Elf Aquitaine and the French Government 1976-1986
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THE AMBIGUOUS PARTNERSHIP: ELF AQUITAINE AND THE FRENCH GOVERNMENT 1976-1986 Thesis submitted by: Honora Mary Naughton For the degree of: Doctor of Philosophy At: The London School of Economics and Political Science, University of London UMI Number: U144610 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Disscrrlation Publishing UMI U144610 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 ABSTRACT This thesis explores the relationship of collaboration and conflict between France’s state-owned oil group, the Société Nationale Elf Aquitaine, and successive governments during the critical decade, 1976-1986, before wide-scale privatisation was initiated. The group’s development reflects the broader trend in government - industry relations away from dirigisme to market economics by both senior managers and politicians alike. Created as an instrument of government with a “national interest” mission, the group was expected to work for and with governments. This partnership was conditioned by the international nature of the oil industry. Directly exposed to the impact of the oil crisis, the group suffered from the switch made in France from oil to nuclear energy as the main source of power. This development accelerated not only the diversification of the group’s product range and multinationalisation of its activities but also modified its relations with government. It remained in public ownership, but became financially independent and acted increasingly like a private company. Governments were also affected by the economic crises of the 1970s, and by France’s closer integration into Europe. While Elf maximised its profits, governments relied on the oil group’s wealth. This confusing combination of dependence and governments’ use of their powers of ownership produced many conflicts. Yet Elf s leaders could also exploit the state link through grand corps networks to achieve their own goals. These ambiguities were sharpened during the decade because Elf was shifting between two modes of relationship: an instrument of government enjoying privileged links with the state and an independent private multinational. Partial privatisation in 1986 somewhat resolved the contradictions but heralded new challenges. Under the impact of the Single Market programme and GATT agreements, French governments divested themselves of powers they could no longer exercise, French firms shifted partnership with the state to partnership with foreign firms and the development of each individual firm became subject to its performance in the market. CONTENTS List of Tables and Figures 4 Abbreviations 5 Introduction 8 Chapter 1 From Statism towards Liberalism 38 Chapter 2 Conflict and Collaboration: the Institutions and 113 Practices of Company Policy-making Chapter 3 Managers and Technocrats? The Role of the 152 Corps des Mines Chapter 4 The Multinational Dimension: 189 Government - Company Strategies in an International Environment Chapter 5 The Elf Group Diversifies: Cooperation and 221 Confrontation Chapter 6 The Privatisation Process: Shared Objectives 245 and Disputed Methods Conclusion 270 Tables and Figures 294 Bibliography 304 Acknowledgements 310 TABLES 3.1 Distribution of the Ingénieurs du Corps des 294 Mines in 1986 3.2 Evolution of the distribution of Ingénieurs du 295 Corps des Mines 3.3 Distribution of Ingénieurs du Corps des Mines 296 in the administration 3.4 Distribution of Ingénieurs du Corps des Mines 297 in the public or para-public sectors 3.5 Distribution of Ingénieurs du Corps des Mines 298 in the banking and insurance sector management consultancy and engineering firms 3.6 Career path of the three founders of the Bureau 299 de Recherches de Pétrole 3.7 Distribution of Ingénieurs du Corps des Mines 300 in the energy sector 1980-1986 FIGURES 5.1 Chemical pathways 301 5.2 Pathways for halogens and their derivatives 302 5.2 Principal areas of activity of the French 303 chemical industry ABBREVIATIONS AGIR Azienda Nazionale Generate Italiana ASCOOP Association Coopérative ATO (Contraction of Aquitaine and Total) BP Britisti Petroleum BRP Bureau de Recherches de Pétrole CDF Charbonnages de France CEA Commissariat à L'Energie Atomique CEP Compagnie d’Exploration Pétrolière CEPM Comité d'Etudes Pétrolières Marines CERCHAR Centre d'Etudes et de Recherches des Charbonnages de France CFA Cours du Franc Africain CFP Compagnie Française des Pétroles CFPA Compagnie Française des Pétroles d'Algérie CFR Compagnie Française