Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (106229)	6/18/2005 1:28:15 PM
From: Brumar89	Read Replies (1) \| Respond to of 108807

Naomi Klein doesn't know what she is talking about: "70 percent of Nigerians still live on less than $1 a day and Shell is still making superprofits. Equatorial Guinea, which has a major oil deal with ExxonMobil, "got to keep a mere 12 percent of the oil revenues in the first year of its contract," according to a 60 Minutes report--a share so low it would have been scandalous even at the height of colonial oil pillage. " Almost all oil today in west Africa (and for that matter all third world countries, including Russia and central Asia) is produced under production sharing agreements with national oil companies, not under the leases and concessions of decades past. PSA's are very favorable for the producing govt's. It is true the foreign companies recoup their investment by taking "cost oil" upfront, so it is quite possible the foreign company may get 88% of revenues in the early years when it is getting "cost oil". But this ignores a couple things: 1) 12% of revenues is still one hell of a lot of money, more than enough to enrich a small country if that country's govt used its revenue to enrich the country's people. 2) The percentages of "profit oil" for the foreign companies once the "cost oil" is recouped are much smaller. And the more profit the projects earn, the smaller the "profit oil" tranches get. Eventually, the govt ends up owning everything with a foreign company or two running its production operations for say, 10% of the production. "This is what keeps Africa poor.." No, its the corruption of the local govts which don't use the oil wealth to benefit (most of) the country's people.