38
F
UEL
U
ND
E
R
FIR
E
investment pays off, and to split the losses if the project fails. Oil
companies can’t work on foreign soil without permission from
the government in charge there, so national governments are
often included in oil consortiums. For example, the government
of Kazakhstan is a partner in the Caspian Pipeline project.
An exploration rig searches for petroleum in the massive desert of Rub
al-Khali, also known as the Empty Quarter. Stretching across parts of Saudi
Arabia, Oman, Yemen, and the United Arab Emirates, the Empty Quarter is
thought to contain the largest petroleum reserves on the planet.
DEEP POCKETS
“If you don’t spend, you’re going to shrink,” says Dan Pickering,
president of an American-based investment bank that works
with oil companies. To ensure future growth, oil companies
invest billions of dollars each year in exploratory wells, drilling
equipment, pipelines, and oil leases that permit them to drill in
specific areas.
Companies also spend millions of dollars every year to sup-
port laws that protect the interests of their businesses and to
fight those that don’t. One such effort played out in California
in 2006. That year Californians were scheduled to vote on a law
called Proposition 87 (or Prop 87). If passed, the law would have
placed a 1.5 to 6 percent tax on each barrel of oil drilled in the
