger period of the late 1990s. Browne’s successor, Tony Hayward, is seen entertaining Gazprom boss Alexei Miller at a Chelsea football match in London. Shell’s former chief, Jeroen van der Veer, argues in German, without interpreters, with Russia’s then president Vladimir Putin about the Sakhalin Energy project at a private function in Holland. And so on.

The majors also have personalities. Exxon, a participant in the mega-mergers when it bought Mobil, is the brooding presence throughout. Shell was repeatedly bruised by run-ins with environmentalists and activists, and its bi-national schizophrenia left it flatfooted as Browne and BP seized the agenda.

Shell also handled its Russian investments badly, unintentionally antagonising the authorities, with humiliation on Sakhalin island the result. The Anglo-Dutch firm emerges from the narrative as a sluggish behemoth, crippled by internal rivalries between the Hague and London, undermined by its own constitution and eventually brought low by the reserves scandal. Phil Watts, the chairman at the time, who was eventually exonerated from wrong-doing in the affair, receives relatively sympathetic treatment in the book. Shell did wrong, acknowledges Bower, but other majors were booking reserves in a similar way and escaped censure or lobbied their way out of it.

But it’s not a book that leaves the reader feeling positive about the characters who dominate the world’s most important industry. “Oil men can play to any rules they are asked to play,” Bower quotes former Shell chairman John Jennings. “Oil breeds arrogance because it’s so powerful.”

THE ABOVE ARE EXTRACTS FROM DEREK BROWER’S REVIEW: FULL REVIEW

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