Black Gold

[Free Cities League]

Chapter I: Under the Corporate Veil​

Free, Founder and Capital City of Handelsburg, Free Cities' League

It was a typical March day in Handelsburg, capital of the Free Cities' League. Drizzle made walking in the streets immediately bearable until the realization, upon arriving in some building, that you are in fact all wet. But Richard Eisenacher was already used to the typical Handelsburg drizzle, and did not even bother checking the weather. '15 days of rain per month during the summer, 20 during the winter', he thought, 'it's just not worth it'. Richard Eisenacher was the Chief Administrator of Providenz Benzin AG, one of the biggest companies in the Free Cities' League. His predecessors had successfully exploited the oil fields in the Outerseas Province of Providence, becoming the main supplier of oil and crude in the League, having an near-monopoly of 85% market share. Competitors? Only foreign companies, the most important of all the Portusgalian oil company SACOR.

Eisenacher had been nominated Chief Administrator by the shareholders two years ago, replacing long-time CA Dirk De Graaf, known for his aggressive business style, and chiefly responsible by the expansion of Providenz Benzin. He had maximised profits by hiring a higher number of native employees in Providence's oil wells, underpayed employees, almost slaves, though this was a very well-kept secret. Eisenacher did nothing to change the situation, but he decided to change attitude towards competitors. He had talked to this man from Providenz's main competior, SACOR, some days ago:"After all, we're all in it for the money. So, if we cooperate, we could maximize profits." He considered a pure competitive market a destructive force that lowered prices and reduced profit margins on the long-term, and, as such, he sought cooperation with other competitors, distributors, etc.

But this would be a big day. Taking all precautions necessary, a Portusgalian man would arrive very soon to PB's HQ in 32 Hochstraße in Handelsburg. Eisenacher had arranged a fake visa and the Portusgalian a fake ID card. Nobody knew he was a SACOR employee, and the FCL's authorities thought he was just a tourist. Arriving at the headquarters, Eisenacher was greeted by his secretary:

"Herr Eisenacher, Herr Schmidt told me to inform you he is in the meeting room waiting for you."

"Thank you Laura. Hold my calls for the next hour, ok?"

"Ja, mein Herr"

Eisenacher knew what that meant. Schmidt, one of his assistant, had been tasked with escorting the Portusgalian towards the meeting room without raising any suspicions. Why such secrecy? Well, because of its dominant position in the petroleum market, Providenz Benzin was under the close watch of the General Administrative Council. The Sub-Direction for Competition and Free Markets, included in the General-Direction for Economy had competence to investigate any claims of anti-competitive behaviour and could impose huge and damaging fines. As such, any meeting with a competitor could raise some eyebrows. That's why this was conducted in the utmost secrecy. The Portusgalian, reported to be a simple employee was in fact Gastão Sousa, CEO of SACOR.

"My friend Gastão. You are indeed a master of disguise. Officially entering the league as a Portusgalian tourist, behold the CEO of SACOR. Welcome to Providenz Benzin. Should I serve you beer, gin, schnaps? We have a lot to discuss..." said Eisenacher while he hugged Sousa.

 

[Portusgalia]

Gastão Sousa: Damn... This country gone nuts! So much protection in here... It is hard to believe in this, since there is so much trade between the two countries! I will go for a Gin, it is hard to get a good one in Elefanta Island! Damn Himyari heat, that land is inhospitable Eisenacher:

So it is the deal my dear friend. Fighting with each other is foolish, and since we are business men, not fools...

SACOR has passed from a simple "distributer" to an "oil extractor" corporation, and our stock prices have risen. Unfortunately there is a counterpoint, our tanker fleet is too small, and our tankers small. SACOR mainly operates in Portusgalian mainland and overseas provinces, and recently we have opened some gas stations in the FCL.

I'm willing to give 10% of the SACOR SA to Providenz Benzin AG, for "xxx". We need this money right now in order to support our project in the LISNAVE shipyard to build a larger tanker model, so we may ship the oil to our refineries in Portusgalia. Unfortunatly those assholes in the government don't authorise us to build a refinnery in Bissau... I think I will have open the purse strings a pay some... "stimulus" to that asshole minister.

We coul cooperate, rumors say that Providence's oil fields are almost lean...

 

[Free Cities League]

Eisenacher listened very carefully to what the Portusgalian had to say, while he poured a little bit more gin into his glass.

"I know it must be annoying all these security concerns but, you know, our government is crazy about fighting 'anti-competitive practices' and, considering we have a new General Administrative Council, we still have to convene our best lobbyists in order to put the new Director-General for Economy, Samuel Burton, in our pocket..."

