Group's Final Report

Please find the Final report on Scribd. Follow the links.

LINK TO DOCUMENT

"Oil Wealth and U.S. Backing Enables Saudi Arabia to Crush Dissent in Bahrain" on Democracy Now!

May 06 2011: "Oil Wealth, U.S. Backing Enables Saudi Arabia to Crush Dissent in Bahrain"

Democracy Now! interviews Toby Jones, Rutgers University professor and author of Desert Kingdom: How Oil and Water Forged Modern Saudi Arabia. Formerly of the International Crisis Group, Professor Jones discusses the current political situation in Saudi Arabia and highlights troubling trends in relation to the Arab Spring.  

Curren Events in Algeria: Oil related

On May 3rd the Algerian court found former head of Sonatrach guilty of corruption. He was sentenced to one year in prison and a $7,000 USD fine. He was dismissed from his position last year due to these charges. This comes only a few days after one of the most violent protests in four months. Protesters demanded greater political freedom and standards of living. The government has responded by both violent crackdowns and greater public spending and the promise of political reform.

Eni SPA and Sonatrach have signed a cooperation agreement to develop unconventional hydrocarbon resources, especially shale gas. Experts estimate that Algeria may have over 200 tcf in shale gas.

Economic Governance and Reform in Saudi Arabia: An Outline

Economic Governance and Reform in Saudi Arabia by Rodney Wilson

Edited by Anoushiravan Ehteshami and Steven Wright

Ithaca Press (2007)           

Useful comparison between economic management of post-2000 oil revenue boom with 1970s

·      Oil booms as reason to avoid making difficult economic reforms vis-à-vis taxation and government spending

Algerian Oil & Gas

Retrieved from: Review of African Political Economy http://www.jstor.org/pss/4006880

A New Scramble for African Oil? Historical, Political, and Business Perspectives

Reform in the Middle East Oil Monarchies: An Outline

Reform in the Middle East Oil Monarchies

Edited by Anoushiravan Ehteshami and Steven Wright

Ithaca Press (2007)

Reform in the Middle East Oil Monarchies focuses on recent trends in the region, arguing that they represent liberalization rather than real movement toward democracy. Many of these changes are seeming cosmetic, rather than representative of a real diffusion of political power. The following posts will closely outline essays contained in the volume that are useful for understanding these trends in Saudi Arabia.

The Dutch disease factor in KSA

By Cecilia Mussi Rodriguez @ Lund University

http://biblioteket.ehl.lu.se/olle/papers/0002223.pdf

Paper quick outline

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0Bws7x79XSc1aZWYwOWYwMjAtYmJlMy00Y2M2LWE4YTMtNGY1MjkxMTc3YjM2&hl=en&authkey=CPSKjssF

The Economics of an Integrated World Oil Market

By William Nordhaus / Yale University / Keynote Address @ International Energy Workshop in Venice, Italy June 17-19, 2009 

http://nordhaus.econ.yale.edu/documents/iew_052909.pdf

An Era of Oil Scracity (IMF)

The recent spike in oil prices suggested that the global oil market had entered a period of increased scarcity, while global capital flows to emerging markets surged after the crisis, the International Monetary Fund (IMF) said on Thursday.

"The origins of this scarcity can be traced to the tension between the upward shift in global oil consumption growth due to fast-growing emerging market economies and supply constraints, which have led to a downshift in oil supply growth," the IMF noted in a report.

EIA STEO - April 2011

The forecast for total world oil consumption grows by an annual average of 1.5 million bbl/d in 2011 and 2012.  Supply from non-OPEC countries grows an average of about 0.4 million bbl/d annually through 2012.  Consequently, EIA expects that in order to meet projected demand growth the market will rely on both a drawdown of inventories and significant increases in the production of crude oil and non-crude liquids in OPEC member countries at a time when the disruption of crude oil exports from Libya and continuing unrest in other MENA countries already highlight significant supply risks.  

Among the major uncertainties that could push oil prices above or below our current forecast are: the continued unrest in producing countries and its potential impact on supply; decisions by key OPEC member countries regarding their production response to the global increase in oil demand; the rate of economic growth, both domestically and globally; fiscal issues facing national and sub-national governments; and China's efforts to address concerns regarding its growth and inflation rates.

