American Abroad

BP faces icy reception in Brazil

As 60,000 barrels of oil continue to spew into the Gulf of Mexico per day, BP is likely to face a cold reception across the Atlantic as it looks to gain access to Brazil’s prized pre-salt oil reserves.

Only a month before the Deepwater Horizon well explosion, BP’s prospects were promising. The British oil giant had managed to secure a deal with Devon Energy to acquire 10 exploration blocks in the ‘pre-salt’ basin – so called because the oil fields are buried beneath 2,000 metres of water, and a further 5,000 metres of rock, salt and sand below the seabed.

That was in March. Since the signed agreement, BP has faced the biggest PR nightmare imaginable for an oil company, with the media, environmentalists and the entire US population blaming the British operator for one of the world’s greatest oil spills.

Brazil may not have as much venom for BP as the US, but there is no doubt that the government, environmental agencies and oil and gas regulator, the ANP, will look at BP’s plans to set up shop in Brazil with new eyes. And much greater caution.

The ANP, which is tasked with approving new operators in the country, has said that it will review the BP Devon deal with the BP spill in mind. Even if the regulator wants to give BP the green light, it cannot ignore the huge political pressure to reconsider, and politicians are expected to call on the ANP to explain its decision – prolonging what is already likely to be a lengthy process.

But Brazilian lawyers say that the oil regulator – certain to evaluate the operational capabilities of the troubled company with a fine-tooth comb – should not expect to go beyond its remit without facing possible legal repercussions. That is to say, if the ANP rejects BP for being unable to meet its financial requirements for drilling in Brazil, it could face a court battle.

This comes after the regulator was reported to have been concerned with BP’s finances due to billions of dollars lost to the spill fallout. However, the ANP head, Haraldo Lima has since denied that this is a consideration in its investigation.

Whatever its decision, the ANP is facing a tough battle – as the BP accident must be weighed in consideration of the huge challenges already facing operators in the pre-salt. The reserves are much further from shore than the Gulf, and nearly twice as deep, making drilling much more difficult.

But for many international oil companies, the rewards far outweigh the costs. The pre-salt, discovered in 2007, is believed to contain up to 50 billion barrels of oil. And with the Gulf effectively out of commission, the value of having access to Brazil’s oil goldmine has just gotten bigger.

BP was one of the lucky ones to have gotten in before the government looks to place a cap of its own on foreign-run oil projects, as Brazilian President Luiz Inácio Lula da Silva plans to reform the current concession regime and replace it with power-sharing agreements – expected to give the government greater control over oil rights in the pre-salt region.

Of course, much has changed since the British company first made inroads into Brazil, and BP’s luck has most certainly run out.

Why the market is loving Brazil’s elections

Economically-thriving Brazil is the modern success story – and one that few people could take fault with. While not as right-wing as its neighbors in Chile and Colombia, it doesn’t raise the blood pressure of Washington like the firebrand Venezuela. It is the paradigm of centrist politics, and the main candidates in Brazil’s upcoming elections appear to be cut from the same cloth.

As the Guardian commentator Conor Foley writes, “it would be difficult to squeeze a credit card between the politics of Serra and his opponent Dilma Rousseff.”

The former São Paulo governor, conservative candidate José Serra promises to do more for business in Brazil than his rival Rousseff. But the Brazilian Social Democratic party (PSDB) leader – once a Marxist in his youth fighting against the Brazilian dictatorship – is not planning on doing much differently than his counterpart on the ‘left’. Both candidates promote a middle-ground between state capitalism and neoliberalism, and neither plan to alter the legislative landscape of Brazil’s economy with any real substantive reforms.

International markets, of course, are having a field day. Few elections are so predictable, stable, and guaranteed to keep the herd in toe, no matter the outcome.

The only area where there is any (industry) cause for concern is perhaps the oil sector. In August last year president Luiz Inácio “Lula” da Silva proposed a reform of the country’s current Oil Law for its deepwater reserves, replacing the concession regime – which awards leases to international oil companies granting them rights over oil production – with power-sharing agreements (PSA) that would put the government in control of the reservoir. Under the proposed PSA regime, state-owned oil giant Petrobras will become the sole operator in the pre-salt basin, and will be granted a minimum 30 per cent participation in the remaining un-leased blocks. The pre-salt region, which is believed to hold 50 billion barrels of oil, is lauded as a goldmine for future drilling – and up to 72 per cent of the exploration blocks have yet to be leased.

