Petroleum companies are unique creatures. They are the ogres of the murky swamp of geopolitics and its economics. This may be so because they wield enormous political influence, holding ugly sway over the policy levers of many sovereigns and affecting to a significant degree the outcomes of electoral processes of prominent democracies.
With sleight of hand, they influence powerful governments to start wars and invade other countries, just so they can have a stranglehold over the oil resources of others. That’s a lot of power. So much so that they have evolved from being the purveyors of influence to becoming the dreaded spectre of the dictatorship by the unelected.
While South Africa is distracted by the gloss of deceit, especially on the reasons why the refineries are closing down, the oil companies themselves are pulling out from onshore operations of the entire continent, which belies the façade that South Africa’s policy environment is plagued by uncertainty and discontinuity.
The oil companies to our collective consternation and dismay had resolved to exit the continent a long time ago for reasons that have got nothing to do with South Africa, generally or specifically. And their parent company resolutions going as far back as 2010 would attest to their currently unfolding stratagems of going upstream, and preferably offshore.
Arguably, there are less people in the vast waters of the ocean who would be complaining about environmental deprivations. More so, they are facing growing scrutiny from their home regulators and a restless public demanding full accountability.
All they needed was an excuse. It is not too difficult to imagine that if Minister Gwede Mantashe caved in to the extortion of the oil companies to be given R40 billion or else, they would have stayed. South Africa would not be such a bad country after all, plagued by policy uncertainty. “Give us money or else…” They boldly sought to bend the will of poor people and the resolve of a broke government. Mantashe demurred, pleading poverty.
Having found a perfect excuse, the multinationals stormed out in feigned disgust of the Broad-Based Black Economic Empowerment (B-BBEE) laws. The regulators are not bemused and the valuers of shares – at least the professional ones – are uncharacteristically silent in contemplation of their next political move.
To the extent that the dispute with Thebe Investment Corporation has found its way to social media for adjudication, they knew that in that universe, they leverage a perverse advantage over officialdom or B-BBEE for matter. There they are assured that the vast hordes of the undiscerning who roam the social media platforms waiting for the next whiff of discord would represent perfect echo chambers to spread this carefully scripted narrative.
They had always known that in a democracy of the majority, they have won the battle of the narratives that on one side of the prism, government represents the corrupt, the incompetent, and generally Lucifer’s other children.
And the private sector in this narrative, represents angels seeking no more than the altruistic desire to invest. The things we are meant to believe are horrifyingly unbelievable. And for their part, the chattering classes on social media have got no middle ground. In this universe, there are only two sides. By a great margin of preponderance, they have chosen theirs. And it is not the side of Thebe.
Isn’t Glencore a Swiss-based conglomerate that bought the shares of the Astron refinery formerly known as Chevref, and Caltex’s/Chevron’s downstream assets? Why is their investment any less significant than those departing?
Besides, if the Thebe dispute affects Shell only, why are Total and BP rushing out of the door in a huff, especially because they have no part in this valuation kerfuffle? To be sure, Thebe was never a partner of Engen. And so why did Engen leave?
There are lots of experts showing up on national television lecturing us in technicolour why the acquisition of Sapref assets by the Central Energy Fund Group for a rand is uninformed, unimaginably stupid and unpardonable.
They may be right in some assertions they make, especially if they have no access to the reasoning that led to this decision. The persuasions of these experts however, represent a strained bifurcation of logic.
In this hypothesis, the government is permanently wrong and unwise. Yet, the body politic of said experts is somehow always right. This would teach the government a very practical lesson. As repositories of volumes of verifiable information, they would have to learn to speak for themselves correctly and consistently.
In Saudi Arabia, Aramco, their national oil company is guaranteed 60% of any oil found in any part of their sovereignty. Oil companies and their investment capital have been flocking to the Kingdom ever since. And this practice is the same in other Opec member countries.
When the Department of Minerals and Energy presented the Upstream Petroleum Resources Development Bill for assent in the Assembly of the people, all the experts volubly evangelised that this would drive investment capital away. For indeed, they were at pains to reassure South Africans that their hydrocarbon resources are far more valuable than Saudi’s. And therefore, they ought to be content with far less, 20% to be exact, instead of 60% like the rest of civilised oil provinces. This illogicality boggles the mind.
During this time, the select committees were dutifully assisted by experts and lobbyists who had bivouacked outside the hallowed chambers of the people busy briefing the fourth estate. Working together with some lawmakers, they defeated the department by forcing them to revise their aspirations downwards, thereby frustrating the sovereignty of all the people and victoriously prevailed over the resolve of a financially broke government. It is not even wise to raise the subject anymore. For we have been bullied to silence ever since.
In the case of so many South Africans, the celebrations will be more pronounced when their power to deceive loses its potency.
Ambassador Bheki Gila is a barrister-at-law
BUSINESS REPORT