The Prize, Chapter 12 Overview

The Prize, Chapter 12 Overview

Chapter 12 is characterized by the introduction of the national oil company, and the challenges of dealing with other countries, especially those with different cultures and where unrest is imminent. As you read the sections of Chapter 12, pay particular attention to the differences between Mexico, Venezuela, Persia (Iran), and Russia. Very different places, very different situations, but similar outcomes. The outcomes being challenges and risks for the oil companies, and potential disruption of supplies. Chapter 12 is a cautionary tale of why energy independence is so important for economic and national security.

Interactions with these countries illustrate the necessary love/hate relationship between the country and the oil companies. The companies would rather not deal with the governments due to the very high risks, but they must in order to have access to the supplies. The countries would rather not deal with the private companies who they did not trust, but they also realize the companies are necessary to develop the fields and market the oil. Sitting on large fields is of no value if there is no one to develop it. The battle between government and oil companies boiled down to two issues:

1. stability of agreements for the oil companies, and
2. the question of sovereignty and ownwership for the producing countries.

And the companies realized that although they were competitors, and did not always trust each other, they had to join forces to operate in this changing, and challenging world. Recall the saying “the enemy of my enemy is my friend.”