Tuesday, September 19, 2006

Book Review: The Color of Oil

by Peter McKenzie-Brown

Note: I wrote this in 2001, and just found it on the Internet.

Oil Shows Its Colours

Possibly the best book about the oil business since Daniel Yergin's Pulitzer Prizewinning volume "The Prize", a masterful narrative published in 1991, The Color of Oil offers a thorough and authoritative analysis of the global industry.

The book uses as its central theme the colours of the petroleum industry. For example, the industry's financial impact on the global economy is based on the idea that the colour of oil is green (the colour of money). A technical chapter on exploration and production is based on the idea that the colour of oil is black. A chapter on the U.S. impact on the oil industry begins with the idea that the colour of oil is red, white and blue.

You get the idea.

The authors are both US academics, and they are both engineers by training. However, they both have direct experience with the petroleum industry - Economides as a technical advisor to a number of U.S. corporations; Oligney as a corporate honcho who, according to his bio, "negotiated one of the first joint ventures in the former Soviet Republic of Kazakhstan."

The authors bring a strongly business-oriented focus to their book, and offer refreshing insights into much of its well-traveled history.

To give some idea of the perceptivity of this book, consider that it was published at the beginning of 2000 when the T.S.E. Oil and Gas Index languished around 6000. There was widespread gloom about the future of oil and gas investment.

Wrote the authors, "Now is the time to buy energy stocks. They will escalate in value substantially in the early 2000s. The wise investor buys for the long-term because energy is the world's biggest business, and it continues to move unstoppably forward."

The index is now one third higher. Market psychology seems to be changing, with more investors wanting to hold oil and gas stocks in their portfolios. If another period of energy crisis looms, as many pundits claim, this book will be a good primer to help understand what is happening.

The Color of Oil: The History, the Money and the Politics of the World's Biggest Business by Michael Economides and Ronald Oligney; copyright 2000. Published by Round Oak Publishing Company, 200 pages; $37.95. Available at DeMille Books.
Enhanced by Zemanta
Post a Comment