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ExxonMobil – The Worst Corporation in the World?

ExxonMobil is the world’s largest oil and gas corporation – its main ‘business lines’ involve producing a range of fuels for cars, planes and ships, as well the technologies surrounding the extraction and refining of these fuels.

Exxon Mobil.jpg

ExxonMobil: Key Facts and Stats

  • Registered in Texas, USA.
  • Assets (2016) – $330 billion
  • Revenue (2016) – $218 billion
  • 75 000 employees globally
  • The CEO from 2006 to 2016 was Rex Tillerson, until Donald Trump appointed him as the 69th Secretary of State, a position he formally took up in February 2017. Tillerson has a relatively modest Total Net Wealth of $245 million (although I simply CANNOT believe that’s an accurate figure.)
Oil and Money
Rex Tillerson: Putting Oil and Money First?

Criticisms of ExxonMobil

This video outlines a fairly basic criticism of Exxon’s dealings with the ruling family of Equatorial Guinea – which is the richest country in Africa in terms of GDP, but not in terms of social development, because although Exxon pump a lot of oil out of the country, pretty much all of the money from that oil revenue gets pumped into the hands of the ruling family. They’re so rich, that the Vice President (the president’s son) owns a $30 million dollar mansion in Malibu.

I posted about Equatorial Guinnea a while back – this post covers some of the figures surrounding oil extraction.

Teodorin Obiang
Teodorin Obiang – Total Net Wealth of $115 million

NB – Obiang is going on trial in Europe to investigate the obvious corruption that has led to his vast wealth, thanks to the French courts, no thanks to the TNC Exxon.

A second criticism of Exxon is that it could have effectively prevented climate change: its own internal memos show that the company proved the link between burning fossil fuels and global warming in the late 1970s, but then buried the research and instead funded climate change sceptics to spread doubt about man-made climate change, and cynically invested in areas such as the arctic which it thought global warming would open up for further oil extraction.

According to this Guardian article, Bill Mckibben argues that if only Exxon had been honest, we could have taken much early steps to avert global warming.

Further Sources of criticisms of Exxon…

http://www.cracked.com/article_24303_5-leaked-memos-that-prove-famous-companies-are-evil-as-hell.html

Related Posts/ how to use this material

The most obvious use of the above information is to use it to evaluate the role of Transnational Corporations in Development, summaries of which are provided here:

 

 

 

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Equatorial Guinea – High Income but Low Human Development (2017)

equatorial-guineaSince the 1990s, Equatorial Guinea has become one of the largest oil producing countries in Sub-Saharan Africa, and it is now the richest country per capita in Africa. It ranks 43rd in the world for gross domestic product per capita.

However,  the oil revenue is distributed very unequally and most people see no benefit from the high GDP. the country ranks 144th on the UN’s 2014 Human Development Index.

What this means is that Equatorial Guinea fails to convert a relatively high income into high life expectancy and formal education for its people.

 

hdi-eq
Equatorial Guinea – High GNI per Capita, Low Human Development (1)

 

Equatorial Guinea – Why High Income but Low Human Development?

For starters – Equatorial Guinea has been ‘blessed’ with a natural supply of oil and gas.

Most of the country’s income comes from oil and gas exports, as the export tree-map below shows (2012 figures)

Equatorial_Guinea_Export_Treemap.jpg

However, the income doesn’t trickle down because of an autocratic government which controls the oil industry and uses the revenue to enrich itself and keep itself in power. 

The current president of Equatorial Guinea is Teodoro Obiang, he has been quite literally running the country for three decades. He has extensive powers, including naming and dismissing members of the cabinet, making laws by decree,  negotiating and ratifying treaties and serving as commander in chief of the armed forces.The anti-corruption lobby Transparency International describes Obiang as one of the world’s “most kleptocratic” living autocrats and has put Equatorial Guinea in the top 12 of its list of most corrupt states.

The advocacy group Global Witness has been lobbying the United States to act against Obiang’s son, Teodorin, who is vice-president and a government minister. It says there is credible evidence that he spent millions buying a Malibu mansion and private jet using corruptly acquired funds.

During the three decades of his rule, Obiang has shown little tolerance for opposition. While the country is nominally a democracy, elections have generally been considered a sham. According to Human Rights Watch, the dictatorship of President Obiang has used an oil boom to entrench and enrich itself further at the expense of the country’s people. 

There’s also the fact that The U.S. Government and U.S. Corporations Support Obiang

Without the help of international oil corporations, it’s unlikely that Equatorial Guinea would have been able to drill for oil – think about it, drilling for oil requires heavy industry and lots of investment.

Exon Mobile, the USA’s biggest oil company, has been operating in Equatorial Guinea since the mid 1990s and controls a 75% stake in Equatorial Guinea’s most productive oil field, which produces 270 000 barrels of oil a day (the market value of oil is currently $50 a day, which means this one field returns a revenue of around $1.4 million a day, or around $400 million a year).

NB the government (which basically means Obiang’s family) only controls a 5% stake of this particular field, but this tiny stake from this one oil field returns them something in the region of $300 000 a day, and there are many more oil fields.

Despite his dismal human rights and corruption record, Obiang was recently invited (in 2014) to a U.S. African summit – along with a whole load of other human rights abusers on the continent. The general gist of the article is that the U.S. is tolerant of corrupt governments in Africa because if they don’t do business with them, then the Chinese will, there’s also the fact that they might be useful in combating Islamic extremism.

Related Posts (forthcoming)

This country case-study is also useful for illustrating how TNCs are not interested in promoting social development in other parts of the world.

(1) You’ll notice from the graph above that Cuba is a good example of a country which has a relatively high human development compared to its GNI per capita, more on that later.