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Editorial comment

“We Need To Talk” is a phrase one rarely wants to hear in a relationship. It suggests that something in the relationship isn’t working for at least one of the participants. For the optimists out there, a suggestion such as this could be interpreted as a positive opportunity to examine exactly how the relationship or partnership is functioning, and what can be done in practical terms to improve the situation for all involved. For many, it precedes conflict and an inevitable disintegration of a formally workable arrangement.  

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The USA and BP are the couple facing that uncomfortable ‘talk’ at the moment. Louisiana representative Garret Graves has been recently quoted in the Financial Times as saying, “BP has a long history in Louisiana. Prior to the spill, we worked closely on a number of projects. Within a few weeks of the spill, they dropped us like a greased alligator”. Now, the ‘alligator’ has its opportunity to bite back. The trial to evaluate BP’s liability for civil penalties and environmental damages following the Deepwater Horizon tragedy is now underway in New Orleans. And, after a glance at the hashtag #BPtrial on Twitter, it seems like the gloves are off in court in spectacular fashion. Aside from the Gulf of Mexico states’ claims against BP, the trial opened with accusatory statements against and between collaborative partners; Transocean, Cameron and Halliburton. The old cliché “It’s Not You, It’s Me” certainly isn’t likely to make an appearance in this courtroom, when the blame stakes are so high. BP could potentially be faced with a penalty of around £17.5 billion if it is demonstrated that the company was ‘grossly negligent’.

What is the difference between a partnership and a relationship? One could argue that the former is merely mutually beneficial, and the latter is essentially, personal. BP and Louisiana were in a relationship that broke down and is going to be very hard to mend. On a recent drive from New Orleans to Houston, I lost count of the number of roadside billboards I saw denouncing the company. As for BP, Halliburton, Cameron and Transocean; outside of the courtroom, business will undoubtedly go on between them as usual as they continue to partner together on multiple projects around the globe. In big business, it’s often nothing personal. Partnerships sometimes operate best with no emotional attachments involved.

But what about the rest of the world? By 2035, China will import 85% of its oil. Geopolitically, Asia will come to greatly depend on other nations. Conversely, Russia will be looking for international partners to buy its gas.

There is a historical distrust in the relationship between Russia and Asia, and this level of personal distrust has in the past negatively affected their ability to do business together. In the future, China’s relationship with Russia will be critical. Asia needs Russia’s supplies more than Europe does now and there is a pressing necessity to foster accord (if not trust) between Russia and Asia.

Nowadays, countries looking to export and import global energy supplies have more partner choices than ever. But does that necessarily mean they should play the field and not get too attached to any one partner? On the contrary. The players in this market are investing more time and effort than ever into keeping their customers happy for the long term. Furthermore, nations such as the USA and China are increasingly looking for reciprocal arrangements with each other rather than authoritative ones in which they can wield ultimate control. After all, aren’t reciprocracy and compromise key in every successful relationship?