Petrochina y la nueva cartográfia energética

Hoy, PetroChina salía a la bolsa de Shanghai y se convertía en la mayor compañía del mundo a precio de mercado (1tillón de dólares), más grande que Microsfot, Ford, etc. Y naturalmente también en la petrolera más grande del mundo, doblando su precio de mercado al de Exxon.

La boragine inversora por PetroChina ha sido tan fuerte que la bolsa de Shanghai ha superado la de Londres tras esta incorporación. En el primer dia de cotizaciones en Shanghai, su precio aumentó dos veces y media el precio inicial, al mismo tiempo que su cotización en Hong Kong caía un 8%.

Sin embargo PetroChina no es considerada ni una de las 50 compañías más grandes del mundo y el 86% sigue siendo de propiedad estatal. Asi, ¿que esta pasando? Parece que la borágine inversora en China está provocando una burbuja de dimensiones considerables, sin embargo también debe considerarse que los inversores podrían estar evaluando las perspectivas futuras de la compañía, a la que se le augura un futuro muy prometedor de continuar el crecimiento económico chino y el persistente incremento del precio del crudo (un 10% en China la última semana).

Ya veremos como acabo todo esto, mientras tanto aprovecho por recomendar el nuevo dossier de Cartografare il Presente sobre el mercado energético (los mapas del post son de allí). Sin duda la web, disponible en italiano, francés e inglés tiene muchísimos recursos interesantes a explorar, no solo mapas, y también recomendaría Edizione 2006/2007. L’Asia orientale nell’economia politica globale (P. S. Golub) o el especial sobre el Caspio.

Y para terminar nada mejor que este nuevo vídeo sobre la teoría del Peak Oil que se llama, no por casualidad, A Crude Awakening:

RSS feeds

China and the interdependence of energy security

Hawksley in YaleGlobal: Today, a confident China bankrolls bad government in the Sudan and Zimbabwe and in the scramble for natural resources, has aspirations to control politically uncommitted swathes of the African continent. Extreme Islam has taken grip in Somalia, Nigeria and beyond and creeps toward cocoa farms of the Ivory Coast.

While inflexible thinking about state control over the economy by the hard left contributed to the collapse of communism, it may be the inflexibility of the free-market right that threatens the future of Western liberal democracy.

From Dilip Hiro in Asia Times: So dramatic has been the growth of the state-run company PetroChina that, in mid-2007, it was second only to ExxonMobil in its market value among energy corporations. Indeed, that year three Chinese companies made it on to the list of the world’s 10 most highly valued corporations. Only the US had more with five. (…)

“China’s oil diplomacy is putting the country on a collision course with the US and Western Europe, which have imposed sanctions on some of the countries where China is doing business,” commented William Mellor of Bloomberg News. The sentiment is echoed by the other side. “I see China and the US coming into conflict over energy in the years ahead,” said Jin Riguang, an oil-and-gas adviser to the Chinese government and a member of the Standing Committee of the Chinese People’s Political Consultative Council.

Nye in Project Syndicate:

China appears to believe that it can secure its energy imports by locking up oil contracts with pariah states like Sudan. However, while this short-sighted mercantilist approach creates foreign policy problems over issues like Darfur, it will not really protect China in a time of supply disruption. It would be far better to bring China (and India) into the IEA, and encourage normal Chinese participation in world markets.

Another new dimension of the energy security problem is the manner in which high prices and increased reserves have transferred power to energy producing countries. State-owned companies now control far more oil and gas reserves than do the traditional private energy companies once known as the seven sisters. Many of these state-owned companies in countries like Russia and Venezuela are not responding merely to market forces, but are using their newfound pricing power for political purposes.(…)

This year, China will surpass the US in emissions of greenhouse gases. It builds nearly two new coal-fired electricity plants each week. In such a world, energy security can no longer be summed up as greater energy independence. Instead, we must find better ways to cope with energy interdependence.