As he considered the Portusgalian offer, he thought about protecting this operation from the shareholders. As Providenz Benzin was a stock company, its capital was open to anyone, and, as such, any disclosure could lead to judicial proceedings.

"I am sure we can find some sort of deal that doesn't involve the shareholders. Any operation pursuant to a purchase of SACOR's shares would have to have their consent. Let us think of another option. After all, we, as administrators, are merely managing other people's money, and so, let's apply it well first, in order to appease shareholders. As such, instead of such purchase operation, I propose something that, naturally, cannot come out of this room."

Eisenacher took a look around, looking Schmidt in the eyes, hoping to receive a sign of trust. Schmidt nodded lightly and Eisenacher immediately saw trust there.

"Currently, the price per liter of regular gas practiced by Providenz Benzin to gas stations in the Free Cities' is 1.2 tallers p/liter. ACOR practices a slightly lower price, at 1.1 tallers. Conversely, we have managed to provide gas 0.9 tallers p/liter in Portusgalia, as opposed to 1 taller p/liter provided by ACOR. Considering ACOR has a 10% market share in the FCL and we have a 9% market share in Portusgalia, let us force the gas stations to pay more for our oil. If we raise the prices to 1.5 tallers p/liter both in the FCL and Portusgalia, considering both of us combined amount to near 98% of the respective markets, the gas stations will be forced to pay us that amount, since no other competitor will be able to lower prices to compete with us. Considering that consumers will not stop using cars, they will be willing to pay more, seeing it as a mere consequence of the volatile international oil market. If the press starts asking questions we use different justifications - we can say our oil reserves are starting to deplete and we had to increase prices to ensure profit. You allege political instability in the Portusgalian colonies. It is easy. That way, we both get richer cooperating and the shareholders are happier because their profits increase. Then, they can turn a blind eye in acquisitions..."

 

[Portusgalia]

Gastão Sousa: In fact i had a conversation with the local Prefect... Mascarenhas e Menezes. He is a total scoundrel, and the locals call him "The Zumby of Elefanta". "Zumby" in there means "evil spirit from a dead person reincarnated", by this you can see the fame of the man in the area. But one thing is amazing, besides considering the old man has an "evil spirit", they regard him has a father! A kind of severe but caring father... That man lives haunted with the idea that the dutch in Bangala will invade Elefanta. He is resolute in the idea! I have managed to get some information out from the right persons, and there is in fact some rumors that Lisse will try to get its hands on Elefanta, so it seems the man it isn't such a lunatic has it seems. Once again the problem is Lisbon... For them Lisse is a very friendly country, and civilized, and don't even take in consideration the rise of the Neo-Batavianism has a political form of dutch imperialism... Damn assholes, all are already senile!At least they don't mess with economics and corporations...

It that a good reason to raise oil prices?

 

[Free Cities League]

Eisenacher was absolutely sure than a sensationalist surge in the press about either the foreseeable depletion of oil fields in Providence or the Zumby in Elefanta. He then moved to make another proposal:

"Since we are here, and considering we are closing one of our wells, I have a nice proposal. In one of such wells, we have 1,000 negroes working. They demand very little payment, usually a taller is day is enough, and some food and improvised accommodation. Since they will soon become a nuisance, we can transfer their ownershi... beg you pardon, contracts, to you for a fair amount. Let's say 200 tallers per head?"

 

[Portusgalia]

Gastão was in a tough situation. He knows that the FCL has a kind of apartheid, but in Portusgalia civil rights are taken very seriously, and this can bring a mess with local authorities, specially the "Zumby", who is the government watchdog in Bangala.

Gastão: Mr Eisenacher, but closing is really going to benefit us? Unless you desire to provoke a petrol shortage! But remember we can be overwhelmed by other companies, unless you already have an agreement with them, like you have with us now!

Ok... Are they well workers or refinery workers? If they are refinery workers, and have experience in the are, we can contract them in order to put them working on Bissau refinery. 200 taller for experienced workers? That is retail price my friend!

 

[Free Cities League]

"You don't need to worry. The situation has changed. I have received some information that a rebellion is about to erupt in Oerwoudland, where we have two wells. We don't need to fake political instability, it will come to us."

 

[Portusgalia]

Gastão Sousa: Good! Just good, it is easier!

Gastão was ready to make his move...

Gastão Sousa: Look, we are still a regional oil corporations, why don't we invite the Sikandarans to this proposal? We can form a Cartel, it is easier for us to run the business

 

[Portusgalia]

Ooc: Rolo?