[Book Review]: The Secret World of Oil by Ken Silverstein

As energy demand rises, oil remains at the top of all energy consumption. Given its financial weight and political significance, countries are vying for deals to access their oil fields and guarding their energy security. 

But who are the actors behind these deals? 

Many studies on the oil industry are framed through the geopolitical, political economy and environmental lenses in the literature. In his book, The Secret World of Oil, Ken Silverstein, a senior investigative reporter with First Look Media, places the little-known characters in the global oil industry, including fixers, traders, gatekeepers, and lobbyists, at the centre of attention. These people do not own any oil fields or refineries, but, having all-important connections between governments and corporations, facilitate the oil deals behind closed doors. 

Corruption, as a theme, runs throughout the book. Silverstein relays information straightforwardly, providing vital context and illuminating the complexity of interests in the oil industry. Much of it is interesting, but these chapters are not really cohesive. It seems as if he is putting different notes together, causing readers to become enmeshed in too many details at times.  

The first half of the book discusses the role of fixers, dictators, and traders. 

Meanwhile, Ely Calil, a now-deceased powerful oil fixer and an adviser to various African presidents, acted as the middleman between the energy industries and government helping them to prosper there. Although his main focus was Africa, Calil operated businesses worldwide from the Middle East to Central Asia. He brokered many deals because he could easily reach the key decision-makers. 

Most importantly, the billions of petrodollars are shown to be a malevolent force, giving the green light to dictators to grip power. Such is the case of the corrupted Teodoro Obiang, the son of Equatorial Guinea’s dictator. He amassed colossal personal wealth from each deal. The country’s nickname is the ‘Kuwait of Africa’, having a vast amount of oil reserves. Within this crooked political system, its inflow investment is driven by political rent-making rather than objective assessment. In 2001, US firms lobbied their government to reopen its embassy in Malabo. In turn, the companies have been awarded most of the oil and gas concessions in Equatorial Guinea. The country continues to enjoy its relations with the US despite its notorious corruption. 

Such an industry is pervasively characterized by a patronage system and corruption. Silverstein then spotlights the Swiss-based Genclore, the world’s biggest company that not many have heard of, which profited from the 1996-2003 UN oil-for-food program. The corporation specializes in keeping the oligarchs in repressive countries happy in exchange for exclusive deals in the market. Take the oligarchs Gutseriev in Russia, and Bulat Utemuratov in Kazakhstan, for instance. 

The second half of the book examines the role of the gatekeepers and the lobbyists. 

Bretton Sciaroni became closely involved with the Cambodian government in the 1990s having moved there due to his involvement in the Iran-Contra scandal in the US. Arriving in Cambodia, he then worked his way up by coordinating a public relations campaign alleging the royalist party had launched a ‘campaign of provocation’ against the Cambodian People’s Party (p. 155). Hence, the 1997 military coup by Hun Sen was deemed a legitimate preemptive measure. Later, due to its close relationship with the government, Sciaroni’s consulting firm obtained various concessions for its clients, such as the oil and land deals. 

Subsequently, Silverstein narrates the role of a peripheral figure – the former British Prime Minister, Tony Blair. He argues that much of Blair’s consulting work relates to the energy-rich governments and oil corporations. For example, he was paid one million pounds to work as an adviser on governance for the Kuwaiti government and 27 million pounds to conduct a broad review of the Kuwaiti economy (p.182). 

Near the end of the book, the author explains the political power of the lobbyists in Louisiana. He then ends the book with a small discussion on how Neil Bush, the son of one American president and brother of another, uses his political networks to earn a great deal of money. For instance, Grace Semiconductor – a company backed by Jiang Zemin’s son paid Bush $2 million in stocks and $10,000 per board meeting (p. 270). 

An important issue I was not aware of relates to the role of think tanks, universities and nonprofit groups. Though not defined as lobbying organizations, they have been involved in promoting the oil industry’s interests. The Monitor Group of Cambridge, a global management consulting firm, charged the Libyan leader Muammar Gaddafi $250,000 per month to burnish his image (p.9). These prominent academics include historian Francis Fukuyama, the Middle East scholar Bernard Lewis, and Professor Joseph Nye of Harvard.  

It’s an engaging read. Silverstein’s account of these squalid players is useful and fascinating, although there is no deep or comprehensive account of each dirty figure. What it signifies is a political system run by corporate interests. The situation is not much different in other countries. These companies use intermediaries who know the local political elites to set up the deals and ensure the implicit government guarantees. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s