1960s >> 1964 >> no-718-june-1964

Finance and Industry: Oil under the sea (1964)

Oil under the sea
In our April issue we reported on the scramble now going on to stake out claims for oil concessions under the North Sea. As D-day draws nearer the Liquid Gold Rush is becoming more and more hectic.

D-day will be when the Minister of Power announces the regulations covering the issue of licences to prospect the sea bed, and asks for applications from interested firms. According to the Financial Times, the successful applicants may be hard at work by September.

Already the big boys are moving in, consolidating and amalgamating to impress the government that they are well in a position to cope should a licence come their way. Just to be on the safe side I.C.I. has set up shop with Burmah Oil and the Murphy Corporation of America, and the Gas Council has linked itself to U.S. Pan American International. Even more ambitiously, no less than six big British industrial firms, including Dorman Long and A.E.L, have set themselves up into a consortium with the impressive title of the North Sea Marine Engineering Construction Company. Asked about the prospects of finding oil, the managing director of the new company was very terse and to the point. “All I would say,” he said, “is that 46 oil companies would not be doing seismological work if there was not any oil”. Which, knowing our oil companies, seems apt enough comment.

Nobody knows at the moment just how many licences are going to be issued. But it won’t be long before the lucky contenders are announced. It looks as though it is going to be quite a race—with some very tempting prizes for the winner.

and on land
The race for oil near at home should not make us overlook happenings further afield. British troops are not being shot at in Aden by trigger-happy Yemeni tribesmen for nothing; not the least of the reasons they are there for is to keep an eye on the neighbouring oil installations, in which British capitalism has a large stake.

If we include Libya, which is not all that far away, the Middle East produces about 60 per cent by value of British oil requirements. British military pretensions have long since precluded active intervention in Iraq and Persia, but there are still treaties of ‘‘protection” with the fourteen petty states of the South Arabian Federation—these include, in particular, Kuwait with its annual output of 100 million tons of oil, in which B.P. has a fifty per cent interest. Some of the other sheikdoms are also fair oil producers, and exploration for new fields is going on in all of them, both on land and under the sea.

There are many people in British capitalist circles, who would be very pleased to get away from British dependence on Middle East oil. It has always been a risk politically, and is becoming more and more of a risk economically, particularly as the local ruling classes put increasing pressure on the oil companies for a greater and greater share of the revenues.
Which brings us back home again to the explorations under the North Sea. There is nothing probably the government would like better than for a hefty deposit of oil or natural gas to be found in British territorial waters. Something on the scale of the recent big find in Holland would be just the thing. Then they and the oil companies would really be able to put the screws on when it came to the next squabble over royalties with the sheiks.
The last bastion
Of all man’s activities under capitalism, it is agriculture that has most resisted change. But change it does, in spite of all the obstacles, natural or man-made, that serve to impede it.
In the United States, the barriers have long since been broken. But, mechanisation apart, the rest of capitalism has been slow to follow the other developments which have become such a feature of the American agricultural scene during recent years. Yet within the last few years, in Britain especially, there has been a drastic change. Once upon a time farmers could think only of mass production in terms of crops; today, all is talk of applying this process to animals and animal produce.
As we have ourselves reported in these columns, one company alone is planning to produce about one-fifth of future British egg supplies, and it has since been announced that other firms are considering entering the egg industry on a similar scale. Linked with this development is another, again already prominent in the United States. This is vertical integration, the process whereby a single company controls the whole sequence of production — it has already been introduced into the broiler industry where some firms produce the feeding-stuffs, hatch out the young chickens from eggs laid by their own hens, rear them to broiler weight, and handle even the marketing themselves.
All this has come about in Britain in the space of two.or three years—remember that the broiler industry itself was unknown ten years ago. Now the same process is being applied to cattle and to pigs; the Financial Times recently reported a project by one group to set up a gigantic pig-rearing unit estimated to cost £300,000, complete with sausage factory alongside!
One side effect is already troubling the millers and makers of animal feeds, since the fundamental feature of the new combines is that they produce their own fodder requirements. The reaction of the millers has been, as often happens in these circumstances, to jump on to the band waggon themselves. Thus Spillers were quick to move in with Buxted Chicken, the big broiler chicken firm, to operate jointly their own feeding stuffs plant.
The small farmer, already feeling the squeeze from a host of directions, can hardly cope with this type of development. The alternatives for him will be either a constantly worsening existence if he chooses to stay on his farm, or a new life as a wage-worker in the town. Britain already has the lowest proportion of its population living on the land, but it is obvious that the forced emigration to the towns has still to exhaust itself. Agricultural mass production and vertical integration between them look like finishing off the process.
Stan Hampson

Leave a Reply