de Raffinage CGI Confédération Générale du Travail Cl! Compagnie Internationale de l'Informatique COGEMA Compagnie Générale des Matières Nucléaires CRPM Centre de Recherches du Pétrole du Midi QATAR Délégation à l’Aménagement du Territoire et à l'Action Régionale DGE Direction Générale de L’Energie DGSE Direction Générale de la Sécurité Extérieure DHYCA Direction des Hydrocarbures DiCA Direction des Carburants EOF Electricité de France EGOCO European Group of Oil Companies EMC Entreprise Minière et Chimique EMS European Monetary System ENA Ecole Nationale d’Administration ENI Ente Nazionale d’ldrocarburi ERAP Entreprise de Recherche et d'Activités Pétrolières FDES Fonds de Développement Economique et Social FLN Front de Libération Nationale FSH Fonds de Soutien aux Hydrocarbures GATT General Agreement on Tarrifs and Trade GEP Groupement d'Exploitants Pétroliers IFP Institut Français du Pétrole IPC Iraq Petroleum Company MDIS Ministère du Développement Industriel et Scientifique NIOC National Iranian Oil Company ONCL Office National des Carburants Liquides OPEC Organisation of Oil Exporting Countries OS Organisme Saharien PCUK Produits Chimiques Ugine Kuhimann PID Provision pour Investissements Diversifiés PREPA Société de Prospection et d’Exploitation Pétrolière en Alsace PS Parti Socialiste PUK Péchiney Ugine Kuhimann RAP Régie Autonome des Pétroles RPR Rassemblement pour la République SAFRAP Société Africaine de Recherches et d’Activités Pétrolières SDECE Service de Documentation Extérieure et de Contre-Espionnage SEA Single European Act SEREPCA Société de Recherches et d’Exploitation des Pétroles du Cameroun SIP Société Industrielle des Pétroles SN Repal Société Nationale de Recherches du Pétrole en Algérie SNEA Société Nationale Elf Aquitaine SNPA Société Nationale des Pétroles d’Aquitaine SNPLM Société Nationale des Pétroles du Languedoc et du Midi SOFREA Société de Financement Régionale Elf Aquitaine SONATRACH Société Nationale pour le Transport et la Commercialisation des Hydrocarbures SOVAP Société de Valorisation des Pétroles SPAEF Société des Pétroles d'Afrique Equatoriale Française SPAFE Société des Pétroles d’Afrique Equatoriale TIPP Taxe Intérieure sur les Produits Pétroliers UCSIP Union des Chambres Syndicales de l’Industrie du Pétrole UDF Union pour la Démocratie Française UDR Union des Démocrates pour la République UGP Union Générale des Pétroles INTRODUCTION The subject of government intervention in industry is highly controversial. The extent to which government should own companies or intervene in the affairs of a nationalised industry has traditionally provoked a divergence of opinion according to ideological beliefs. Often those on the Left have argued that insofar as a public sector company is solely or partially the property of the nation, governments should control its activities in the public interest. Increasingly, however, many on the Left have asserted that ownership is not essential for control and indeed, in some cases, ownership may limit effective control. Full or partial private ownership within an effective regulatory framework has been presented as an alternative. Politicians of the Right, who have traditionally taken a more liberal view, argue that government control can only hamper a company's competitiveness. For them, the main concern of any company, state-owned or private, should be its profitability and the most efficient means towards achieving this end is for government to give those running the company the freedom to make their own choices. Some on the Right, however, argue that while public ownership can distort the allocation of resources by its effects on capital markets, states cannot abrogate all responsibilities for maintaining and supervising markets. It is in part this view which has given rise to the present trends towards the privatisation of state-owned companies and the creation of regulatory agencies, trends prevalent in all industrialised countries. The subject of government-industry relations is particularly interesting in the context of France. France has a statist tradition, and governments have often intervened in very directive ways in the affairs of industry and the running of firms. The waves of nationalisations throughout the 20th century and the introduction of economic planning in the postwar period are just two of the more obvious examples of government intervention. By means of both these forms of intervention, governments gave the state-owned companies a steering role in the economy. As a result, the public sector in France, especially