TPT January 2007

From the AMERICAS

Among other things, he touched on America’s outsized appetite for energy. Here, lightly edited, are a few excerpts from ‘An oil baron not afraid to be candid’ (7 October): Q: Some people believe high oil prices are here to stay. Do you share that view? A : First of all, prices are not very high. Sixty dollars a barrel is not very high. If they were high, the American consumer in particular would start to conserve. As long as each American consumer burns 26 barrels of oil per year, against 12 for Europeans, prices are not high. Today, a barrel of oil is worth half a barrel of Coca-Cola. You should put things into perspective. It is clear that the Western world can live with oil above $30, $40, $50, $60, $70 a barrel. Economies expand, inflation is low, and consumers continue to drive SUV’s. Air-conditioners are set so high in American restaurants that you have to put on a coat. Otherwise you get sick. Q: Are you saying the American economy is wasteful in its energy use? A : Certainly it doesn’t use energy efficiently. If American cars had the same fuel efficiency as European cars, the savings in fuel would equal the total production of Iran. That’s four million barrels a day. Q: So it’s all the fault of Detroit and car makers? A : Even if the United States were self-sufficient in oil, hydrocarbons remain a limited resource. We all have an interest in increasing our efficiency to extend the life of the fossil fuels, for environmental reasons. This will more than compensate all our efforts in renewable energy. This is not to say we don’t have to make renewables. But we have a potential for efficiencies that is enormous.

Q: How do you reconcile rising demand and the need for more supplies when governments make access more difficult? A : It’s their oil, not mine. We will have access to their oil as long as we offer something – technology, project management capability, investment – they would not otherwise have. If we do not add value we are out. Try going into Saudi Arabia and helping Aramco to extract the easy oil. They don’t need us. First of all, they are a good company. Second, the oil is easy. Why should they bring us into something they can do by themselves? Q: Are you concerned by the talk of possible economic sanctions being imposed against Iran? A : I often say that unfortunately you don’t find oil in Switzerland. I cannot choose. Since oil is not in Switzerland but in Russia, in Iran, in Kazakhstan, we have to be there. Then we modulate our presence according to conditions, which are constantly changing. But if you are not there, you are out. Eni SpA is a multinational oil and gas company with a presence in 70 countries. Recently privatized, it is Italy’s largest industrial firm.

Business briefs . . .

› Deliveries of new business jets to American buyers are expected to exceed 1,000 for the first time in 2007, Honeywell Aerospace said in its annual BusinessAviationOutlook, and that pace is expected to continue for the rest of the decade. Honeywell said that more than 3,300 medium and medium/large jets will be delivered through 2011, as well as about 3,250 light and medium/light jets, 1,600 long-range

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J ANUARY /F EBRUARY 2007