RSS feeds

Russia to claim the North Pole

We have seen it on the news:

and in Russia Today

or the BBC or the humorist Craig Ferguson on CBS and even the catalan TV3 did a great report about it.

Since it’s fundation Russia has been looking for a warm water port mainly for strategic but also for comercial reasons, but they couldn’t get it (not on the mediterranean, nor the Black Sea, nor the Pacific -Japan Sea-). So if the Russian empire couldn’t reach the warm water… now the warm water is reaching Russian ports.

From the rosurces point of view, the North Pole is melting down and it’s sea bed is rich (they even say 25% of worlds oil) so Russia is already claiming it.

From the comercial point of view it is interesting to note that the fastest route from Japan to UK is going to be through the North Pole (10 days shorter), so creating a new and ever faster Silk Road? And also underscoring the strategic comercial situation of Singapur or the Malacca Strait? Only a bit… probably.

RSS feeds

Iran: The geo-strategy of oil

Mapa en AsiaTimes
Even with its strength as one of the world’s largest oil producers, Iran is dependent on foreign energy and is taking stiff measures to rectify the situation.

By Kamal Nazer Yasin
Fro Tehran for ISN Security Watch (18/07/07)

To many, Iran is an energy giant. The country possesses over a quarter of the world’s known oil and gas reserves. It is the second largest oil producer among OPEC countries and it has abundant natural resources which make it ideal for producing electricity.

Vast inefficiencies and abnormalities, however, mar this idyllic picture. Iran’s oil production has been declining steadily from its pre-revolution peak of 6 million barrels per day (bpd) to its present 4 million bpd – below its OPEC quota – due to war, sanctions, low investment and depletion. Iran’s consumption of petrol has increased at 11 percent per year. If the present trend continues, by 2015, Iran will have become a net importer of petrol.

The Islamic Republic’s official GDP is approximately US$196 billion. Yet, according to the newspaper Hamshahri, each year, the government spends roughly US$55 billion for the country’s energy needs including US$35 million in direct subsidies. In other words, 28 percent of the economic output is spent on basic energy needs. These huge and cheap energy inputs are needed to run the largely inefficient state-owned enterprises, to placate the public with dirt-cheap utility rates and to help out Iran’s strategic friends around the world.

Without any doubt, petrol wastage occupies the prime place among all of the various economic distortions in Iran. Despite its enormous oil reserves, Iran imports 43 percent of its petrol needs from other countries due primarily to huge domestic demands as well as lack of sufficient refining capacity.

The country’s average daily use is around 70 million liters per day, roughly equal to China’s daily consumption, but the latter’s population is 18 times larger. Economists attribute several factors for this situation. These include gas-inefficient automobiles, high population growth, the voraciousness of consumers and its super cheap petrol prices.

Until 27 June, petrol was 9 cents a liter, making it among the cheapest in the world. It takes no more than US$5 to fill up a car in Iran, compared to US$40 on the average in the US and US$90 in neighboring Turkey.

With Iran’s highly protected automobile industry and cheap financing – spurred on by President Mahmoud Ahmadinejad’s encouragement of car sales – manufacturers have no incentive to produce gas-efficient cars. According to a study by the financial newspaper Donay-e Eghtesad, 30 percent of the cars currently in use, consume 3 times more petrol than the international average.

Smuggler’s paradise
One of the most glaring by-products of the abnormally cheap gasoline prices is crossborder smuggling. According to the newspaper Siasat-e Rooz, smuggled petrol from Iran accounts for 10 to 14 percent of Pakistan’s fuel needs.

Iran shares vast border areas with Iraq, Pakistan, Turkey and other states; too vast for law enforcement forces to fully patrol. Mules, pick-up trucks, and tankers line up at major crossing points each day to carry Iran’s heavily subsidized gasoline to other countries.

The arbitrage could be quite huge. Iran’s anti-traffiking chief has been quoted in reports as saying that petrol smuggling is more profitable – and much less risky – than narcotics trafficking. According to an 8 July report in the newspaper Iran, petrol prices are more than 20 times higher in Turkey, 10 times higher in Pakistan and northern Iraq and 7 times higher in Afghanistan .