Optimal oil production levels for KSA

By Ayed Al-Qahtani (Colorado School of Mines PhD candidate)

http://www.iaee.org/en/students/best_papers/Al-Qahtani.pdf

Daniel Yergin: Global Oil Market facing a sea change (itw)

© Wall Street Journal / 2-25-2011

Egypt & the prices

The political turmoil in Egypt has helped push oil prices up to around $100 per barrel. As Matthew Hulbert writes, it is clear that geopolitics is once again a driving factor in the oil market. He advises us to buckle up — as the ride is about to get bumpy.

World oil: market or mayhem?

By James Smith / Journal of Economic Perspectives / Summer 2009

http://web.mit.edu/ceepr/www/publications/reprints/Reprint_214_WC.pdf

Iran sees the global market as oversupplied

Iran sees the global oil market as oversupplied, despite prices that have been pushed up by upheaval in the Middle East, its OPEC governor was quoted as saying in a newspaper published on Saturday.

“Not only is there not a shortage of supply in the oil market but there is 1 million barrels (per day) of excess supply,” Mohammad Ali Khatibi told Sharq daily in an interview.

He also warned that prices would continue to increase if the Libyan crisis persists.

© Reuters / 04-10-2011

Effects of Regional Instability on Algeria's Oil

Algeria's military is on high alert over possible threats to the country's oil fields in the south. Concern stems from the government's failure to stop the illegal weapons trade, and as a result even explosives and rockets are in circulation. The military is responding by increasing the security along Algeria and Libya's 900 km long border.

There are also concerns over security in the Sahal region (Algeria, Mauritania, Mali, Niger) as a whole, since an al-Qaida affiliate is active there. The governments of the region are responding to this threat by establishing a joint military headquarters in the Sahal.

Algeria's state oil company Sonatrach, may believe the region is stabailizing, as it has lowered its official price for Saharan Blend crdue for May to $1.70 a barrel. This is a sharp decrease from its high $2.85 price in April ($1.35 in March) during the NATO air strikes over Libya.

US-Saudi Tensions

There has been a lot of chatter recently in foreign policy circles about Saudi Arabia’s internal response to the Arab Spring and its recent intervention in the Shiite majority protests in neighboring Bahrain. Themes woven throughout these musings include greater Saudi-Iran tensions, an increase in Saudi paranoia vis-à-vis the Iran threat, greater stress on the US-Saudi special relationship, and the notion that liberal political reforms are inevitable in the kingdom despite the staunch resistance of the Saudi establishment.

Foreign Policy’s recent article “Outraged in Riyadh,” touches upon the many recent strains on the US-Saudi alliance. Among Saudi gripes are the US’ lack of support for Egyptian dictator, Hosni Mubarak, and US/NATO flailing intervention in Libya to oust Gaddaffi. Despite the US’ hands-off attitude toward Bahrain, Saudi Arabia decreased oil production last month, despite its assurances to make up for Libya going offline. It seems like the long-time pals may be in for a rough 2011.

4.17 Meeting Report

Last week we met to narrow down our project topic. We decided on a comparative case study of Saudi Arabia and Algeria.
We will provide historical background (colonial, post-colonial, and nationalization periods), evaluate current policies and trends, and predict the impacts the two countries will have on the region as well as on the global market in the next decades.

Wikileaks: Saudi Arabia's production will never reach 12m bcd

The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The impact of oil decrease on human settlements

© Balfour & Associates 2003/2004

In the same kind of source, I will post in the next week an analysis of the 1972 Meadows & Al. report commissioned by the Club de Rome to Meadows's MIT research team.

Oil may run out by 2060 - HSBC global research report

HSBC does not mean to scare you in its latest report, but it does point out that we are facing a massive energy crunch. That’s because the bank is just not optimistic there is much oil left  in the world – in fact a mere 49 years of the black gold on current consumption levels.

Bristol's Peak Oil analysis report

Download here the 106 pages of Bristol's vision of how to locally politically deal with a lower and/or more expansive oil supply. I will upload an analysis of the key points of this report very soon for those who don't have the courage or the time to go through it don't worry!

http://www.bristol.gov.uk/ccm/cms-service/stream/asset/?asset_id=32277111

Global Market stability - Die Bundeswehr's perspectives

A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.

The Persian-Arabic Cold War

For three months, the Arab world has been awash in protests and demonstrations. It's being called an Arab Spring, harking back to the Prague Spring of 1968.

