The result is that today we have Al Jazeera English, Telesur and China Global Television Network (CGTN). AJE is funded by the Emir of Qatar, Telesur by Hugo Chavez of Venezuela and several other Latin American governments and CGTN is owned by the Communist Chinese government. Even though these media outlets are state-run, they do not merely function as government mouthpieces. Their editorial policies vary according to essentially where they are located. But a common theme amongst three media outlets is that they aim to offer something different than the BBC and CNN, their reasons for the same vary though.

Telesur Editorial Policy

Telesur is based in Caracas and it was launched as a 24/7 in October 2005. It’s stated editorial policy is to offer a different vision of news from the BBC or the CNN. The reason for this is that Telesur believes that these big media outlets for the longest time did not present their side of the story, it was always one-sided and against them. Never did the likes of CNN bothered to cover the local news of Latin American countries. CNN and the likes always seemed to pass America’s foreign policy goals. Telesur policy has been to challenge/critique American imperialism. A simple youtube search result shows the numerous programmes done by Telesur on US imperialism. 

Telesur not only gives an in-depth perspective of the Latin American people but it also to some extent focuses on raising the issues from the Global South. For eg., they did a story on the Indian Army’s Brutality in Kashmir. Telesur took a pro-people stand and an anti-establishment view. 

Al Jazeera Editorial Policy

AJE was launched in November 2006, although there was already AJA (Arabic). The reason to launch an English version was to reach a global audience and present the views of the Arab/Muslim world. After the 9/11 attacks, the coverage of the Middle Eastern countries by the likes of the BBC and CNN had created a negative stereotype about the Arab world. The one-sided coverage of the Iraq war by BBC world and CNN only played a spoilsport in strengthening the stereotype against the Arab population. AJE’s editorial policy, therefore, has been to present both sides of the story. Their aim is to provide a different perspective on the news.

According to Josh Rushing (AJ’s US Defence and Military Correspondent), “I tell people that Al-Jazeera provides a different perspective to CNN but an equally important one. CNN films the launch of a missile, AJ films what happens when it lands”. AJ provide different perspectives in three ways, firstly by covering the same international news in an alternate way to the ‘Western perspective’ of the BBC World and CNN, secondly, they cover the parts of the world which no one covers, which tends not to get reported at all and thirdly by covering the developing countries (Global South) in an original way. So their editorial policy is pretty much like Telesur when it comes to presenting a different world view about the Arab world. 

China’s Global Television Network’s Editorial Policy

CGTN, the Chinese media outlet has a different editorial policy than Telesur and AJE. Since it’s controlled by the government, it mostly acts as an extended arm of the government. CGTN’s policy has been to show the better side of China to the world and debunk many stereotypes that the Western world has of China. China is always perceived with a negative perception in the Western world (America, EU countries etc) because of their being a Communist government and how there’s no press freedom at all. The recent reports of curbing dissent and protests and violation of Human Rights has also led many to have a very bad image of China. 

Chinese government’s aim, therefore, is to change this perception and they use CGTN as their foreign policy arm. CGTN, therefore, channels the interests of the government in a more direct way. CGTN is trying to accomplish certain goals through its editorial policy, firstly it does shows on emphasising on History, culture, Philosophy and civilization of China, secondly, through its programmes it tries to assert that China is emerging as a formidable economic power (eg., their coverage of the celebration of ten years of Beijing Olympics) and lastly it wants to address certain stereotypes about China. So it’s quite evident that the Chinese government wants to change its global image with the help of CGTN. China wants the world to like it and increase its soft power through CGTN. 

As discussed above, China wants the world to like it and it cannot happen unless positive aspects of China are shown to the world. China’s growing military power, its political system along with its growing human rights violations, and it’s economic strength all contribute to its negative image abroad. For this reason, the Chinese government felt the need to invest in global media. The other reason to go global was that the government was not happy with the way they have been covered by the Western media in the past. Hence China invested more in strengthening it’s foreign language channels and expanded its partnership with foreign television organizations. Leading up to the 2008 Beijing Olympics the Western media had increased its coverage of China in a more hostile way, highlighting the Chinese government’s Human Rights violation records. The Western media’s coverage of the pro-Tibetan riots was seen by the Chinese government to be as anti-Chinese.

A CBN  report highlighted the lack of democracy in China (no free journalism and suppression of dissent). It was believed that this would change after the games as post the Olympics China was seen to have graduated as ‘World Power’. But nothing changed and the negative coverage of China by the Western media continued. Hence China could not wait for the Western media to change its critical stance on China and therefore it was needed that China is proactive and “go global” and push for Chinese perspectives into the international arena if it wanted to contest the discursive power of the West. CCTV (now CGTN) China’s premier broadcaster global expansion has risen manifold after the decision to go global was taken. CCTV claims to have achieved global coverage with its. CCTV4. It’s a Mandarin-language channel whose target audience is overseas Chinese-speaking viewers. The channel reaches approx 10 million viewers outside China in 93 countries. There’s another channel which has helped its global reach, CCTV-9, a foreign-language channel (English, French & Spanish). It has some 40 million viewers overseas in 94 countries. 

