The competition for natural resources in the 21st century provides new horizons that represent an important shift in the future of international relations.

In the past, global companies relied on their governments to defend and expand their interests within the framework of intense competition, especially in areas of natural resources, such as oil.

In this regard, political, economic and strategic interests interlinked with one another, as the activities of many companies enjoyed a shared national identity with their country of origin. This results from the massive profits reaped by these companies, often with the help of foreign investments, in addition to the number of jobs they create and huge taxes they pay.

Recently, these companies have became stronger by taking advantage of their positions. They wield power and can even dictate terms to governments and have a say in international issues that go beyond their commercial affairs.

British Petroleum (BP) provides a concrete example of the role these companies can play, when it played a big part in releasing the Libyan Abdul Baset Al Megrahi, who was convicted for the bombing of a Pan American air plane over the small Scottish town of Lockerbie in 1988.

This triggered the anger of the US administration, which apparently decided to punish the British company. The US may even work towards liquidating it for its involvement in the Gulf of Mexico oil spill in mid 2010, increasing speculation about whether the oil spill could have been a deliberate act.

Repercussions

The grave consequences of the oil spill almost led to BP's demise, due to the large and exaggerated compensations that exceeded $20 billion (Dh73.45 billion). Once this amount was settled by BP, the US made other demands regarding the public's right in these compensations, which prompted the British Government to defend one of its country's prestigious companies. The fact that BP belongs to a country that is an ally of the US did not exempt it from paying these compensations. The liquidation of this company will be a tough lesson for other companies to learn and will allow US oil companies to strengthen their influence. They could even over the British company's assets, which has extensive oil rights and a growing influence in the global oil industry, including rights acquired from Libya as part of the "Megrahi-Lockerbie" deal.

For its part, BP decided to escalate its confrontation with the US administration, after paying the required compensations, restoring the stability of its financial situation and ensuring the British government's support.

This situation drove the British company to head east, towards Russia, one of the largest oil producing countries, which was closely monitoring the situation between two rivalling allies.

Prime Minister Vladimir Putin welcomed the new BP Chief Executive, an American, who succeeded the former British national Chief Executive — a significant sign.

The move is a strong challenge for the US, since Russia granted BP oil rights in Arctic, which the US considered a direct threat to its national security. By doing this, Russia overstepped the US with regard to the pending issue of wealth sharing of natural resources.

This situation will worsen as significant and grave consequences development in this arm-twisting game between the world's dominant superpower and the prestigious British company.

Direct conflict

This is one of the latest developments in international relations in the age of globalisation.

These developments lie with the conflict between companies not being carried out through the countries under which they are operating, but through a direct conflict between a superpower and a giant company that is capable of handling this struggle with admirable determination and challenge.

At the same time, BP's strong entry into the Russian oil industry will bring back many alliances and balances in the global oil market, especially since Russia is considered a key supplier for Europe's oil and gas needs.

It is now the turn of global companies to express their discontent against America's arrogance, and raise their voice to defend their own interests and those of their countries.

This move by these companies symbolises that the world is rapidly changing and shifting power centres in international relations.

 

Dr Mohammad Al Asoomi is a UAE economic expert.