The legislation was delayed in Congress last week, and is due to be voted on after the presidential elections. If Serra wins, he will scrap the PSA proposal. If Rousseff wins, the former energy minister under Lula’s administration will most certainly push ahead with the bill. The reform is seen as a major blow to international oil companies, and has given them a stake in the election result.

But the oil companies would rather see the PSA regime come into effect quickly than continue to wait for new bidding rounds – as the government will not allow auctions to take place until the reform bill is decided. Even if Rousseff wins, the legislation is likely to be approved swiftly and allow bidding rounds to re-start, which is wholly welcomed by investors.

Rousseff and Serra also share another characteristic which makes them investor-friendly:  if their election campaigning is anything to go by, they are uncharismatic, deeply boring, public speakers. And their rhetoric is unlikely to move markets.

Not on Santos’ list

The successor to Colombia’s right-wing president Alvaro Uribe, former defense minister Juan Manuel Santos, has won the presidential race by a landslide. But while Colombians can count on another four years of ‘security’ in the war against the leftist FARC guerilla group, what will this mean for the country’s growing displaced?

Colombia’s refuge crisis has been largely overlooked on the campaign trail; the issue was only mentioned once out of more than six televised presidential debates.

This lack of coverage is shocking when you consider that up to 3.3 million Colombians have been forced from their homes in the last 30 years, putting Colombia only second to Sudan in its number of internally displaced people (IDP).

Human rights activists say that the problem of Colombia’s displaced is the lack of visibility. In Bogotá, a city of eight million, most refuge families live in the hilltop slums where they are barricaded from their wealthier northern neighbours, and rarely interact with one another.

“In Colombia, there are no huge refugee camps like in Sudan. Here displacement is very invisible,” a Colombia researcher at Amnesty International, Marcelo Pollack, was quoted as saying in the Reuters Alertnet bulletin.

Meanwhile, as refugees pack into the urban shanty towns, a new rural exodus has also begun.

Under Uribe, the military has stepped up its offensive in FARC strongholds in the jungle provinces near Colombia’s border with Ecuador, and the communities living there – mostly comprised of Afro-Colombian and indigenous groups – are often caught in the crossfire.

A whopping 300,000 people were added to the displaced list in 2008, up from 230,000 four years earlier, according to government data.

“The dynamics of the conflict have changed,” says Pollack. “It has dispersed away from the urban cities to the peripheries were many Afro-Colombians and indigenous groups live, making them more vulnerable and increasingly hard hit.”

The fall in kidnapping and murder rates as a result of Colombia’s tough security policy has given former president Uribe unprecedented popularity at home (around 60 per cent approval ratings), and Santos is expected to carry the mantle, winning nearly 70 per cent of the vote. But the wealth gap and human rights have taken a backseat in the domestic political arena as a result.

The annual budget for displaced persons has increased more than five-fold in the last decade, but human rights groups say that this has not significantly improved the lives of refugees.

Nearly half of Colombia’s population of 45 million lives in poverty. A displaced family of five typically lives in abject poverty, surviving on less than US$10 a day.

The Colombian constitutional court has ruled that the government has failed to fulfill its legal obligations to provide housing, job opportunities and training for displaced families.

On 7 August, Colombia’s new president, a devoted conservative with a background in economics, is due to take the reins. But it is unlikely that Colombia’s invisible people will make an appearance on Santos’s priority list.

Addiction 2.0

I wake up and it’s the first thing I do after lurching myself away from the warmth of my pillow. I go to work and continue using it for eight hours until the end of the day. Hop on my bike, head home, and back again to gorge on news sites, Facebook, emails and blogging. The signs are all there, the level of usage is staggering. Have I become a webaholic?

Losing my laptop for a month while it was being repaired in April nearly drove me over the edge, and has left me wondering whether modern technology is becoming a modern addiction.

In the US, computer users at work change windows or check e-mail or other programs nearly 37 times an hour, while at home people consume 12 hours of media a day compared to five hours in 1960, according to researchers at the University of California.