Using oil as geo-strategic weapon

“Oil is both Iran’s strategic strong point and its strategic weak point,” an Iranian political scientist told ISN Security Watch on the condition of anonymity. “It has given the state an unrivaled ability for maneuvering in both the domestic and the global spheres.

“But because of the same reasons, if the present structural distortions are not corrected, it can pose major security problems for the government.”

Aside from these factors, the academic pointed to the looming threat of economic sanctions should Iran’s relations with the US and the international community deteriorate further.

US President George W Bush recently renewed a bill imposing sanctions on international companies that invest more than US$20 million in the Iranian energy sector.

More ominously for Iran, in June, the US House of Representatives proposed legislature designed to curtail Iran gasoline imports through punitive measures against financial and business entities that assist Iran. If signed into law, these companies would be denied access to the US market.

According to the academic, Iran’s leadership has belatedly come to take note of these dangers and take action to remedy the situation.

A crash course in rationing

On the night of 27 June, with three hours notice, the Iranian government announced that automobiles would be allowed only 100 liters per month and the price would be raised to 11 cents per liter. The announcement was followed by rioting – complete with angry mobs burning down several gas stations and looting some government-owned stores – and motorists lining up to take advantage of the last few hours of cheap petrol.

Despite these missteps, the measure seems to have worked. In the first week after the new rationing program was introduced, traffic was down by 25 percent and petrol consumption was reduced by 28 percent. For the first time in years, it was possible to drive in Tehran without being affected by its notorious traffic jams and air pollution.

Fatemeh Vaez Jafari, one of Iran’s several vice presidents, said in an interview after the rationing: “Since our enemies have realized they couldn’t stop our nuclear program by force, they have started to focus on targeting us by going after gasoline imports.” She added: “The rationing has dismayed them completely. This was so important we can even call it a real revolution.”

As far as smuggling, the news daily Ressalat reported that in northern Iraq, petrol prices had gone up from 950 dinars (77 cents) per liter to 1,300 dinars.

“The government realizes it is in a race against time,” said the academic. “Other than this [petrol rationing], there are crash programs for increasing refining capacity and for converting cars to natural gas.”

To reduce its dependence on imported fuel, the government is seeking US$14 billion to build new refineries and modernize the existing nine in operation. Although US pressures may make it very difficult to come up with the entire sum, there are a few willing partners that may ignore or side step this.

In addition to these measures, the Iranian Oil Ministry is encouraging the conversion of cars to run on natural gas, which the Islamic Republic possesses in great amounts.

Iran is also using its global relationships with friendly countries like Venezuela and Indonesia to counter the effects of sanctions and ensure that the flow of petrol would not be stopped.

“There is a race for time in Tehran to prepare the country for the sanctions,” said the academic. “Only time will tell if these measures were effective enough or not.”

RSS feeds

Oil and Gas in Central Asia

The Foreign Policy Blog on Central Asia has a post on Peak Oil in Central Asia. Well, I don’t think that the Peak Oil theory is very well understood in that post, but there is interesting data:

According to the BP report and RFE/RL, the years of production that Kazakhstan has at present levels of extraction is 76.5 years; Azerbaijan, 29.3 years; Turkmenistan, 9.2 years; and Russia, 22.3 years. (…) Ideally, states use that “oil revenue window” to develop a varied economy using oil income as a jumpstart for a new economic engine.

I like the concept “oil revenue window”, and then the post continues refering to the resources trap and dutch disease theories (but don’t mention them) that the Foreign Policy magazine have reviewed not very long ago (see Petropolitics). From my point of view, improving governance is the best way to solve all the problems and challenges of the “oil revenue windows”, but to do that in only 10 years in Turkmenistan looks impossible so this country is going to miss the oil revenue window for sure. But we should not forget that Turkmenistan is much richer in gas than oil, so fso according to Planete Energies, could spend 30 more years on its “gas revenue winidow”, a much better perspective.

