ConocoPhillips and the bankruptcy of our left-politics

Sultan Mohammed Zakaria

Sultan Mohammed Zakaria

On June 16, 2011, the government of Bangladesh signed a production-sharing contract (PSC) with the US oil & gas company ConocoPhillips for the oil and gas exploration from two deep-sea blocks – DS-08-10 and DS-08-11 covering an area of 5,158 sq. kilometres. The company won the blocks at an off-shore block bidding floated by Petrobangla in 2008. In August 2009, the cabinet committee approved signing of a PSC on condition that oil and gas exploration will be restricted to undisputed areas. Government termed it as a milestone for the energy security of the nation while a few leftist organizations and persons appraise it otherwise. In particular, National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports has vehemently opposed the contract and termed it is as a violation of national interest and a threat to national security. They voiced that the country has been handed over to United States (one cannot ascertain how!), and the sovereignty is no longer exist (how cheap our sovereignty is!). Several other leftist political and social organisations also strongly protested the contract.

Everybody is aware of the crises we are in, especially on the energy front—the lifeline of the economy. It is hard to believe that for the last one decade or so, given the fastest growing nature of an economy like us, Bangladesh did not go for a single exploration despite having the potentials.

I am not going into the details or nitty-gritty of the contract as it is quite technical and the contract has not yet been made public. But as we understand from the statements from the concerned government ministry and high officials and independent (not Marxist) energy experts that the contract is okay and it satisfies the international standard. However, there is no let up in leftists’ speculations, and sometimes they are deploying many logics which do not exist in the contract. I have experienced a recent debate between Anu Muhammad, the leader of National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports and the Energy Secretary of the Government of Bangladesh organized by the ATN News, the private satellite TV channel. I could not resist myself to share with the reader which I believe would help dispel many speculations and misconceptions. On the royalty issue which Anu Muhammad and his team argues that Bangladesh will get only 20% which was dismissed by the Energy Secretary who rather told that BD will get 45% share in the cost-recovery phase and the share will naturally increase once cost has been recovered. Then the share will go up-to 80%, he gave reference to Bibiana Gas field that Bangladesh is now receiving nearly 75% of the explored gas as its own share and the rest it is buying. However, It will get 20% only in the case where Bangladesh will decline to buy the explored gas and Conoco will have to export it for its cost-recovery etc and only in the form of LNG for which it has to invest almost USD 3 billions for an LNG plant at on-shore. The secretary has stressed that nothing such will happen in near future as Bangladesh itself needs huge energy for the coming years and there is no situation will arise in the foreseeable future that Bangladesh may decline to buy natural gas from Conoco. The Secretary said that the provision of LNG gas export is the furthest possibility and very very hypothetical.  Besides, on export clause in the contract, the secretary responded to Anu Muhammad’s claim that every PSC signed by Bangladesh government up until today since 1971 had the same provision that the company can only export the gas if all other alternatives are exhausted. It is also evident that all PSCs signed around the world have the similar clause as it comes as a standard practice. If, in any case, Petrobangla declines to buy the gas, the company will have to explore domestic market—which is domestic private sector to sell their share. But above all, it is the government from which the company has to receive clearance and if the government doesn’t allow them, they can’t export it. Another issue where Anu Muhammad argued that Bangladesh govt. has to build the pipeline to bring the gas to on-shore which too the Secretary denied and said that the contractor will have to build this pipeline by its own, however, the cost will be adjusted. Anu Muhammad was then arguing that the government has intentionally paralysed the Bapex to award contract to foreign companies. Nevertheless, the Secretary shared his experience that the exploration assignments Bapex is being engaged now is unprecedented and explained how the current government has given the highest priority to equip Bapex more than any other regime in our history. Another point of discord was the technical capacity of off-shore exploration of Bangladesh, the process and time needed for capacity building, the urgency of energy and whether we can wait for our capacity building and then to go off-shore. The Secretary gave rational that we are now in an urgent situation and there is no time to spare now but to go for exploration. The economy, industrialization, and electrification everything is in a dire condition now and if we do not go for immediate exploration, the situation will only turn worse. The Secretary however agreed that Govt. has to build capacity of Bapex and they are working on that.

The whole debate could be an eye-opener, because the Secretary is the highest official responsible to clarify the government’s position and the programme was on air. But unfortunately while Anu Muhammad has been defeated in almost every arguments and points he raised, his dogmatism about the contract remains vivid. This shows the bankruptcy of our leftist politicians.

It was no wonder that soon after signing the contract they raised their trade-mark allegation that the country has been sold, sovereignty has gone, imperialists have taken our everything etcetera etcetera. The people are so used to these words and phrases that that added nothing to their political humors! Rather after being mired into the energy crisis for over the decades, most people welcomed the initiative. They believe that they need solution on the ground, not a solution which does not exist anywhere.