The launch of mobile devices connected to the web, the growth of social media networks and the 24 hour news cycle has catapulted us into an era where the internet is no longer a recreational or work-time activity – it is an appendage.

We are pumped information through a Google feed and bombarded by Apple Apps that make real life extraneous. Why sit by a pond when you can listen to the ripples bounce off your finger on the iphone’s virtual Koi Pond? Or meet someone by chance when the StreetSpark app can find your soul mate for you?

Of course many of these services are too gimmicky to have a lasting impact on society (one hopes!), but there are some worrying real-time affects caused by internet overload.

Scientists have found that the deluge of information can change how people think and behave; our ability to focus is undermined by rapid bursts of information.

“These play to a primitive impulse to respond to immediate opportunities and threats. The stimulation provokes excitement — a dopamine squirt — that researchers say can be addictive. In its absence, people feel bored,” explains Matt Richtel in the New York Times.

This makes it difficult to concentrate and process information coherently – a symptom that I am all too familiar with, having not read a full book in months and unable to focus on writing without a Facebook break every five minutes. And then there is the stress. That ‘addictive dopamine squirt’ can also make it difficult to unwind after a long day. The internet has made us all multi-taskers, and we are great for keeping the balls juggled, but there doesn’t seem to be an off switch.

According to health experts, this can make it difficult to shut out irrelevant information and lead to fractured thinking. (Ahem, time for a quick Facebook check…)

So the answer is yes, I am addicted to my computer and it is decidedly not good for me to spend my waking life on the internet. I wonder if there is an app for kicking the habit…

the Bilderberg what?

If the world’s top business leaders and politicians meet in a forest, and no one is around to hear what they say…

Then we’re all pretty screwed. Or at least, that is the opinion of Charlie Skelton, one of the few journalists that even know what Bilderberg is (I confess, I too was in the dark).

“I’ve spoken to countless news agencies and outlets in the last few weeks, and the most common response, from journalists, editors and commissioners, is: ‘I’m sorry, the Bilderberg what?’”, writes Skelton in the Guardian. “Seriously, if you work on the foreign desk of a major news corporation and you’re at the “Bilderberg what?” level of political awareness, you need to think about getting a different job. Get with the programme. Shimmy up a pine tree. Take a leaflet. Resign. You’re not helping anyone.”

Bilderberg is the annual meeting of the world’s top CEOs, politicians, heads of international financial organizations and media moguls – but the level of secrecy surrounding the event has kept it largely unknown to the public for years. You might be reading the aforementioned sentence and think, “wait a minute, she did mention media moguls, right?” Evidently, they have a vested interest in keeping the story off the news agenda too.

Of course, this hasn’t stopped Bilderberg from slowly seeping out to democracy activists and protestors, those pesky types who think that the world’s movers and shakers should let us know where we’re going (no, its not Disney Land) and just maybe, give us a say.

As more people have become aware of Bilderberg, the media blackout on the conference is gradually evaporating. This week, the summit is going on in Sitges, and Al Jazeera, The Times, the Today Programme and Russia Today are among the media agencies already on the scene.

There is still the heavy handed police deleting camera footage from protesters, and delegates entering the hotel through underground entrances to avoid being spotted, but it may only be a matter of time before the brains behind Bilderberg concoct a better PR strategy.

It does not take a rocket scientist to work out that shrouding a high-level summit in secrecy is the best way to get people interested. Sometimes the best kept secrets are hidden in broad view. Britain has perfected this strategy swimmingly.

Only in the UK could a cross-examination of the key decision-makers behind the most controversial war in the country’s history evoke not so much as a whimper from the British public. And the Iraq Inquiry was filmed live, I repeat, FILMED everyday of the hearing. Anyone could tune in and watch Sir John Chilcot politely inquire about Mr. Blair’s thoughts on the war – most gave up after 10 minutes to do something more stimulating, like paint their nails or brush up on 9th grade Algebra.

What’s clear is that the veil of secrecy may be lifting, but the veil of ignorance on Bilderberg is still very much intact. As one reader commented on Skelton’s post, “Why should I care if a bunch of businessmen meet for a conference?”

The question is akin to asking why anyone should care about the contents of the FBI’s top secret files. It could be a very elaborate strategy to beat Sudoku. But if the small elite who run the world feel the need to keep it hidden, damned if I wouldn’t want to know about it!