In a broader picture, tha Asian Develpment Bank just published an Energy Strategy working paper with some interesting conclusions:

According to the International Energy Agency,
primary energy demand in the developing Asia will grow from 2.9 billion tons of oil equivalent
(btoe) in 2004 to 5.8 btoe in 2030. This growth is not sustainable if most of this energy will have
to be met by fossil fuels.
According to the International Energy Agency (IEA), in the future, electrification level or
access will rise over the projection period, but the total number of people remaining without
electricity will fall only slightly, from 1.6 billion in 2002 to just under 1.4 billion in 2030. Most of
the net decrease in the number of people without electricity will occur only after 2015. The levels of the electricity-deprived will fall in Asia, but will continue to increase in Africa.

RSS feeds

EU, Central Asia and Energy diversification

Otro interesante informe del International Crisis Group, recién salido del horno, uno de los elementos más destacables es el mapa del final, que puede ser de gran utilidad por su claridad:

Bishkek/Brussels, 24 May 2007: Central Asia’s oil and gas cannot solve the European Union’s energy dependence on Russia, but these resources can destabilise the producing region unless governments use the revenues to promote good governance and rule of law.

Central Asia’s Energy Risks,* the latest report from the International Crisis Group, examines the resources of three countries – Kazakhstan, Turkmenistan and Uzbekistan – and the dangers of mishandling them. It argues that a trans-Caspian gas pipeline cannot largely write Russia out of the European energy equation, as Brussels hopes. But it also disputes the common view that the 12 May Russian-Central Asian gas agreement prevents that pipeline from being built.

“Central Asia can make a contribution – a modest one – to helping resolve Europe’s energy security concerns”, says Charles Esser, Crisis Group Energy Analyst, “but only if outside investment is tied to the good governance that is needed to improve regional and human security. If Western governments turn their eyes away from mismanagement and human rights abuses in expectation of short-term gains, they risk stimulating instability in Central Asia that will only add to their energy and other security problems”.

The three countries present different challenges, but all three are suffering from the “resource curse”. Kazakhstan has used its money best and is impressive compared to its neighbours but should aim for a higher standard now. It is at a point where enormous oil revenues need to be translated into commensurate outcomes that benefit its citizens. Corruption, an undiversified economy, improper management of state funds and a lack of the legal guarantees that are part of a true democracy hold it back.

All these problems are more extreme in Turkmenistan, a major gas exporter that was pillaged by the eccentric and brutal dictator Saparmurat Niyazov until his death in December 2006. Despite a relatively high per capita income on paper, most Turkmen live in poverty. Investment in energy production has faltered. It remains to be seen if anything fundamental will change under the new leader, a close protégé of Niyazov’s who came to power in a rigged election. He may not have much time before revenues fall, as gas production will decline without substantial new investment.

Uzbekistan has the least oil and gas of the three producers. It is a net importer of oil, and much of its declining gas output has been sold to Russia. Despite wishful thinking in some European capitals, it will never be a part of EU energy security arrangements. The gas also perpetuates a system that impoverishes and represses its people. Domestic supplies are often cut in winter, for example, so the gas can be sold abroad, leaving cities unheated in freezing weather, provoking protests and serious unrest.

“The hard fact is there is no substitute for arrangements with Russia that stress mutual dependence on commercial oil and gas delivery”, says Michael Hall, Crisis Group Central Asia Project Director. “The international community needs to pay more attention to Central Asia as a security risk, without expecting it to solve its outside energy needs”.

RSS feeds

The China-Myanmar pipelines

From the Chennai Centre for China Studies (B.Raman):

Myanmar has allowed Chinese companies to construct two pipelines connecting the Arakan coast with Yunnan—-one for oil and the other for gas. While the oil pipeline will start from Sittwe, it is not yet clear from where the gas pipeline will start. Most probably, from Kyaukpu. Both the pipelines will be used to transport part of China’s imports of oil and gas from West Asia and Africa in order to reduce the dependence on the Malacca Strait. Subsequently, these pipelines will also be used to transport any oil or gas that may be discovered by the Chinese companies to whom contracts for exploration in the Arakan area have been awarded.