I have long been used to a concept that Marxism has a lot more to do with economics and Marxist politics is basically based on and emanates from political economic theories. But to our utter surprise the way our Marxists behave does not even relate to basic economic theories. In our oil and gas exploration sector, their prime point of argument of this Marxist fellow is that this is our resource; this is the resources of the people, why should we give share of our resource to foreign companies? Rather, as they put, we have to build our own capacity to extract our minerals by ourselves, especially in these off-shore blocs. Well, sounds great. But does this give you any hint of reality? I am wondering how these Marxists fellow treat the ‘paper currency’ and whether they consider it as a resource too. I know many of you will do, of course you do. Now tell me, Bangladesh is paying billions of dollars to foreign companies for importing goods and services, machineries etc; we have to import almost USD 17 billions every year from other countries, should we do that? From these Marxists’ point of view, we should not remit our billions of dollars (these currencies are also tangible property) to foreign countries, because these dollars is our resources, they are the resources of people! Instead, they should say that we have to build our own aero-plane, capital machineries, software.. everything, we have to produce oils, onions every other commodities we import. Shouldn’t we? Come on, we have to pay our resources for this and the same logic applies here. If we follow their arguments, you have to build your capacity in every sector (because otherwise your national resources will be remitted in some form). If you want to drill for gas, you have to build your capacity of Bapex, then you have to build your own nationalised aero-plane industry first before you should fly, you should produce all of your commodities before being habituated to consume them! Because, all these cost money, the resources of yours, why should you give it to Chinese, Indians, Gernmans, United States? At the same time if United States deploys the same logic, they will stop buying your RMGs because it is costing their 5-6 billion dollars, their public money!  Does this sound great?

What I have to treat the expertise of the ConocoPhillips is that it is its product to sell and we have our product which is minerals. Now we are just trading off these products through offering a share of our minerals to exploit the remaining. We are buying their expertise in exchange of our tangible property—either gas or oil. We are just hiring the expertise of the company which we don’t have and we cannot exercise a lot of variation to international standard contracts, doing so would unable us to find a contractor. If you do not want to trade, they won’t buy it! It is simple trade-economics. If we have the same expertise of drilling, we can bid for the exploration in the Gulf of Mexico, United States as the British Petroleum is doing! And I can tell you that our PSC with Conoco is better than the one US government has with the BP. But no one there claimed that the government of the United States sold their sovereignty to British government! It is economics of capitalism (not Marixism). The country will calculate its own cost-benefits, every other country, except nationalist economies—a rare one or two, would do so. So, what is the Anu Muhammad’s point here?

Do these leftist fellows have bankruptcy of ideas?

What Anu Muhammad and his associates are saying now is its own political ideology and belief that major institutions of a state should be nationalised. I don’t see any problems for pursuing such political ideology. But I see the problem when you are pleading to implement your own political ideology to someone who doesn’t believe in yours and has its own one. We all know that Awami League, the ruling party, is not a communist party and believe in market-based economy (capitalism). Therefore, they will formulate policies, pursue agendas which go in line with their own political reality. They are not supposed to implement Marxists’ agenda. The politics is wide open and this Marxist Anu Muhammad and his team should pursue a political entity, as they are doing so, and seek popular votes to form a government to implement their ideologies. Anyone resisted them of doing so? No. But the fact is people do not trust them ever. They have not voted to power ever. Have they learnt any lesson why so?

I see the crisis of today’s left politics is cynicism rather. They mistrust everyone, everything said or done. They found every people not chorusing their voices as an agent of imperialist power. They treat every action does not satisfy their ideology as an agenda of imperialist forces. You can hardly hear them appreciating a people, or a thing. You will frequently hear that Dr Yunus is an agent, Dr Kamal Hossain is an agent, Sheikh Hasina Wajed, Begum Khaleda Zia, HM Ershad… every other political figure is an agent of foreign masters to these leftists. This vicious cycle of negativism made their progress almost impossible. This is quite natural that when you mistrust every other people other than you, than everyone will treat you in the same manner. Left politics has to come out of this frustrations and it is imperative for their survival.

 


11 Responses to “ConocoPhillips and the bankruptcy of our left-politics”

  1. tarikur

    I agree. Bangladesh needs energy badly, so Bangladesh can grow. Millions of people are starving currently in Bangladesh and one of the main reason why millions of people are starving is because Bangladesh does not have enough energy.

    My advise is if you can not come up with a plan to increase Bangladesh’s energy, you can not criticize. All energy solution say nuclear, solar energy has positives and negatives. The point is Bangladesh needs energy.

  2. Fareed

    The government did the right thing by signing the PSC. This government had learned through trials and errors of the past. The AL government had also worked on PSCs during its first term in office in 1997.

    Do we have the expertise, technological know-how and resources to build oil and gas explorations rigs in the Bay of Bengal? The answer is a big “NO”.

    Bangabandhu’s visionary decision to explore the Bay soon after independence was a milestone for Bangladesh’s quest for gas and oil to meet its ever increasing demand beyond any government’s means to meet it.

