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Interesting oil travelogue runs out of gas
on December 5, 2008
Lisa Margonelli's book Oil on the Brain is an interesting narrative about oil, starting at the pump and progressing 'upstream' towards the oilfields that produce crude oil. The first few chapters on gas station franchising, the distribution business, and refining are illustrative. The author spent some time on a rigsite in east Texas where a gas well was being drilled. Also very good. Interesting material on the NYMEX exchange and the Strategic Petroleum Reserve (SPR), although the editorializing starts in Chapter 5.
Alas, the chapters on foreign countries - Venezuela, Nigeria, Chad, Iran - are less informative. Not nearly as much factual data and intellectual rigor as in the first few chapters. More quotes from biased and limited sources, much more opinion. As a result, the book became a struggle to finish, with all the opinion. Interesting for an author who claims to know little about oil and gas at the outset, to pen such broad and sweeping conclusions and statements in the later chapters. The last chapter deals with Chinese attempts to build smaller more fuel-efficient cars. This is ironic, as the Chinese National Petroleum Company is making acquisitions of marginal oil and gas properties all over the world - desperate to gain access to oil. The author doesn't mention deepwater oil and gas production in Nigeria (almost 1/3 of the country's production comes from 4 deep water developments) or Liquefied Natural Gas (LNG).
As an alternative to this book, I recommend John Ghazvinian's Book 'Untapped-The Struggle for Africa's Oil' which features chapters on several countries in Africa that have gained prominence in recent years for their oil potential. More data, more reporting, less bias, less barely-concealed contempt for the oil and gas business. Ms. Margonelli seems not to understand that companies take on the characteristics of the countries where they operate, not the other way around. This is particularly evident in her description of Venezuelan expatriate 'racially and class-stratified' compounds near Lake Maracaibo, where Exxon's subsidiary gave instruction on how to deal with local domestic staff. One would think that providing advice is preferable to the alternative - not giving advice. After working in Nigeria, I can assure you that expatriate staff are EXPECTED to contribute to the local economy by hiring chefs, drivers, stewards and maids. Furthermore, the status-conscious nature of the country is reflected in the detailed perks that accrue to various job grades such as make/model of company car. The majority shareholder in the Shell-operated onshore developments in Nigeria is ... the Nigerian National Petroleum Company NNPC (Shell 30%, Total 10%, AGIP 5%, NNPC 55%).
I can only assume that Ms. Margonelli's attitude towards oil and gas came through in her unsuccessful requests to speak with industry representatives (at least Ghazvinian got into Shell's office to talk to their CEO of African operations), leading her to rely overly on detractors. So to summarize, the first half of the book was interesting and informative. I got the sense I was learning with the author. The second half of the book was less satisfying, the author was looking to confirm preconceived opinions by interviewing a skewed sampling of opinion, and introduced too much personal opinion.
Disclosure - I am a production geologist with a major oil company who has worked overseas in Holland, Oman and Nigeria.