On April 21,2006, the “Shanghai Security News”, quoting what it described as well-informed sources, had circulated the following report: “The plan to build a crude oil pipeline between Burma and China has been shelved because of viability concerns. The pipeline was vetoed for its poor economics, insiders say. Burma produces no oil and building a transit pipeline is not viable in economic terms. On the other hand, if constructed, the pipeline’s capacity would account for merely 10% of the oil shipments currently passing through the Malacca Strait, which would not go far in solving the country’s energy supply security concerns.”

Now, after a year, the SINOPEC, as quoted by Hsinhua, says that the oil pipeline has been approved and that the construction will start this year. What has made this pipeline, which was considered as not viable in April last year, viable now? If the Myanmarese authorities have allowed the Chinese to construct an oil pipeline from Sittwe, what happens to the Indian proposal for a gas pipeline from the same place? Is it confirmed that the Myanmarese authorities have decided to sell the gas produced in the two blocs awarded to a consortium of Indian and South Korean companies to China, as reported by some sections of the media? If so, what happened to the Indian and South Korean proposals to purchase this gas?

RSS feeds

Petróleo: multinacionales, compañías nacionales y estados

Fantástico artículo de Jean-Pierre Sereni en Le Monde Diplomatique sobre la geopolítica del mercado de petróleo. La tesis princial del artículo es que después de dos decadas de liberalizaciones energéticas, ahora las compañías nacionales y los Estados estan recuperando el control de las reservas de petróleo, y eso va a incrementar en el futuro, pues las reservas controladas por las multinacionales son las que más intensamente se estan explotando y por lo tanto van a disminuir más rapidamente. Por otro lado, los países desarrollados estan incrementando los impuestos sobre las compañías petroleras occidentales y estas no estan, seguramenta por la creciente percepción de riesgo, invirtiendo suficientemente en la búsqueda de nuevos jacimientos. Cabe preguntarse si occidente puede continuar esperando que su seguridad energética sea garantizada por sus compañías privadas o debería intervenir más profundamente en su gestión, sus inversiones, etc. ante un futuro energético incierto.

Avec un rapport de forces en plein bouleversement entre les dominants d’hier, les majors surtout anglo-saxonnes, qui ne sont plus que cinq (ExxonMobil, Royal Dutch Shell, BP, Total, Chevron) à contrôler à peine 9 % des gisements, et les nouveaux titans du brut que sont les compagnies pétrolières nationales (CPN) des pays membres de l’Organisation des pays exportateurs de pétrole (OPEP) (cf. « Principaux acteurs »). Dix d’entre elles disposent de la majorité des réserves (53 %) et se savent désormais incontournables. Derrière, loin derrière, d’autres CPN exploitent 16 % des réserves. Beaucoup sont les bras armés d’Etats comme la Chine, l’Inde, le Brésil ou la Malaisie dont les besoins explosent au rythme exceptionnel de leur croissance économique. (…)

En dehors des dix de l’OPEP (1), les trois autres acteurs puisent dans leurs réserves, dont ils sont propriétaires, qui diminuent inexorablement, et voient l’avenir avec inquiétude. L’écart est préoccupant d’abord pour les indépendants (34 % de la production mondiale, contre seulement 22 % des réserves), mais aussi pour les CPN qui n’appartiennent pas à l’OPEP (25 %, contre 16 %) et pour les majors (13 %, contre 9 %).

Trois acteurs sur quatre se trouvent donc dans la position très inconfortable de pomper chaque jour plus d’hydrocarbures qu’ils n’en acquièrent par leurs découvertes ou des rachats de gisements à d’autres compagnies. Dans le jargon des pétroliers, on dit de manière expressive qu’ils sont « déficitaires », faute de pouvoir reconstituer leurs réserves. (…)

Shell a dû reconnaître en 2004 avoir « truqué » les siennes à la hausse (+ 20 % !) pour faire meilleure figure auprès de ses actionnaires.

