The Mudcat Café TM
Thread #102153   Message #2081488
Posted By: Teribus
19-Jun-07 - 05:56 PM
Thread Name: Kennedy Airport Story
Subject: RE: Kennedy Airport Story
In most cases the mineral rights are owned by the State irrespective of who owns the land. Under normal circumstances the land owner is recompensed for any disruption caused by exploration and extraction/production. This can be paid by a lump sum payment, straightforward rent or by royalty payments paid per barrel.

The State that owns the oil does not necessarily have the money or the expertise to explore or extract the oil, so it sells a licence to "the-big-bad-oil-company". Now the oil company does not own the oil, but it pays for the exploration effort, it pays for the installation of the wellhead structures, blow-out preventers and pielines to extract and transport the oil. In return for all this investment the Government who still owns the oil gives the oil company a share of the proceeds. The State can revoke the oil company's licence at any time. That is basically why you can't steal anybody's oil, because by and large until the reservoir's exhausted, you can't take it anywhere. If you extract it you sell it on a world market, for the market price.

Now in the case of Darfur, the Sudanese Government and their proxy agents the Janjaweed Militia are trying to drive the locals off the land in order that they do not have to compensate them, and/or share the wealth of the province. Nothing to do with "big-bad-oil-companies" sharing out anything.