But comparison to the short-lived flowering of protests 40 years ago in Czechoslovakia is turning out to be apt in another way. For all the attention the Mideast protests have received, their most notable impact on the region thus far hasn't been an upswell of democracy. It has been a dramatic spike in tensions between two geopolitical titans, Iran and Saudi Arabia.

Direct URL

The blog is now accessible through the direct URL:
http://menaoilresearch.blogspot.com

Bookmark it!

EIA Data Overview: Iraq

Country Analysis Brief (taken from EIA website, www.eia.doe.gov/countries/cab.cfm?fips=IZ)

The issues Iraq faces concerning its natural resource use have been largely effected over the past three decades by war and civil unrest. In late June of 2010 the U.S. allocated $20 Billion to Iraq Oil and Gas sector to begin modernization of its oil infrastructure. Long-term reconstruction costs in Iraq are estimated to amount to $100 billion or more, according to reports by various U.S. government agencies, multilateral institutions and other international organization.

The Hydrocarbons Law, which would govern oil contracting and regulation and provide a legal framework for investment, has been under review in the Council of Ministers since October 26, 2008. Christopher Hitchins, in an article for Slate in March of 2007, offered a particularly sanguine view of the democratic potential of the passage of such legislation labeling it as "Federalized control over oil and gas with a distribution of revenue in proportion to the population of each province." Find that article here: www.slate.com/id/2161629/. Hitchins also cites a less optimistic view from Christian Parenti published a week later in the Nation: www.thenation.com/article/who-will-get-oil.

Oil Sharing Developments in Sudan

On March 4^th the Sudanese government announced it is increasing oil exploration in the north. Currently oil from South Sudan accounts for 75% of the North’s 500,000 barrels per day. The state oil minister announced that Sudan controls 70% of the oil pipeline connecting the two regions; however, a new deal on oil sharing is under negotiation, as the South is currently dependant on the north’s refining facilities. For its part South Sudan is exploring alternative export options, and is even considering building a new pipeline through Kenya and DRC to the Indian Ocean. By March 22^nd negotiations over oil between the north and south were still ongoing, but Southern Sudan may agree to pay the north up to 30% of its oil revenue, as well as transportation costs, in exchange for the use of the north’s refineries and pipeline.

Libyan Oil Concessions

© Stratfor

The Fracture of Libya's NOC?

The recent fighting between rebels in Eastern Libya and the government of Muammar al-Gaddafi has resulted in a fracturing of the National Oil Corporation (NOC). Though later posts will delve into greater detail of the history and structure of the NOC, its subsidiaries and the relationship to the Oil Ministry, this post will focus on recent events.

EIA Country Briefs for Yemen, Syria, Bahrain, Libya

Notes from EIA Country Briefs

Yemen

Geostrategic significance: Located on the Bab al-Mandab shipping lane (3.2 mb/d); closure or blockage could result in disruptions of Persian Gulf/Gulf of Aden to Suez/Sumed pipelines.

Hydrocarbon sector:

· 30% GDP

· 75% government revenues

· 3 billion barrels proven oil reserves (2011)

Oil Production:

· 2009: 286k bbl/d

· 2010: 260k bbl/d

· 2011/2010: 250k bbl/d (est.)

· Net exporter, 125,500 bbl/d (2009); domestic consumption rising

· Refining capacity: 140,00 bbl/d (2011)

o Chinese investment in modernization of refining facilities

Key players:

· General Corporation for Oil, Gas and Mineral Reserves

· Yemen Oil Company

· Safer Exploration and Production Operating Company (SEPOC)

o Leading national oil company (est. 2005)

General trends, observations:

· Oil revenues declining; foreign investment to energy sector needed

· Recent swing toward natural gas for domestic consumption and export

· Foreign contracts require parliamentary approval

o Licenses of Hunt Oil and ExxonMobil not renewed via parliamentary veto (2005)

o SEPOC can take over international companies’ assets upon licenses expiration (2010)

Syria

Link in Arab Gas Pipeline (Egypt, Jordan, Syria, Lebanon); potential increased transit revenues

Hydrocarbon sector:

2.5 billion barrels proven oil reserves (2010)

Oil Production:

· 2008: 390k bbl/d

· 2009: 368k bbl/d

· Exports: 148k bbl/d (2009)

o Exports mainly to Europe (Germany, Italy, France)

· Refining capacity: 240,00 bbl/d (2011)

Key players:

· Syrian Petroleum Company

o Increased exploration to combat production decline

o Increased production partnerships with foreign companies (50% share)

General trends, observations:

· Foreign investment to energy sector needed

· Recent move toward natural gas for domestic consumption-> natural gas importer

Bahrain

Hydrocarbon sector:

· 70% government revenues

· 60% of exports (exports = refined petroleum, not crude)

· 125 million barrels proven oil reserves (2011)- all from Awali field

o 2011 drilling new wells to combat production decline

o Refining capacity: 262k bbl/d

o Extra refining capacity-> imports 210k bbl/d from Saudi Arabia to refine and export

· Increased domestic consumption

· Decreased exports

o 2005: 27k bbl/d

o 2009: 3k bbl/d

Oil Production:

2010: 46k bbl/d total oil liquids (35k bbl/d crude oil)

Key players:

Bahrain Petroleum Company (Bapco, state-owned)- production, distribution, etc.

Libya

Hydrocarbon sector:

· 95% of export earnings (2010)

· 46.4 billion barrels proven oil reserves, Africa’s largest

· Member of OPEC

Oil Production:

· 2000: 1.43 million bbl/d

· 2010: 1.8 million bbl/d production capacity; 1.65 million bbl/d actual production (2010) due to OPEC quotas

· 1960s Peak: 3+ million bbl/d

· Refining capacity: 378k bbl/d

o Seeks upgrade in deteriorating refining facilities

· Domestic Consumption: 270k bbl/d (2010)

· Net exports (all liquids): 1.5 million bbl/d (2010)

o Exports mainly to Europe (Italy, Germany, France, Spain)

Key players:

· National Oil Company

o Since 2005, changes in production-sharing agreements restrict IOC’s output and require “fresh investment” for license renewal.

o Increased IOC investment in exploration has slowed

General trends, observations:

· Natural gas production increased in recent years.

· UN/US lifted sanctions on Libya in 2003/2004

· US designation as state sponsor of terrorism lifted in 2006

o US imports from Libya: 71k bbl/d (2010)

EIA Country Briefs for Algeria, Egypt, and Sudan

Notes from EIA Country Briefs Algeria -Member of OPEC -Economy is heavily reliant on hydrocarbon sector -6th largest global exporter of LNG (2nd largest in OPEC) (exports 70% of its supply, ore 1.9 million barrels) -¼ of its exports goes to the US -14th highest global oil producer, 4th largest in Africa -Has 12.2 billion barrels of proven oil reserves, produces 2,229 thousand bbl/d (Jan 09) -Nationalized oil and gas (Sonatrach), but allows FDI (but Sonatrach has at least 51% share of every contract) -Maintaining and developing new fields: goal to continue current production levels -2009: refining capacity of 450,000 bbl/d Egypt -Proven oil reserves at 4.4 billion barrels (Jan, 2011) -Production has declined from 1996 peak of 935,000bbl/d to current 660,000 bbl/d. Offsetting this by developing its natural gas sector (expected to be the country’s driver of growth) -A net importer, but exported 145,000 bbl/d crude oil in 2010. -Government planning to slowly lift subsidized prices and target subsidies more effectively to reduce domestic demand -Suez Canal (plans for expansion as cannot accommodate larger tankers) and Sumed Pipeline (capacity of 2.3 million bbl/d, joint ownership by Egypt, Kuwaiti, and Abu Dhabi, and Saudi Arabian companies) Fees collected are a significant source of government income) -Largest oil refining capabilities in Africa: imports, refines, and exports non-Egyptian crudes -Egyptian General Petroleum Corporation (EGPC) state entity in charge of infrastructure, licensing, and production. -Energy sector divided into three companies. Tunisia (no analysis available) -Produces 86,000 bbl/day of oil -Produces 105,000 bcf of natural gas Sudan -Most of its oil is produced in the south but its pipeline, refining, and export infrastructure is located in the north. The Abyei region, on the north/south border, is a significant oil producing area. It was given special autonomy in the 2005 Comprehensive Peace Agreement (CPA), and has not yet voted in the 2011 referendum for Southern independence. Oil sharing negotiations have begun, but violent clashes in the region may derail them. -Oil exports are 90% of total export revenues. For South Sudan it represents 98% of total revenues and 56% for Northern Sudan. -Natural gas has been discovered, but have not yet been confirmed as commercially viable -Conflicts and (US)sanctions prevent further development -Total oil production is 480,790 bbl/d -Foreign investments from China, India, and Malaysia compliment low domestic investment in development. Practically all of Sudan’s oil exports go to Asia.