    During Zia’s rule we have seen plunder of the sector by ministers and secretaries. The tradition continued under his wife.

    This is the first time any government in Bangladesh has tried to develop the sector in unison with the vibrant growth Asia is likely to see in the next decade. People like Mr. Anu Muhammad instead should focus on how they can help the government cut down our birth rate by emphasizing the need of strict family planning guidelines.

  3. fugstar

    Gas comes out of the soil in the south, especially on the islands when they try to sink tubewells for water. people are reported to pipe it around quite dangerously but freely. good luck to them. they bypass big technology corruption.

    Does desh had the capactity to figure out low cost and safe solutions to this YES!

    Govt should communicate and dialogue more with the people on this matter, not label them spys and dalals. I think the government lacks imagination wrt the energy crisis and over promised at election time.

    For the people i hope this govt can deliver energy with justice.

    Nurturing technological capacity is a political process and takes time.

    so why not get petrobras or petronas?

    conocophilips is the american option. not ideal nor particularly competant.

  4. Sami

    I quite disagree with the writer. May be he doesn’t know what he is talking about.

    Don’t be fool by their words, these wherever they go they suck blood!!! And u will see how they change their color after a few years. This same people will say –we dont have the technologies to carry it onshore and eventually it will be exported!!!

  5. adnan

    “I am not going into the details or nitty-gritty of the contract as it is quite technical and the contract has not yet been made public.”…..
    Mr. Zakaria dose not want to get into the detail. why ? because it is “not yet been made public”.. Why ??… Mr. Zakaria judged Prof. Anu Muhammad by a talk show(!) he did not even dared to answer according to the points raised by the National Committee, because “it is quite tecnical”… so Mr. Zakaria actually its your words which appears to us “BLAH BLAH BLAH”

  6. Ritu

    One problem with this writing is the assumption that only the Marxists or the leftists are involved in this movement. Millions of people would have joined this movement only if they knew that this movement is to protect our resources. Accusing leftists has become a fashion for a group of people blinded by the easy opportunities offered by big companies. Please brothers, open your eyes. Have trust in your ability, say “I can”. Only then you will be able to free yourself from the slavery. Do not waste time. Read, read, and read and before letting multinationals explore your gas, you better explore yourself. You do not need to read Marx to do that.

  7. Sultan Mohammed Zakaria

    Mr Adnan, I had to judge Mr Anu Muhmmad by that talk show because only there I found someone responsible for the deal (the Energy Secretary) was present to defend Anu Muhammad’s presumptions and speculations. What Anu Muhammad and his team is trying to argue is the same rhetoric you are trying to deploy which is still vague and doesn’t satisfy many like us. We judge the event objectively – if you come with satisfactory point, we are certainly going to buy it. Rhetoric based on you or Anu Muhmmad’s political ideology that it is only the State which should do this and that will not lure many.

    Im just wondering whether you can answer me the following points, then we can argue:

    1. Are the contents of the current PSC bad from any of the previous PSCs signed since 1972? If yes, in which point?
    2. Doesn’t all previous PSCs has the option of LNG export?
    3. What is the standard practice for PSCs globally regarding the export and royalty option? Have we seen a deviation from standard practices? In which point and how much?

    Thank you.

  8. Sultan Mohammed Zakaria

    @Ritu: Thank you for your sermon that I should read. But why can’t you read my piece at least before put your comment? You people drastically need to change your perspective and look thing rather objectively. Pin point your discussion and I will carry through it then. The points I need to know from you are the same ones stated above in reply to Mr Adnan’s comment. In addition, tell me why should USA hire BP (of Britain) or Shell (of Netherlands) for its own off-shore mineral exploration? Doesn’t it have the capacity? Or there is something relates to the natural functioning of market economy? You are talking in such a fashion that a country shouldn’t invite any multinational companies for any sector since they are profit mongers. Certainly they go for profits and please tell me why should we invite GrameenPhone, Banglalink, Airtel sort of things for our telecom sector? Why can’t you wait to build your own nationalised telecom industries to reach out to 40 million people they are serving now? Doesn’t it cost money? Yes, it does. These companies are profiting billions of dollars and remitting these dollars to their respective countries. How should you explain it? Why don’t you treat this money being waste? Don’t they resources?? Your dogmatism about foreign companies and their investment is just so appalling that the reason people say you live in utopia is near to be justified. If you just try to focus your opposition to some points (i.e. royalty, LNG export etc.), then at least some room for discussion would arise. But if you talk like this rubbish that opposes engaging foreign companies and doing everything by national companies will take you nowhere…

    Thank you.

  9. Khondkar A saleque

    Please read the current issue of Energy & Power [www.ep-bd.com]for detail analysis of PSc with Conoco Philips. People must not create gossip without knowing about the matter in details. There is nothing detrimental to national interest in the contract.

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