Selon PFC Energy, une influente société internationale de consultants, 77 % des hydrocarbures du monde appartiennent aux CPN, au secteur public donc. En termes géopolitiques, les compagnies des pays consommateurs sont plutôt au Nord ou à l’Est, et les gisements plutôt au Sud… Le tête-à-tête est donc inévitable entre les premières, les compagnies pétrolières internationales (CPI) et les gouvernements des pays exportateurs. Inévitable mais de plus en plus difficile.(…)

Si, demain, le monde manque de pétrole, ce sera plus sûrement faute d’investissements que de gisements. Une découverte exige des milliards de dollars d’équipements pour se transformer en une production, et les opérateurs les plus riches, les majors, représentent à peine 20 % des investissements en amont, dans l’exploration et la production. C’est pourtant là que se trouvent les meilleurs spécialistes mondiaux, les mieux à même de concevoir des projets d’avant-garde à la pointe de la recherche technologique.

RSS feeds

The charade on Iran

Prime Minister Dr. Manmohan Singh shaking hands with the King of Saudi Arabia Abdullah Bin Abdulaziz al Saud during his departure ceremony, in New Delhi on January 27,2006.

C Raja Mohan
Posted online: Friday, May 11, 2007 at 0000 hrs

India’s challenge in South West Asia is not about saving Iran from the US. It is protecting its interests in a region where the most important trend is the unfolding Saudi rivalry with Iran

In India, as in the United States, it is now a well-established tradition that the debate on the Middle East is more about domestic politics than the regional realities. The US Congressmen who are asking India to stop its engagement with Iran, and the Indian parliamentarians who demand that New Delhi stand up against American pressures, are responding to internal pressure groups. Having dealt with this before, Washington and New Delhi are now adept at deflecting the fire from their domestic lobbies.
The Bush Administration will assure the Congressmen that it is taking up America’s Iran concerns with New Delhi. The UPA ministers will thunder that the Indian foreign policy will be made in New Delhi and not anywhere else.
As American opponents of the Indo-US nuclear deal clutch at any straw in their final political onslaught against it, every half-baked news report from India on cooperation with Iran is whipped up in Washington as “evidence” of New Delhi’s bad faith.
Both governments, however, know that there is less than meets the eye in the proclaimed strategic partnership between New Delhi and Tehran. Yet persistent posturing has created a potent set of political myths.

• Pipeline Myth: Despite all the political emotions it has whipped up, the Iran-Pakistan-India pipeline is hardly strategic from New Delhi’s perspective. When he reversed years of the Indian establishment’s opposition to the IPI pipeline, Manmohan Singh saw it as an Indo-Pak political confidence building measure rather than as an answer to India’s energy problems. If Iran was incidental to this pipeline, Tehran has now made it difficult by quoting an exorbitant price for the gas. Pakistan, too, is demanding unreasonable transit fee.

Even if we can settle on the price, is the pipeline secure against the Baloch people’s threat to blow it up? Would India want to invest in downstream industries without reliable security guarantees from Pakistan?

With Iran under an expanding sanctions regime, it will be near impossible or too costly to raise the much needed international finance for the pipeline. In any case, India can always import liquefied natural gas from the Gulf, including Iran, in ships. Meanwhile, every time any American says ‘no’, India will have to say ‘yes’ to a pipeline that might not take off in the near future.

• Energy Security Myth: This myth is built on a simple proposition that Iran is a major source of oil for India. According to some estimates, India now imports about 7 per cent of its annual oil requirements from Iran. Saudi Arabia, in contrast, supplies nearly 30 per cent of India’s supplies and has promised to do more to meet India’s energy security requirements. Iran today is not ‘strategic’ in any sense for India’s hydrocarbon imports. It could be in the future, if and when Tehran modernises its hydrocarbon policies and finds itself at peace with the region and the world. That is some distance away.