Conclusion

The editorial policy of a news media outlet varies according to the region, the tensions in the surroundings as well the political environment of the region. Although it would seem that the editorial policies of the above-discussed media outlets are similar, it’d be wrong to make a quick judgement. A quick glance at their websites gives a clear picture of the kind of stories they do and what do they want to tell the world through those stories. 

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The US has been importing crude oil from 1915-1932. But the country was still a “net exporter” because the export of refined products exceeded the crude oil imports. But after the second world war, the US consumption outpaced production again and in 1947 they became a “net importer” again. Until 1955 the US produced more than 50% of the world’s entire oil production. And until 1964 they remained the largest oil producer, but then the Middle East took over. At around 1984 the US oil production was about 18% of the total world production.

The oil industry: Recent history & OPEC

In 1950 the Middle East produced around 1.8 million barrels of oil per day (mmbbl/d), that was about 17% of the world’s production. And this increased to 5.2 mmbbl/d in 1960, by then around 24% of the world production. To protect its own oil industry, the US introduced mandatory import quotas which limited the imports of the Middle East crude oil. This kept the oil price in the US sort of constant, but “non-US crude oil” decreased in value since a major part of their market (the US) was inaccessible due to the quotas.

And as an answer to this, the OPEC (Organisation of Petroleum Exporting Countries) was formed in 1960 by 5 major oil-exporting countries: Venezuela, Kuwait, Saudi Arabia, Iran and Iraq.

In 1970 the US relaxed its import quotas. And after the Yom Kippur war of 1973, in which the price of oil went up significantly, the developments in oil prices were relatively stable after 1974. Oil prices where high and this made it attractive to explore and develop oil areas that were not of economic interest in the past. As a result, major investments were made in new oil areas in Alaska, Mexico and the North Sea. And these areas started to produce oil by the end of the 70s. This resulted again in a large decrease in OPEC production after 1977 as a result of these new areas. Btw, OPEC produced in 1977 the high amount of 31.3 mmbbl/d.

Concerning oil prices, the Iranian Revolution drove the spot price of OPEC oil to 25 USD bbl in 1979. And this resulted in another round of oil price increases to over 40 USD bbl. But these price increases were poorly timed because world demand was falling and many new oil fields outside OPEC were getting more and more operational. Then mild winters in 1982 and 1982 in Western Europe resulted in even more oversupply, and oil-importing countries did not need to buy the expensive OPEC oil anymore. This resulted in that OPEC production was about 15 mmbbl/d in 1985, less than half of its production in 1977 (31.3 mmbbl/d, as mentioned). This had a severe effect on oil prices, and when in 1986 OPEC production went to 18 mmbbl/d the price collapsed to below 10 USD bbl. And since 1986 OPEC attempts to maintain the oil price at the level of the full cost of non-OPEC supply.

The oil companies: Standard Oil

Most of the big oil companies had their origins in the US when the “Drake Oil Field” was found in 1859 in Pennsylvania. The first big company formed was then “Standard Oil” with the financing of John D. Rockefeller. By the end of the 1870s, over 90% of all kerosene was passing through standard oil’s facilities. The company got so big that the whole company “Standard Oil Trust”; consisting out of Standard Oil New Jersey, Standard Oil Ohio etc. etc., needed to be divided. The US supreme court ordered this in 1911.

And the main oil companies as we know (knew) them were formed out of Standard Oil:

• Standard Oil of New Jersey became: Exxon;
• Standard Oil of New York became: Mobil (before merger Exxon);
• Standard Oil of California became: Chevron;
• Standard Oil of Ohio became: Sohio (before taken over by BP);
• Standard Oil of Indiana became: Amoco (before taken over by BP);
• Continental Oil became: Conoco;
• Atlantic Oil became: Sun Oil.

The oil companies: Royal Dutch & Shell Group

Despite early US dominance of the oil industry, there was another major player at the beginning of the 1900s.

The company was Royal Dutch Shell with a background in two companies:

• Royal Dutch;
• Shell Transport & Trading.

Shell Transport & Trading was set up late 1800 by Marcus Samuel, and the company transported kerosene in large quantities to the far eastern market. And Royal Dutch had its origins in the “Dutch East Indies” where for several years oil seepages had been reported. By 1892 Royal Dutch was producing oil with a crazy growth (sixfold increase) in only two years of time. By around 1900 there were takeover attempts of Standard Oil. And in order to resist this Royal Dutch and Shell Transport & Trading merged in 1907. So at the time of this merger in 1907, the oil market was dominated by Standard Oil and Royal Dutch Shell.

In the next blog in this sequence, I will continue by talking about the other companies in the oil industry. And I will discuss oil reserves and production.

And later all the other aspects of valuating these oil companies will be discussed in this sequence of blogs:

• The market for oil;
• Accounting issues for oil companies;
• Valuating “Oil exploration and production companies”;
• Valuating “Integrated oil companies”.

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