• Afghanistan Myth: Realists are right in recognising that Indo-Iranian political interests converged in their opposition to the Taliban and support to the Northern Alliance in Afghanistan during the late 1990s. That was then. Now, India’s Afghan eggs are in the Hamid Karzai basket and New Delhi will have no reason in the future to abandon the Pushtuns to the mercy of Pakistan.

• Central Asia Myth: Although Iran could be India’s gateway to Eurasia, Tehran today has returned to the pitiful slogan of self-reliance rather than emphasise regional and global economic integration. India’s natural corridors to Afghanistan and Central Asia are through Pakistan. If the US, instead of complaining against New Delhi-Tehran ties, can agree to overland trade between India and Afghanistan, Iran’s weight in New Delhi’s geopolitical calculus would be much less salient.

Looking ahead, India’s challenge in South West Asia is not about saving Iran from the United States, but protecting New Delhi’s mounting interests in the Arab Gulf.

Amidst the floundering American intervention in Iraq, the single most important regional trend is the unfolding Saudi rivalry with Iran. Thanks to the American empowerment of the Shia majority in Iraq, the Sunni Arab regimes are now determined to balance the growing Iranian influence in Baghdad.

In the new struggle between Riyadh and Tehran, Arabs and Persians, and the Sunni and Shia, you could bet your bottom dollar India will inevitably gravitate towards the former. India has barely 300 families living in Iran, while nearly five million Indians work in the Arab Gulf, who save and remit home billions of dollars. India’s trade with GCC is nearly six times larger than that with Iran and growing much faster.

Together the six countries of the Gulf Cooperation Council constitute India’s single biggest source of imported oil, one of the top destinations for India’s exports, and increasingly important source of foreign direct investment. India’s expanding defence ties with the Arab Gulf are far more consequential than the nominal security engagement with Iran.

In the current domestic play on Iran, few will take New Delhi to task for neglecting the Arab Gulf. Would any one ask why six long years have elapsed between Foreign Minister Jaswant Singh’s visit to Saudi Arabia in January 2001 and the one now planned by Pranab Mukherjee? Or, why hasn’t Prime Minister Manmohan Singh found time to visit the Arab Gulf even once in the last three years? When domestic politics envelops a foreign policy debate, facts cease to be important.

By its sheer location, resources, and history, Iran will always be the prize of the Gulf. But until it changes the current internal orientation and finds external harmony, Iran’s relations with India will remain underwhelming.
Many in Washington and New Delhi, for their own particular reasons, will continue to exaggerate the significance of the Indo-Iranian engagement. The absurdity of Indo-US word play on Iran is redeemed, however, by its irrelevance to the new power play in the Gulf.

The writer is professor at the Rajaratnam School of International Studies, Nanyang Technological University, Singapore

RSS feeds

Sakhalin Island’s oil and gas resources

Sakhalin Island’s oil and gas resources are being developed by international consortia. Sakhalin I’s oil production neared its maximum capacity of at 250,000 bbl/d in February 2007, and Sakhalin II produces oil for six months of the year at a rate of roughly 80,000 bbl/d. Other areas around Sakhalin Island are still in early stages of development.

General Background

Sakhalin Island, a former penal colony located off the east coast of Russia and to the north of Japan, holds vast hydrocarbon resources. Oil reserves in the area are estimated at almost 12 billion barrels, and natural gas reserves at approximately 90 trillion cubic feet. International consortia of energy companies have entered into production sharing agreements (PSAs) to develop the resources. Even though all of the consortia have extensive export plans (including to the United States) via LNG terminals and export pipelines to the mainland, there has been little progress except on the first two parts of Sakhalin Island: Sakhalin 1 and Sakhalin 2, which lie to the southeast of Okha (see map to the left, and for more detailed maps click on the project websites for Sakhalin 1 and Sakhalin II below)

Read more information about

RSS feeds